Covid19 Pandemic and Tourism Industry in Assam

The Covid 19 Pandemic could lead to a crippling blow to the Indian travel and tourism industry, impacting all its geographical segments –inbound, outbound and domestic and almost all tourism verticals –leisure, adventure, spiritual, heritage, corporate and niche segments. The whole tourism value chain across hotels, travel agents, tour operators, destinations, restaurants, family entertainment venues and land, air and sea/river transportation has been hit.

In North East India, with large scale cancellation of travel plans, by both foreign and domestic tourists, there has been a drop in both inbound and outbound tourists. This downslide started in 2019 December during the CAB/CAA movement and gradually when things started getting better, the law and order situation in Meghalaya became a deterrent to the flow of tourists. Now with COVID 19 Pandemic it is like a nail in the coffin for the tourism sector in this region. With the shut down and slow down expected to last for a period stretching until October 2020, and perhaps get to normal levels by end of 2020, it is evident that the Tourism Industry in North East in general and Assam in particular, which has been in the slump since December 2019, the revenue loss will be for a period of almost twelve months.

Assam had always been a gateway to North East ,and except for visits to Kaziranga and Kamakhya, Guwahati was serving as a transit point for tourists visiting Meghalaya and Arunachal Pradesh. But of late, due to the aggressive marketing and promotion of tourism in Assam, a lot of tourists were specifically visiting Assam. Various locations identified were promoted and adventure tourism was slowly coming up as a niche segment. Tour operators had started promoting places like Sualkuchi, Rongtholi, Hajo etc and this in turn led to growth of homestays, promotion of ethnic cuisine and promotion of culture and hand crafted items.There are approximately 100 registered tour operators in Assam with an average employee size of six people and they own an average of four vehicles. This leads to an addition of another four drivers engaged for the vehicles. Most of the vehicles have been taken on bank loan and hence there is a liability to pay the EMI. With huge cancellations and no revenue, covering the fixed cost including salary and EMI itself is a very big challenge. There are also approximately 600-700 Gypsys for visiting the sanctuaries in Kaziranga, Manas and Pobitora and in Kaziranga alone there are 500 Gypsys. Each Gypsy would again be having a driver and a guide. It is to be noted that along with the registered tour operators, there are also a large number of unregistered tour operators, online travel platforms, aggregators, other service providers, all involved in this tourism space. Realising the potential of tourism Industry, some colleges have started Tourism diploma courses and the students passing out from these colleges started getting absorbed in the tourism industry. The impact on the tourism industry will also have a spiralling affect on various other service providers in the eco-system. Seeing the huge potential in the tourism sector, a number start-ups had come up in this sector and presently 20% of the start-ups from the region are tourism related start-ups.

Looking at the major challenges that entrepreneurs from this sector are facing ,it is seen issues like burden of paying the EMI’s for bank loan, covering the fixed expenses like salary, rent etc are most critical ones, as the industry has very limited opportunity for revenue generation in the next six months. While entrepreneurs are looking at possible opportunities like identifying scope of local tourism and targeting inbound tourists, they are also adopting strategies on minimising recurring cost and investment and focussing more on digital marketing.

Some expectations from the government include the following:

  • Short term interest free loan for rebuilding business
  • Doubling the existing overdraft facilities for the industry to avoid mass layoffs
  • Providing interest free moratorium on existing loans for nine months
  • Deferment of all statutory compliances and State Goods and Services Tax (SGST) for twelve months and removal of fees for any upcoming licenses/permits .

Tourism and hospitality industry is very closely related to revenue and employment generation and hence a special bail out package for the entire industry is needed. The number issue for all of them is cash. Their revenues have gone zero, their vendors have stopped paying them and receivables are completely frozen. Even when the lockdown is removed, the recovery is not going to be overnight. The need of the hour is to have a SME stabilisation fund. Entrepreneurs also need to figure out what the world needs and not what they used to produce. The MSMEs have to come together around industry associations. One of the reasons why the IT industry has been so successful is because they have organised NASSCOM. The crisis is also a giant opportunity. Entrepreneurs can strategise and find new ways of doing business. Those who can survive in the medium term and adapt are going to flourish.

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