Tourism Financing – Arduous Journey Ahead

Were you used to your frequent flier miles doubling every quarter? Did you complain about the awful airport food, but we’re addicted to cheap flights anyway? Do you long for that comfortable five-star hotel stay your company might not offer anymore? Well, you are not alone. And your woes are the reason 5 crore people might lose theirs out of jobs. When the wheels of the economy come to a screeching standstill, it is bound to affect all industries. However, some are more affected than others. Since mobility is worst affected, it is not hard to guess that the travel and tourism industry will be on life-support if not dead already.

I say this based on the prediction of the Federation of Associations in Indian Tourism and Hospitality (FAITH). The Federation says that the 5.8 lakh crore tourism industry will not see any cash flows at all for the next 12-odd months. They might as well have pronounced the industry dead. And buried it. Additionally, look at the supplementary effects a blow to tourism will have. To take just one example, the gross banking credit of the Indian tourism industry is about Rs. 50,000 crore. Defaults would rock the already rickety banking structure.

Globally, countries have come to the aid of their tourism industries by putting together salary support and tax waivers. Indian industry needs a similar but a far stronger push. This will have a positive impact on the larger economy as well considering the travel and tourism sector alone accounted for 9.2% of India’s GDP in 2018. After all, it might be the question of about 5 crore jobs.

Maybe it would be a good initiative from the Indian government to give tax benefits for family vacations to boost the travel and tourism sector. Won’t it enticing to avail tax benefits for planning a trip?

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