Impact of Covid-19 Crisis on Tourism, Travel and Hospitality Management.
- Moirangthem Surchandra Singh
- Sep 9, 2023
- 3 min read
Updated: Sep 12, 2023
Gedalia Dkhar and Aerex Nameirakpam
Introduction
The corona virus has a crippling blow to the Indian Travel and Tourism Industry and the entire value chain linked to the sector is likely to lose around Rs 5 lakh crore or $ 65.57 billion. The organized sector alone is likely to lose $ 25 billion. The figures are quite alarming and the industry needs immediate measures for survival.
Methodology
The study has chosen the follow Indian Hospitality – The Trends and Opportunities. The Ministry of Tourism (2017) witnessed the highest ever Foreign Tourist Arrivals (FTAs). At 10 million, a growth of 14.0% over last year (Ministry of Tourism, Government of India, 2018). Secondary data was collected from the prediction of the arrival of Foreign Tourists and drawn impact of Covid-19 pandemic on tourism economy. Further, secondary data was examined on subordinate information produced by various organization and research scholars and data includes existing statistics and information provided by the Bureau of Tourism, Department of Industrial Policy and Promotion (DIPP), Newspapers, Magazine, Internet, etc.
Finding
Trends and Opportunities
The result revealed Trends and Opportunities for industry performance by star category and 13 major hotel markets in India during 2018. The existing and future supply has also been revised in depth to estimate changes in these markets over the next five years.
Impact of Covid-19 on Indian Tourism and Hospitality
The Tourism sector has dramatically affected by the wide spread of Covid-19 and may remain for a longer time. The arrival of foreign tourists of India from different parts of the world has reduced by 68% in March 2020 compared to the previous month. It has a great impact on revenue generated from tourism in the form of FEE (Foreign Exchange Earning). The Foreign Tourists Arrival pattern is non-linear and non-stationary. Hence, the ANN (Artificial Neural Network) model has been used to predict FEE considering the member of tourists and exchange rates input. Out of 328 months of data, 93% of data points are considered training data sets. The optimal model parameter setting obtained are l=2, m=2 and n=1. The n=0.07, a=0.6, Goal=0.001 and Epochs=13000, using these model parameter setting, the data is used to predict 24 months. FEE and the forecast error i.e. Mapes 10.24. The models fitness is 97.976% which ANN models fitness. Four scenarios have been generated to analyze the impact of Covid-19 on tourism in term of FEE. Using the optimal parameter setting, the monthly FEE is predicted considering Scenario-1, Scenario-2 and Scenario-3. It can be observed that lockdown has high impact on the FEE.
Revenue Loss due to Covid-19 Crisis in Travel, Tourism and Hospitality Sectors
The corona virus pandemic has dealt a crippling blow to the Indian Travel and Tourism industry and the entire value chain linked to the sector is likely to lose around Rs 5 lakh crore.
The Revenue loss for organized players is seen at Rs 40,309 crore semi-organized at Rs 8,379 crore and unorganizes at Rs 41,126 crore.
The onset of Covid-19 and the subsequent travel restriction and nationwide lockdown. However, had an unprecedented impact on the sector. The occupancy rate in 2020 is likely to fall 31.6 % while Revenue per Available Room (RevPAR) down by 57.8%. The industry witnessed its largest growth rate in the 2000 at 6.3% CAGR as the country’s economy opened post-liberalization and demand out stripped supply by a significant margin. Apart from 2017, average rate growth, post of GFC crisis, has been limited in the 2010 growing at a CAGR of 1.7%.
Conclusion
Trends and opportunities report with light hearted note on the sector’s fear of missing out business opportunities. Not raising average room rates or deftly as it should. The market continues to bestow the requisite latitude for congruous performance across all metrics are benefiting from the state of affairs and the macro dynamics at hand would be well advised.
Tourism sector has dramatically affected by the wide spread of Covid-19 and may remain for a longer time. The arrival of foreign tourists to India from different parts of the world has reduced by 8% in March, 2020 compared to the previous month. It has a great impact on revenue generated from tourism in the form of FEE (Foreign Exchange Earning). The organized sector alone is likely to lose USD billions. The figures are quite alarming and the industry needs immediate measure for survival. The revenue loss for organized players is seen at Rs 40,309 crore, semi-organized at Rs 8,379 crore and unorganized at Rs 41,126 crore.
Suggestion
The Covid-19 pandemic has taken a severe hit on the revenue of the Indian Hospitality sector. This study also contributes toward managerial implications by laying a foundation toward reacting against the epidemics outbreak.
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