Close to 40% travel firms may shut shop in 3 months

Image of a tourist looking at an airplane take flight
Image Source: Forbes

More than 80% travel and tourism companies have lost 100% revenue, whereas 15% have seen a dip of 75%. Close to 40% of these companies are on the brink of complete shutdown in the next 3-6 months.

A survey with over half a dozen major travel companies found that almost 38% will announce job cuts. In addition, close to 39% are forced to consider job cuts.

The survey also showed that 79% firms expected governments to create tourism relief funds at the soonest. In addition, 68% companies want GST rates to be lowered by at least 5%.

After the government announced the AatmaNirbhar package to revive the COVID-19-hit economy. Industry surveys have revealed about 73% travel companies have deferred salaries and terminated contracts. Further, close to 67% have cut overhead charges and a little less than 50% of surveyed firms have deferred expenditure.

The aviation, tourism and hospitality industries have employed over 65 million people.

The Federation of Associations of Indian Tourism & Hospitality (FAITH) represents tourism, travel and hospitality industries. FAITH had proposed a long term fund which was collateral and interest-free for payment of salaries and managing operating costs. It also proposed a minimum of 1 year of complete abandonment of fixed central and state statutory and banking liabilities. Further, FAITH prefers the liabilities to be without any penal and/or compounding interest.

The RBI announced a postponement on loans for six months, however, FAITH has not been given any of these propositions so far.

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