The collapse of the Indian tourism industry and the way forward


Simon Raven

As the world faces its biggest pandemic in a century, almost all the sectors of the economy are hit and will take a long time to recover.

Travel and tourism enterprise is a large part of our economy. The Indian tourism and hospitality enterprise has emerged as one of the key drivers to increase the various offerings area and tertiary sector in India. As per the commendable culture, diverse ecology, natural spots and historical places in various part of India, this sector has large potential to attract the tourists.

The fundamental goal of this service is to expand and sell tourism, keep the competitiveness of India as a visitor’s vacation spot and enhance and increase present tourism merchandise to make certain employment era and financial and economic growth.

It gives a different portfolio of tourism products – cruises, adventure, medical, wellness, sports, eco-tourism, film, rural and non-secular tourism. India has been searched and known as a vacation spot for sacred tourism for home and global tourists.


In recent years, India had experienced exponential growth in travel and tourism aided by different kinds of travel. The tourism sector in India generates significant revenue for the Indian economy besides contributing to the global output. The World Travel and Tourism Council (WTTC) reported that the tourism in India generated Rs.16.91 lakh crore or 9.2% of India’s GDP in 2018 and supported 42.673million jobs, that is 8.1% of its overall employment. According to the WTTC, India has ranked third amongst 185 nations in the area of tour and tourism’s overall contribution to GDP in 2018. India’s total foreign tourist arrivals (FTAs) stood at 10.9 million and the foreign exchange earnings stood at Rs 210,971 crore during 2019.


Tourism across the world is getting impacted although it might be more severe in India due to its large number of religious and historic places.

  • According to the estimates of  Indian Association of Tour Operators (IATO), the hotel, aviation and travel sector collectively may incur a loss of about ₹85 billion due to travel restrictions imposed on foreign tourists, which has resulted in large scale cancellations. In the third week of March 2020 itself, the hotel sector saw a decline of more than 65% in occupancy levels as compared to the same periods in 2019.
  • However, now with travel restrictions in India for over 80 countries and the international flights being suspended,  the Indian domestic travellers and FTAs will witness a significant decline during 2020. The sector is facing a potential job loss of around 38 million, which is around 70 per cent of the total workforce.
  • Even without regard to tourism, the cancellation of events will adversely impact the revenues of airlines, railways and buses.
  •  In addition, demand for petrol, oil and turbine fuel will substantially decline, thus affecting the petroleum and oil industries.
  • The impact will be felt on both white and blue-collar jobs.
  • Since airports would function at less than their normal capacity, it would impact the contract and temporary workers in the airports. The airline sector is also likely to mark a negative growth of 20-25%  in passenger growth for 2020-21.


The government are staring at a gradual recovery scenario of the tourism industry in India. For the recovery of the sectors few things have been proposed by leaders in the industry:-

  • Experts have a focus on the potential of domestic tourism and try to gain some profits through it.
  • Also, recommend cost optimisation at all operational level.
  • ICC suggests setting up a “travel and tourism stabilisation fund” with direct benefits transfer to each unit to prevent financial and job loss.
  • It is also being recommended to cautiously utilise the FF&F reserves. Operators would need to support the hotel owners.


Shilpi Kumari Yadav

Department of economic studies and policy

Central university of South Bihar

9 thoughts on “The collapse of the Indian tourism industry and the way forward

  • July 23, 2020 at 9:58 AM

    Great work and very informative….. Keep writing 👍👍👍

  • July 23, 2020 at 10:04 AM

    Great job keep writing shilpi 👍😊

  • July 23, 2020 at 4:49 PM

    Truly appreciated……..looking forward many more writeups


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