Coronavirus has created a global catastrophe with far-reaching implications for the hospitality sector. This sector has never witnessed such a sharp decline in its operations.

According to the World Travel and Tourism Council's Economic Impact Report, before the pandemic, the travel and tourism industry, directly and indirectly, accounted for 10.6 per cent of all jobs and 10.4 per cent of global GDP. However, in 2020, due to Covid-19, 62 million jobs were lost, a 18.5 per cent drop.

Global airlines, according to the International Air Transport Association, would need an emergency reserve of up to $200 billion to survive.

The Covid-induced lockdown has wreaked havoc on India’s hotel industry. Every year, this sector in India brings in billions of dollars. Despite being one of the fastest-growing businesses, this industry is more susceptible to external and internal crises. As per the findings of the Journal of Tourism & Hospitality , in India, this sector faces a possible employment loss of about 38 million, or 70 per cent of the total employment, as a result of coronavirus.

According to the Federation of Hotel & Restaurant Associations of India, the hotel industry’s income in FY 2020-21 dropped to ₹1.30-lakh crore from ₹1.82-lakh crore in 2019-20. In addition, the sector has been struggling to meet regulatory compliance and capital spending commitments since March 2020. Loan repayment with interest has further exacerbated its financial health.

According to HVS Global Hospitality Consultancy Services, hotel occupancy in major cities has dropped by a massive 45 per cent over the previous year. To make matters worse, the pandemic has affected the incomes of potential tourists besides creating an impediment to the fundamental reason for travelling: to see and explore other cultures. Chances of recovery and growth to the level seen in 2019 are remote, unless complete vaccination against Covid is done.

While most hotels foresee two to three years of decline, some anticipate a longer recovery time, making it hard to predict how the pandemic will affect their businesses in the long run.

Although the pandemic has brought the hospitality industry to an all-time low, the industry's ongoing efforts to introduce innovative techno-managerial interventions and new safety protocols bring some hope for recovery.

A study reported in Sustainability Journal shows that customers’ environmental concerns and trust in green hotel brands have risen as a result of their fear and uncertainty over Covid-19, and are willing to pay more to stay at green hotels.

Hence, it is incumbent on hotels to boost their green image by conserving water and energy, minimising waste, recycling reusable products, etc.

Further, they should develop effective marketing campaigns emphasising their eco-friendliness, and thus pave the way for improved brand recognition and reduction in trust deficit.

Now, more than ever, Indian hotels must be vigilant in adopting the rapidly evolving green practices.

Financial assistance

The Government, on its part, has taken financial stimulus measures with the intent of reviving all sectors of the economy, including the tourism and hospitality industry. Schemes such as free visitor visas for five lakh travellers, loan guarantee for Covid-affected sectors, LTC cash vouchers, besides incentives to travel and tourism stakeholders and registered tourist guides, have been rolled out.

Experts advocate continuation of subsidies and loan moratorium for a few more months, besides robust financial assistance on liberal terms to meet operating expenditures. However, it is imperative for the government to stress on environmental sustainable practices in the process of reviving the tourism sector

Destination Capital, a strategic advisory firm, has inked an agreement with the World Tourism Organization of the United Nations (UNWTO) to help revitalise the sector. This agreement envisages investment in green and sustainable tourism accommodations, especially in the aftermath of the Covid crisis.

Policymakers in India could seek financial and technical assistance from UNWTO to revive the hotel industry, if the need arises.

Pushing the sector to adopt more green initiatives and practices would also assist India in meeting the Sustainable Development Goal for climate action, as well as meeting its commitment under the 2015 Paris Accord to reduce its carbon footprint to 35 per cent by 2030.

Milind is Prof at MBM Engineering College, Jodhpur, and Manpreet is a post-graduate student

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