Surviving Challenging Times: Can Tourism Industry Retain Its Workforce?

Ever since the outbreak of coronavirus, the travel and tourism sector has been overwhelmed with cancellations. Businesses are assisting its guests who found themselves stranded due to various travel restrictions or flight cancellations etc.

Even as many frontlines of the industry work tirelessly, some even risking their lives, business owners are facing hard choices that they need to make in near future, to sustain their businesses and minimise the job loss which at the moment seems inevitable.

According to a report published in Financial Express, Federation of Associations in Indian Tourism & Hospitality (FAITH), the umbrella body of the industry, estimates that around 3.8 crore, which is 70% of the total workforce of around 5.5 crore (direct and indirect) could get unemployed as a result of the economic impact of coronavirus outbreak. It is understood that job losses and layoffs have already begun throughout the country

Due to spike in cases of covid-19, the government of India recently ordered a nationwide lockdown. Many travel agencies, hotels, airlines and other related businesses have chosen to shut shop or scale down on business operations to cut costs. Some of them may never open up again

According to an advisory issued by the government of India, businesses have been advised against laying off their employees or cut their wages.

Travel Newsy interviewed a few prominent business leaders of the industry to understand the impact of covid-19 on their businesses and how feasible it is for them to sustain their business without cutting down on their workforce.

Keeping Motivated and The Way Forward:

First and foremost, it is important to make the team realise that like everything else in the world, this too is temporary.

Secondly, we need to be honest with them and let them know that the time frame of the lockdown is unknown.

We need to lead by example, therefore given the circumstance the directors have foregone their entire remuneration for the fiscal year 20-21. In addition to compensating for pay cuts, we have incentivised the team with 100% of 2020/21’s profit

Feasibility of business and Governments Advisory against cutting Jobs / Salary

It’s going to be tough for everyone in the industry. We have three times the debtors as creditors. The government owes us a large amount of TDS. If the government refunds it, it will help us greatly in solving liquidity woes.

If not will have to ask the banks for support during this lockdown period. Also, the government needs to instruct banks to only charge interest for the coming financial year and not look for principal payments

The government on its part has done the right thing by issuing the advisory.

Practically it’s not possible for our industry to retain more than 30% of staff without government intervention. If the hotel goes bankrupt how do we pay the employees? Self-isolation and nation-wide lockdown is the best way to contain the virus.

The government led by the PM has taken the correct decision. As faster we get rid of the virus, faster will the economy revive.

Government Support 

The government needs to first recognise jobs have been lost and revival will not happen immediately. In the second phase, they should make a list of the employees and start direct transfers for the period of lockdown. In phase 3, which is post COVID they need to share a part of the wages of the re-employed casual workers at the hotels.

Keeping Motivated and The Way Forward:

The tourism and hospitality industry is very fragile. Any disaster natural or manmade effects tourism of that area immediately and this time we are talking about a pandemic that’s affected tourism globally.

The severity of the situation cannot be taken lightly and the road to recovery is uphill. In this scenario we have to be resilient, stay strong and united in the face of adversity. It’s time to re-think and re-align future strategies.

Since our core business is MICE and events, we are using this time to connect with our corporate customers and partner hotels. Also, we run an online platform that proactively connects the end-users and suppliers, so our team is busy updating, adding new hotels, re-aligning and innovating – adding new hotels to the featured hotels category.

We are understanding future business requirements and ensuring that we can help our customers and supply chain have a pipeline for the balance year. The mood is sombre of course but we are positive and hopeful that the world will recover in 3-4 months and the restrictions across nations will be lifted. 

Feasibility of business and Governments Advisory against cutting Jobs / Salary

We support it totally. Our business model is such that we have a lean team, so thankfully no job cuts or salary cuts for us. Our backend is IT, so work goes on as usual. The great part of having a tech-driven platform is that we can work from home. In our company we have had this policy that work should get done in stipulated timelines – so whether from home, a cafe or office – the choice is ours. We are having our calls and zoom presentations and it’s not such a problem for us. 

Like I said above, our overheads are comparatively very less and we are good for the next three months as we had a buffer for a no business situation. However, we spend a lot on digital marketing that is outsourced so I will be forced to cut that down or start in-house. Office rent is also a cost and we will cut that down too if this continues for 2 more months so that salaries don’t get compromised.

Government Support

It should assist definitely. While in other developed and even not so developed countries, Tourism has a primary industry status, sadly in India, the tourism industry is run as a 100% private sector. The private players have led it across all sectors whether it’s inbound, outbound, MICE, or domestic.

I am looking forward to what relief measures the government is going to put in place – our industry has asked for a tax holiday, funding, etc. On the revival part, it all depends on the situation and how fast it improves. India has a good tourism marketing budget; I hope that gets used wisely

Message for the Industry

In this time of a nationwide crisis, I urge my travel fraternity to stand united. The way forward is collaboration and not competition. Take care of your employees. They are our front runners.

Also, we need to have a collaborative approach, join hands. But I am afraid once this is over there is going to be a mad, mad rush for securing business under any circumstances. Many will undercut, extend credits, pass on discounts and commissions to clients, indulge them – my request is PLEASE DON’T DO THAT!

The situation has ripped our hearts apart already – let’s please keep our souls intact. Let’s have some best practices and minimum pricing guidelines for all to follow.

I also feel that the various and numerous trade associations and bodies we have, not one of them had a vision – a vision for disaster planning.

The funds they have accumulated from the memberships get used in various networking activities but there is no disaster management committee, no ethics body to address issues, no insurance for such unforeseen disasters. I think associations should allow younger thinking minds from trade to take leadership positions. There are so many conditions to participate in these trade elections that the proactive and younger lot just stays away from these things! The time is right for strategizing and innovative minds to take the industry forward.

Keeping Motivated and The Way Forward:

We are keeping our teams occupied by preparing ourselves for the times to come when things become normal. We are working on the various aspects of the portal and trying to make our processes as seamless as possible

Feasibility of business and Governments Advisory against cutting Jobs / Salary

It is going to be very difficult task to continue to pay everyone full salary with so much uncertainty and no help coming from the government. Travel industry has been hit very hard and the recovery is going to be a long and slow process

Government Support

There is going to be a massive job cut for sure and measures like salary cuts are important to cut overall exposure. The travel industry needs a big helping hand from the government to survive this. 

Message for the Industry: I would like to say that recovery of business is going to be a very long and slow process, cooperate with each other as much as you can, be it be a supplier or a customer. so next 6 months are very crucial for the industry

Conclusion:

Interviewing these prominent business leaders from their sector, it is understood that covid-19’s immediate economic impact on some businesses is more than others, it is all however closely interlinked. The co-dependency of all sectors has never been felt to be more important ever before. 

It is a time for all business to come together, to support each other and support our employees

Industry:

The revival of the Industry also depends on healthy business practices and avoiding undercutting, or short selling to gain business edge temporarily as it can extend the prolong the industry’s recovery process.

Government Support:

Even as industry and trade organisations have actively been raising concerns to the government in relation to TCS, and a relief package from the government for immediate support of the industry.

We urge the government of India to support the travel industry with a stimulus package with an aim to minimise any job loss, and stimulate a swift recovery process

The Trade Organisations

Even as the entire industry sets its eyes upon the government for support, it is important for trade organisations, to devise a co-coordination mechanism between different sectors of the tourism industry to be better prepared for any such crisis situations in the future. Most Importantly an industry-specific insurance or employment security scheme that gets triggered specifically in the times of crisis could be big support for employees