Ray of light: RBI has given optimism to tourism and hospitality sector

By Anindita Acharya  

When was the last time you packed your bags, booked tickets and travelled to your heart desire? Yes, the obvious response would be before the Covid-19 pandemic hit us in 2020 and disrupted everything in our life. Doesn’t it look like ages before?

According to the World Travel and Tourism Council (WTCC), the Covid-19 pandemic had nearly cost the tourism industry almost USD 22 billion and resulted in a loss of almost 50 million jobs worldwide. Therefore, it was no surprise when the tourism sector in India witnessed a sharp decline post pandemic in 2020.

In fact, the organised sector alone is likely to lose US$25 billion. According to the CII-Hotelivate report, the figures are staggering and some immediate steps are needed for the survival of the sector. 

But there seems to be ‘light at the end of the tunnel.’ At least for the time being, the Reserve Bank of India (RBI) has infused some fresh energy into the travel and tourism sector of India when it announced separate liquidity window of Rs 15,000 crore for the hotel and restaurant, tourism and aviation ancillary services, which are severely hit by Covid-19. It is being opened till March 31, 2022, with tenures of up to three years at the repo rate.

The Federation of Hotel & Restaurant Associations of India (FHRAI), President. Gurbaxish Singh Kohli believes that this is a crucial first sign of the Centre taking note of the dangerous effect that the Covid-19 has had on the hospitality industry and the massive impact it will have on the nation as well. He further said the infusing liquidity to the cash-strapped industry will at least boost the sector. 

“However, FHRAI also believes that the term should be for at least 5 years. A duration of 3 years is just not sufficient to recover from the financial imbalance that the industry is going through at present,” said Kohli.

KB Kachru, president of Hotel Association of India, echoed similar views. According to him, the RBI’s liquidity model will provide some relief to the hospitality sector.

Chandramouli Thakur, business head of Miles Tourism, said, “The Covid-19 has crippled the travel and tourism industry. It would take a long time to recover the massive loss the sector is still facing. The RBI has given some hope. But with the third wave coming, how far the industry will survive we don’t know.” 

For trekker Arijit, it is important that the government steps up to save the hospitality and tourism industry. “Work from home facilities are available in other sectors but is it applicable in tourism? We haven’t travelled for two years. Even if we want to, we dread thinking about our families. So, the government should come up with more steps to solidify this sector,” he said.  

Kachru believes RBI’s liquidity window has given an additional lease of life to several hospitality establishments that are on the brink of closure. It will also save several ailing hotels. 

Indian Association of Tour Operators (IATO) president Rajiv Mehra, said, “We welcome the announcement by the RBI offering loans to the tourism and hospitality sector on easy terms and lower rate of interest. Hope tour operators who have had almost zero income for more than one year now, would get some succour out of it”.

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