Pandemic Impact: Tourism Industry's Share in GDP Falls 120 Bps to 4.7% in 2020, Says Report

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The share of the travel and tourism sector in the GDP reduced by 120 basis points to 4.7 per cent in 2020, from 6.9 per cent in 2019, due to the impact of the coronavirus pandemic that led to a de-growth of over 36 per cent in the sector, according to a report. Quoting data from the World Travel and Tourism Council, SBI Research in a report said contribution of the travel and tourism sector to GDP went down from 6.9 per cent in 2019 to 4.7 per cent in 2020.

The first wave of the pandemic led to a whopping 36.3 per cent de-growth in the the travel and tourism sector, according to the report. This has led to the number of jobs going down from 4.01 crore in 2019 to 3.18 crore in 2020, indicating a 20.8 per cent decline in employment, indicating the massive hit the sector took in the year, it added.

The major revenue for the tourism sector comes from domestic travellers, which in 2019 stood at 82 per cent and increased to 89 per cent in 2020, as airlines were not allowed to operate scheduled commercial flights, the report said. To boost international travel, on the demand of industry, the government on Monday announced free tourist visas till the end of March 2022, or till five lakh visas are issued, whichever is earlier.

The overall expenditure is expected to be Rs 100 crore on free visas, the report said. The government had on Monday extended 100 per cent credit guarantee of Rs 10 lakh to each agency for 904 travel and tourism stakeholders recognised by the Union tourism ministry, as well as Rs 1 lakh per guide for 10,700 tourist guides licensed at regional or state level.

The Reserve Bank of India had earlier announced a special window for contact-intensive sectors like tourism. Loans will be provided with a 100 per cent guarantee and will cover 10,700 regional-level tourist guides recognised by the states.

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