The Federation of Associations in Indian Tourism
and Hospitality (FAITH) has raised serious apprehensions of massive
employment loss and irretrievable image loss to India as a tourism
destination if the Supreme Court order banning liquor in hotels and
restaurants located on the state and national highways in the country is
not revoked. The collective body of Indian travel, tourism and
hospitality associations has said that there will be one million job
loss in the industry and loss of foreign exchange earnings as foreign
tourists will give India a slip from their travel itineraries.
“India’s Tourism, Travel & hospitality industry is
estimated to contribute USD200 Billion, 9.5% of Indian GDP, around 5
crore employment, I.e. 9% of Indian employment, USD$ 30 billion+
investment at 5.5% of total capital investment in India. This capital
investment is immobile and cannot be relocated or picked up and moved
driven by decisions which challenge their business models on a
retrospective basis,” an official release by FAITH said.
Quoting the famous Kashmir speech of the Prime Minister,
Narendra Modi, asking the Kashmiri youth to embrace tourism or
terrorism, FAITH said that, “displacing such a larger population from
tourism jobs will run the risk of a nationwide unemployment roughly
estimated at a million plus with the consequent risk of pushing this
working population towards undesirable activities to earn their and
their dependants' livelihoods.”
The federation also warned about large scale cancellation of
foreign inbound trips to India in the wake of this ban. Even domestic
tourists will start looking for alternate destinations abroad for their
meetings, conferences, etc. “A major reason for meetings, conferences,
corporate events, weddings and exhibitions to be held at hotels in India
is to combine them with social get together which includes food,
beverage and entertainment experiences. India has less than an estimated
0.5% of the world share of this sub-sector of tourism which will see
large scale cancellations. That has already started happening. Tourists
who bring in $20bn + forex earnings will reduce their coming to India
and a large number of Indians will increasingly prefer travelling out of
India for such events leading to a major outflow of foreign exchange,”
their official statement said.
The loss of business to
hospitality establishments on highways will push many hotel investors
into financial stress resulting in assets become NPAs. “Most of the
entrepreneurs who bid as part of Government PPP tourism projects along
national and state main roads and highways had modelled their cash
inflows on these experiences considering room conferencing, food,
beverages revenues over their concession periods. But a lot of these
establishments' with reduced business will result in distressed
financial assets and may lead to a large scale NPA situation for our
banking and financial system and may severely impact the investment
climate in tourism and hospitality and overall business environment in
India,” added FAITH.
However, FAITH said that the tourism and hospitality industry
value human life and assured support to stricter enforcement of law to
contain the menace of drunken driving. “However, the tourism industry
requests that on a retrospective basis any damaging impact on
investments in fixed capital assets and on large scale employment should
be re-considered while strictly ensuring enforcing through effective
policing for the very noble social cause and goal of preventing 'drunken
driving with zero tolerance.”