Manali: The global coronavirus pandemic, which has shaken the country like never before, has become a disaster for the economy of Himachal Pradesh, with tourism, one of its key sectors of growth and living, in complete shutdown for more than a month. What’s more, there’s no chance of revival, either in the peak summer or even later in the year.
The crisis hit the state’s hospitality sector after the Himachal Pradesh government closed down its borders on March 20, and flushed out all tourists – domestic and foreign, — staying in hotels and hundreds of home stays. Restaurants, health resorts, yoga and meditation centres and religious shrines have all been totally closed.
Most tourist destinations and towns which would attract thousands of tourists and holiday makers this time of the year are empty, or rather have turned into haunted towns. The picture looks more depressing when one looks at multi-crore hotels and resorts, many of which came up just three to five years back.
As per the lockdown rules social, religious, sports, adventure, cultural and family gatherings, even weddings, are not permitted in public places. This has had a direct effect on the hotel and hospitality sector.
As tourism is India’s largest service industry, accounting for 6.23% of the national GDP and 8.78% of the total employment. Himachal Pradesh, a state known for its world famous hill destinations, gets more than 7% of the state’s GDP from tourism. At least 30 percent of the state’s population earns its livelihood directly or indirectly from tourism.
The hoteliers are out of business and substantial workforces, including hospitality professionals, are either out of jobs or sitting idle. Many have gone back home while the few stuck at different places have run out of survival. “How long will the hoteliers pay or feed us without business? They too have liabilities towards banks for loans, taxes to the government, electricity bills and other charges. Coronavirus has dealt a severe blow to a boom industry and livelihoods. We foresee lockouts and permanent closure of hundreds of hotel units,” predicts Sanju, a head waiter at Manali Meadows Boutique home stay in Manali.
The predicament has hit Manali and the state at a time when the tourism sector was gearing up for a packed summer season.
Ritesh Sood, a Manali based tours and travel operator, “My agency, Himalayan Travels, had invested several lakhs. The coronavirus outbreak has hit Himachal Pradesh with a triple whammy. My 100 percent bookings got cancelled, forcing me to refund the money paid in advance. There is no hope for revival, at least for two years. Even if the lockdown ends, coronavirus will scare away foreign travellers as they don’t trust the medical facilities here.”
Because of the lockdown and social distancing guidelines to restrain the spread of coronavirus, tourism industry stake-holders are not very hopeful of business as usual anymore. New protocols on social distancing, set out by the government, will make things very tough in the coming days.
“There will be no foreign travellers coming to India, or Himachal Pradesh, for two to three years. Post lockdown, we may see a few weekend tourists venturing to Manali from Punjab, Haryana or Delhi by October-November to chill out in the hills. But the chances of hotels opening up or tourist arrivals for the summer is out of the question,” says Satish Kachroo, a tourism sector old hand and hotelier.
He sees a grim picture where tourism sector investors will have to seek a rescue to pay their loans and taxes in the absence of any business. Tourism, without support from the government, will become a sick industry Kachroo added.
The hoteliers are putting pressure on the government for a relief in property taxes, and other pending dues like demand charges for electricity (during the shutdown period) and deferment of some recoveries like water bills.
Tourism Industry Stakeholders, in a letter submitted to chief minister Jai Ram Thakur, has demanded a special package to keep going during post lockdown .
Manali Hoteliers Association president Anup Ram Thakur said, “It might take at least 12 to18 months to bring the Himachal tourism industry back on the rails even after normalization. This is because the main contributing states, including Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, Delhi, and parts of south India are badly affected by the coronavirus crisis.”
The hoteliers also want working capital to kick start the business as they don’t have any backup money to pay salaries or meet recurring costs. The association has demanded that the relief package should cover water, electricity, sewerage and garbage collection fees, besides property tax and demand charges by the state power board.
Apart from this, the body has asked the government to consider liberal working capital limits, term loans and enhancement of existing limits with a nominal rate of interest.
There are 3200 registered hotels in the state and 1300 home stays. Manali alone has nearly 2000 hotels, both registered and unregistered. Thus, the number of hotel units and home stays is very high in the state. More than 95% of the tourism units are small and medium enterprises. These units hardly have any cash reserves to ensure payment of staff salaries, electricity and water bills, taxes, loan interest, rent, insurances and repair and maintenance costs.
Anup Thakur is particularly worried about the world famous destination facing a shutdown.
“Tourists will visit Manali or other places if they have surplus money and want to spend lavishly. Foreign tourists are so scared they won’t step out of their country. Every single country is in crisis. Thus, it’s safe to assume that tourism has gone for a toss in the state for now.”
He too looks up to the government for working out some revival package to entice domestic tourists at least. “I have submitted an 11-point memorandum to the chief minister for consideration but haven’t got any response so far,” Thakur says.
Chief minister Jai Ram Thakur admits that the tourism sector is likely to bear the impact of the coronavirus pandemic in Himachal Pradesh. Even as the government proposes to gradually unlock some activities, there is no immediate hope for arrival of tourists, maybe not for another three or four months. Meaning that the summer tourist season has no chance to revive.