Crisis-Battered Tour Operators of Assam Seeking Govt Support to Survive
One time grant, collateral-free loans, and relaxed travel guidelines are need of the hour
With the pandemic gripping the country resulting in a depleting economy, Assam’s tourism industry has been left crippled. Although more the 5 lakh families of the state that are associated with tourism are severely impacted, the major blow has been dealt with the tour operators.
While many of the other stakeholders of the travel industry are gradually trying to cope with circumstances, the tour operators are left with no hope of recovery.
With unlocking, many activities of the state are returning to normalcy with strict Covid protocols in place. These guidelines, though implemented with noble intentions, have impacted the tourism sector adversely.
The Association of Domestic Tour Operators of India (ADTOI), Tour Operators’ Association of Assam (TOAA), the Indian Association of Tour Operators (IATO) and many others have been repeatedly appealing to the government for grants to survive the year.
Earlier, in a study conducted by the Confederation of Indian Industry (CII) and the hospitality consulting firm, Hotelivate, the Indian travel, and tourism industry has likely lost around Rs. 5 lakh crores.
While tourism in other states have been struggling with just the pandemic, for Assam the losses incurred has to be calculated from the beginning of the 2019-20 season, that is from the time of the CAA protests. And with no hopes of an early revival in the coming season, the Assam tourism industry is staring at another season of a complete loss.
And the expiry of the loan moratorium period has only added to the fast depleting resources of the stakeholders.
On 14th September last, Union Minister of State for Tourism, Prahlad Singh Patel, informed the Lok Sabha, “The Government of India has declared stimulus packages like loan moratorium, waived off PF contribution, deferment of TDS up to October 2020, collateral-free automatic loan under Atmanirbhar Bharat package, etc to revive the economy and industry including units of the hospitality industry.”
However, the loan moratorium has already expired in Assam on 31st August last, facilitating loan agents to seek quick recovery. Further, the above-mentioned loan moratorium and loan under Atmanirbhar Bharat package are only extended to those loanees who have bank loans, whereas, a majority of the tour operators are found to have procured loans from private agents, rendering them ineligible to avail the benefits.
G Plus spoke to Arijit Purkayastha, Chapter Chairman of North East, Association of Domestic Tour Operators of India. He informed, “The calls from the recovery agents are distressing to all. With no business in hand and nothing much to look forward to, how are we to pay? Apart from other loans, I have to pay interest for three commercial tourist vehicles that amount to Rs. 70,000 per month.”
“Tourism business in Assam and northeastern India was buzzing, so I procured three large luxury vehicles. That is what tourists ask for. Now there are neither tourists nor any source of income to pay. These vehicles are lying useless for the last six months, but I still have to continue paying. Soon after August, now the recovery agents are calling continuously, unwilling to understand our struggles. It’s almost like threats. We were doing a respectable business but now we are forced to stoop for survival,” he added.
Many tour operators have also been looking for selling off their newly acquired vehicles to get off the loans. Operators posting advertisements, searching for potential buyers are seen across social media platforms regularly. However, with banks denying refinance, the same has not been possible.
“The cars that tour operators have are luxurious, hence expensive. They’re around Rs. 14 lakhs each. People cannot afford to buy these, even second-hand ones without a loan. In the present situation, people are usually wary of seeking a loan and even if they do, refinancing is not available,” said Purkayastha.
Manisha Das, a young entrepreneur in the travel industry said, “I started my own tour operation in May 2019. With major investments in office, documents, staff, interiors, etc, now all have amounted to liabilities. As a start-up, I took personal loans from the bank as well as from private investors. But without even one season to earn back, my resources are almost over. Plus I need to pay for trade license, tour operator’s membership, and much more. How will I survive?”
It needs to be mentioned that the tour operators have been working as the backbone of the travel industry. The local tour operators are the actual arrangers of the travel itineraries, offering safe and comfortable travel for tourists. They are the actual hands behind the functioning of major tour agents like Make My Trip, Thomas Cook, SOTC etc, ensuring the smooth functioning of the tour packages. They are also the actual promoters of the state in the guise of promoting local destinations, cuisine, traditions, activities, and much more.
Relief-packages and travel relaxations:
Reportedly, some states of the country have already announced relief packages for the crisis-battered tourism sector. The Kerala government has announced a package of Rs. 455 crores for the industry. The package consists of a new infusion of funds up to a maximum of Rs. 25 lakhs to tourism entrepreneurs, 50 percent interest of which will be borne by the state government. Likewise, the workers in the industry will get a loan of Rs 30,000 from the Kerala Bank at an interest rate of 3% and repayment will start only after six months.
Apart from the financial strain, the travel guidelines implemented by the state as Covid-19 prevention measures are also adding up to the inconvenience of the tour operators. In Assam, a person who travels outside the state and returns within 96 hours will not be put into home quarantine (subject to certain conditions). But travellers who visit Assam must return within 72 hours to avoid getting quarantined.
“The 72 hours limitation is preventing people from travelling to the state. Usually, tourists take packages of say Kaziranga, Shillong, or any other nearby state. Although the guidelines give 72 hours time, but in fact the day of arrival is spent in screening and other formalities. So tourists will be left with very less time to travel,” said Arijit Purkayastha, Chapter Chairman ADTOI.
Different tour operators have also pointed out that the tourism sector will soon be reopened with the advent of the season, with Kaziranga National Park reportedly reopening on 2nd October. But given the surging coronavirus positive cases and the strict rules implemented by the state as well as the central government, only domestic tourists are to travel, if any. Domestic tourists are often seen settling for self-made itinerary, travelling by personal vehicles, and opting for self-booked hotels, thus limiting the role of a tour operator. As such, these operators have been adjuring the government to relax the travel guidelines and provide for grants to survive the pandemic.
“We do not have cash reserves. We need some immediate one-time grant to retain our employees and revive business. We have also been demanding collateral-free soft loans to survive in the future as we do not know how long it will take for complete recovery,” said Ranjeet Das, President of Tour Operators’ Association of India.
Nirmalya Choudhury, Chapter Chairman of IATO told G Plus, "Lots of passion, expertise and hard work are required to run a tour operator company. Hence experts are employed for the same. If the government does not provide any fiscal interventions, these resources will not survive a year."
"I have suggested the Kerala model of relief package to the Tourism department. They brought together all the co-operative banks of the state to form one bank, called the Kerala Bank. And the relief scheme was thereafter announced. It can definitely be done in our state without Central funding. I also forwarded this to the 7th Advisory Committee but nothing has been done as of yet."
Prior to Covid, the travel and tourism industry was the third-largest foreign exchange earner in India with a 17.9% growth rate in March 2018 over March 2017. According to the World Travel and Tourism Council (WTTC), tourism generated 240 billion dollars or 9.2% of India’s GDP in 2018 and supported 42.67 million jobs. But with no tourists this year and in the absence of proper financial help, between 30 to 70 percent of the organised operators are likely to go out of business within a year.
Hemanta Das, Director of Network Travels added, "Our bus services have remained non-functional for the last 180 days. We request the state governments of the entire northeast, as tour operators of all NE states work as a single platform, to issue standard operating procedures (SOP) for the restart of tourism activities so that people can prepare from now. And a definite date for reopening of tourism in northeast India must be given immediately taking all stakeholders into confidence."
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