If tourism had grown so well and so consistently, with little, if any, encouragement, what it would do with some help and support,” Antonio Savignac, former secretary general of the United Nations World Tourism Organization (UNWTO) and one-time planning and finance minister of Mexico, had said in a National Tourism Day lecture in Delhi 25 years back while discussing the importance of tourism in Mexico. These words reflect the general feeling in the Indian hospitality industry as well and to this day.
The Indian hospitality sector has a proud history of building a world-class industry which is known for excellence in service. Much of that history is built on what has now become the mantra of business, that is atmanirbharta. During this time, the industry never asked for any prop or support from the government to compensate for the inefficiency in its operations. Its demands were rather confined to creating the ease of doing business and incentives to overcome the disadvantages of operations inbuilt in the system.
The government has now made the public-private partnership as the cardinal point of each of its policy announcements, including in the latest budget speech, in which it announced a mission mode for tourism. However, the idea of partnership goes beyond private participation. It implies a structured relationship and cooperation system where partners share responsibilities, resources, risks and rewards. Though such a system is yet to emerge, on the brighter side, the industry is elated to wholeheartedly partner with the government in all its initiatives. The industry has fully cooperated with the government in all its initiatives, like sustainability, the millet campaign and the Swachh Bharat Abhiyan, just as it has cooperated with the corporate sector in its numerous path-breaking corporate social responsibility initiatives meant for public welfare.
The Indian hospitality sector carried the spirit of partnership during Covid-19, which can be considered the worst phase in its history. True to its commitment, the sector threw open hotel facilities for healthcare support, provided food, mostly maintained the staff even when there was no income and responded to all other requirements. To tide over the Covid-induced crisis, the hospitality industry had made constructive suggestions to the government to encourage business survival, like creating a long-term stable interest rate policy, liquidity support for small and medium enterprises (SMEs), such as a moratorium on payment of loans and interest, salary support for SMEs and relaxation in the payment of statutory dues, like electricity bills. The pandemic was a force majeure, and a little help in these areas could have saved many jobs and enterprises from going under.
A Tale of Two Disappointments
The industry feels specifically disappointed in two areas. First, the government did not provide the benefit of industry status to the tourism sector. Although some states have proposed a few benefits, tourism being a state subject, their implementation is tardy. It is true that tourism is not a traditionally organised factory-type industry, but the fact remains that it is one of the world’s biggest industries with the highest contribution to inclusive growth.
The second disappointment is that the sector has not got infrastructure status. The target of the tourism sector to attract 100 million international arrivals—as per the Vision 2047: Indian Hotel Industry report published by the Hotel Association of India—and the momentum of the incredible growth of domestic tourism, touching 2,000 million visits in 2019 and rapid growth post-Covid, may fall by the wayside if the supply side is inconsistent with this vision. The hospitality industry has the capability to fill the current gap, and a little help from the government can expedite the process.
The industry feels that a lack of action on these fronts defies logic and understanding, especially when one factors in the economic rationale. It is expected that these incentives can set in motion activities consistent with the government’s vision that will, in the long run, bring returns to the exchequer, directly or indirectly, many times more than their cost. It is surprising that many reports of the Parliamentary Standing Committee on Tourism supporting these suggestions have not brought any positive results.
Beyond the Five-Star Culture
Perhaps, there is a problem of wrong perception associated with the industry. The industry’s big brands have become its face. This “five-star” face has conveyed an impression for a long time that the sector has an elitist character. This is a palpably wrong and unfair perception to be carried to the domain of policymaking. On an average, SMEs comprise almost 80% of the industry all over the world. Reportedly, the Indian situation is also similar. Therefore, it can hardly be accused of being elitist.
Significantly, the G20 future roadmap, which was adopted recently in Goa, acknowledged the importance of SMEs in the tourism sector when it said, “Micro, Small and Medium Enterprises (MSMEs) ... [account] for 80% of all tourism businesses worldwide; the roadmap emphasizes the importance of public policies and public-private partnerships in addressing key challenges through the digital and sustainable transitions.”
There are certainly fresh winds of hope and expectations for the tourism and hospitality industry, and it will continue with its constructive role in collaboration and partnership with the government, keeping in mind the words of Martin Luther King Jr: “We must accept finite disappointment, but never lose infinite hope.”
M.P. Bezbaruah is an honorary permanent representative of the UNWTO and former secretary of the Union Ministry of Tourism