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Govt bailout must to salvage airlines and hotels, say analysts

Aviation, hospitality and media companies are facing an uncertain future due to the ongoing 21-day lock down of the country and would require bailout from the government immediately, say analysts. The aviation industry, which includes airports and their vendors and suppliers, may not fully recover any time soon post the effects of the pandemic, which has brought air traffic to a standstill. In the US, American Airlines has sought a $12 billion bailout from the government. In India too, airlines are seeking government help. In an analysis, rating firm CARE said domestic scheduled airlines have started facing severe cash flow pressures, as they will not be functional at all till mid April. This is also leading to trimming of employee salaries apart from other issues the industry faces. “Even after the nationwide lockdown, airfares are likely to be very low considering the lack of air travel demand, which will also lead to scaling down of certain routes,” it said. Passenger growth is set to fall sharply and register a negative 20-25 per cent growth for FY21. Till now, passenger growth was healthy at 13.7 per cent during FY19 and 3.7 per cent during FY20 (April-February). Given the fall in airline operations, airports are also likely to operate at less than 20 per cent capacity for the month of April and less than 50 per cent till June. Decline anywhere between 8 per cent and 15 per cent is expected for passengers handled (domestic and international) by airports. Covid-19 has also impacted March quarter for the hotels sector and as the lean season seeps in for both business and leisure segments from April, the hotel players will have some time to realign themselves (cost rationalization, process improvement measures) before the next peak season. As hotels have almost zero occupancies, Care says the operational parameters like occupancy rates – ORs & average room rates – ARRs of the hotel players are expected to get adversely impacted for next couple of quarters. "Though a medium term impact, this may lead to lower cash flows for the hotel entities and thus exert pressure on their profitability and liquidity," it said. The most visible and immediate impact of Covid-19 is seen in the hotel and tourism sector in all its geographical segments - inbound, outbound and domestic and almost all verticals - leisure, adventure, heritage, MICE, cruise and corporate. Given various travel restrictions imposed by the Indian Government as well as Governments across the globe, forward bookings for various conferences and leisure travel bookings to foreign destinations have already been cancelled. In India, most of the summer holiday bookings have been cancelled (about 40-50 per cent most of which was to states of Kerala, Rajasthan and Goa) impacting the domestic tourism. The impact on the inbound and outbound passengers is expected to be most severe in the next couple of quarters. India’s total foreign tourist arrivals (FTA) stood at 10.9 million and the foreign exchange earnings (FEE) stood at Rs 210,971 crore during 2019 with Maharashtra, Tamil Nadu, Uttar Pradesh and Delhi accounting for about 60 per cent of FTAs. However, now with travel restrictions in India for over 80 countries and most of the flights of major airlines being suspended along with lockdown in India, the Indian domestic as well as foreign travel and tourism industry is expected to witness a sharp negative impact in 2020. The print media and television, filmed entertainment, live events and out of home media will take a hit on their revenues. "Like other countries, the government must come with a special package to save these industries," said a CEO of a media company.

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Government bans issuing tourist visa to foreign Tablighi activists

The government has decided not to issue tourist visa to any foreigner who wish to visit India and take part in Tablighi activities, officials said on Tuesday. The decision has been taken after it was found that about 2,100 foreigners have come to India since January 1 and indulged in Tablighi activities in different parts of the country. Many of them have tested coronavirus positive. The Ministry of External Affairs has been advised that missions may be requested to refrain from granting tourist visa to such foreigner who is likely to use it for Tablighi activities, a home ministry official said. The home ministry told the MEA that it should ensure that details regarding place of stay and return ticket as well as financial means to defray expenses in India by such visa applicants must be examined carefully before granting them tourist visas.

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Oyo in talks with large hotel partners to extend payment timelines

Oyo is negotiating with large hotel partners to extend timelines for vendor payments and is seeking relief from the government along with the entire travel sector in the country amid the coronavirus crisis. Founder and CEO Ritesh Agarwal told CNBC-TV18 that the company will continue to make payments to its MSME partners. The worldwide lockdown due to the COVID-19 pandemic has hit the travel and hospitality industry the hardest, leaving the sector staring at massive job losses and payment delays. Agarwal said that many of Oyo’s 20,000 hotel partners in India who had sought loans to run their businesses have been impacted due to corporate payment delays and landlords not negotiating rents. The biggest worry for the sector is about taking care of staff, he added. “We have sizeable cash reserves and can meet payments for our teams and basic cash flows. But Oyo represents over 20,000 hotels across the country. As domestic tourism grew, many people took debts to set up hotels. They are now seeing corporate payments being delayed, landlords not negotiating on rent. Above all this, the biggest worry is staff,” Agarwal said. The Oyo founder reiterated that the company is talking to large hotel partners on extended payment timelines. “Oyo has broken vendor payment into MSMEs and large businesses. For MSNEs and SMEs, we ensure no payment disruption. For large corporations, we are discussing potential timelines for payments,” he stressed. Agarwal pointed out that the US and several countries in Europe were offering relief packages and support to the hospitality sector and their staff. “The UK, Germany and other nations have come out with significant pay packages for the sector. In UK, around 80 percent of employees’ salaries would be transferred by the government. We are also working with US authorities to get support for our hotels there. Singapore is also focusing on the bottom of the pyramid of the sector,” he noted. Agarwal said that the government needs to immediately defer statutory payments and support especially those employee whose salaries are below Rs 25,000 pay per month. Oyo is working with several states in India to offer space and services to address the COVID-19 crisis. “We are expanding capacity for isolation rooms with Apollo for asymptomatic or part symptomatic individuals. We are also enabling state governments,” he said. The company is also working to help those stranded globally due to the travel shut down. “Sixteen embassies contacted us in the last two weeks. We are working with them as well as several people who have been pushed out of their PGs and hostels to enable their stay,” Agarwal said.

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Australia’s tourism industry associations united in new demands for support measures

A powerful alliance of Australian peak associations active in the tourism industry has welcomed the federal government’s announcement of a fortnightly wage subsidy of A$1,500 per person, saying it would help to save the jobs of the thousands of Australians employed in tourism. The industry represented by the Tourism and Transport Forum (TTF), the Accommodation Association (AA), Cruise Lines International Association (CLIA), the Australian Federation of Travel Agents (AFTA) the Restaurant and Catering Australia (RCA) and the Business Events Council of Australia (BECA) welcomed the subsidy noting it was available to large businesses who between them employed tens of thousands of Australians. “This subsidy couldn’t have come soon enough and will help to save thousands more tourism employees from being stood down and being forced to join the unemployment queues,” the associations said, noting that hotels and restaurants, cruise, business events, aviation and the arts and cultural sectors are haemorrhaging billions of dollars per month as the tourism industry faces one of its biggest crises. “The tourism industry is losing almost A$9bn every month that the global pandemic continues and is forecasting job losses of well over 300,000 so we are calling on government to recognise the urgency of providing these employers with sector-specific financial assistance,” the association group statement said. “We acknowledge all of the steps taken by the Federal and State and Territory Governments are entirely necessary to ensure the health and wellbeing of Australians, but we are now at a point where our industry and its people are in the fight for survival. For many businesses, revenues have dropped to zero.” The peak bodies had sent a letter to the Prime Minister last Friday making a strong case for the tourism industry’s bigger businesses to be front and centre of any new economic lifeline package describing them as providing the scaffolding for the tourism sector and for business events. Key asks for larger businesses from the letter are as follows: The investment incentives announced as part of the first stimulus package should be extended to all companies. This includes the expanded instant asset write-off and the accelerated depreciation investment incentive. Monthly company tax instalments should be moved to quarterly instalments for a temporary period as they were during the GFC to provide some cash flow assistance. Federal government backed corporate guarantees would enable businesses to secure funding from financiers to ensure they can survive the crisis. The provision of rent abatements for all tourism businesses to help businesses survive while either closed or only offering limited service (e.g. takeaway), for the remainder of the year by implementing economic incentives for landlords to do this Major utilities relief in the form of a A$100m tourism, hospitality, accommodation and business events energy support package to minimise the cost impost of utilities on our sector. The peak groups said the sector will be critical to the Australian economy as it manages through the current survival phase and later into the eventual economic recovery phase. “In order for our businesses to play their essential role in any recovery, they need to still be operating. To be operating we need urgent federal and State and Territory government support. “These sensible reforms will help to ensure the nation’s essential visitor economy can survive the current crisis and come out the other side a stronger and more resilient industry.”

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SunExpress Launches Its Winter Schedule

SunExpress has recently suspended all of its international flights as part of the travel restrictions to fight against the COVID-19 outbreak. The airline has also halted its domestic flights from March April 28, 2020 to April 30, 2020 due to the decision taken by the Directorate General of Civil Aviation. SunExpress has announced its winter timetable in advance to ensure that its passengers who are affected by the restrictions due to the coronavirus pandemic and unable to make their flights can easily change their existing bookings in the coming period in accordance with the Turkish Civil Aviation Passenger Regulation published on 25 March 2020. The airline has released its winter schedule covering flights to be held until March 31, 2021 in order for people to be able to change their current flights for a future date in one year. It also will not apply different prices during the high-demand Christmas and seasonal holidays and offer its passengers the opportunity to travel at fixed rates during the holiday periods. SunExpress will offer a total of over 8,000 flights from Antalya, Izmir and Anatolia and 1.5 million seats in the 2020/2021 winter season. The airline which will add London to its European flights departing from Antalya and Izmir for the first time next winter season, also increase the number of weekly flights from both cities to Paris. In addition, SunExpress will operate flights to many popular European cities, including Amsterdam, Brussels and Eindhoven from Izmir, Brussels and Copenhagen from Antalya. SunExpress guests can view the new winter offers on the sunexpress.com website and make new bookings for flights between 25.10.2020 and 27.03.2021 with SunExpress’ special price offers. Passengers who are unable to travel due to flight restrictions can take advantage of the flexible rebooking options offered by SunExpress.

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WTTC implores G20 leaders to save tourism sector

World Travel & Tourism Council (WTTC) has urged the G20 leaders to execute crucial measures to save the travel and tourism sector following COVID-19, in a virtual meeting hosted by Saudi Arabia. According to the global tourism leaders, around 75 million jobs are at immediate risk. The association implored the G20 leaders to assign resources and coordinate efforts to rescue major travel businesses such as airlines, cruises, hotels, GDS and technology companies, as well as the SME’s, such as travel agents, tour operators, restaurants, independent workers and the entire supply chain, in order to save the jobs of the 330 million people who rely on travel and tourism for their livelihoods. The special virtual meeting involving WTTC was hosted by His Royal Highness King Salman of Saudi Arabia. It took place as WTTC released its latest annual Economic Impact Report. Gloria Guevara, president and CEO of WTTC said in a statement that the coronavirus pandemic has put the sector in unprecedented danger of collapse. She also shared that with passing days the fear increases unless a global rescue package is provided to bolster the travel and tourism sector that has become the backbone of the global economy.

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