Inbound Tour Operators who bring in foreign tourists and earn valuable foreign exchange for the country, collapsing - need urgent monetary support to survive
02 June 2020
Shri Shaktikanta Das
Governor
Reserve Bank of India
Central Office Building
18th Floor, Shahid Bhagat Singh Road
Mumbai-400 001
Dear Mr. Shaktikanta Das,
Sub: Inbound Tour Operators who bring in foreign tourists and earn valuable foreign exchange for the country, collapsing - need urgent monetary support to survive
Indian Association of Tour Operators (IATO) is India's National Apex Body of Tour Operators with a membership of over 1700 across the country. Our membership consists of inbound tour operators, travel agents, tourist transport operators, hotels, airlines, state tourism departments, and other stakeholders in the tourism & hospitality industry. The Membership of IATO controls over 90% of all inbound tourism into India. All our active members are recognized by the Ministry of Tourism, Government of India who is earning valuable foreign exchange for the country.
Most of our members are small and medium self-employed entrepreneurs. Presently business of all our members is closed with zero billing and no cash flow. Out of over 1700 members of our association, 90% of our membership consists of small tour operators, and under the present financial crisis, they do not have funds to survive and pay salaries to their staff. There is uncertainty amongst the tour operators as to how and when they are going to revive their business. It is expected that the vaccination shall take about one year to come in rescue of human life that is April 2021 and by that time again our offseason will start from April 2021 to September 2021 to make the period of revival to 18 months.
Sir, if inbound tour operators disappear, the foreign tourist wouldn’t be able to visit India under professional guidance for package tours at competitive rates. Those who dare will find it very expensive and will be on their own. Also, most foreign tourists will not be able to find their way through this maze, called India, this service our very able members provide with proper guidance and a high standard of Security and Safety. Further tour operators are also playing a vital role in bringing in valuable Foreign Exchange and create multiple jobs at every nook and corner of our country.
The tourism industry is in dire need of financial support from the government so that tour operators do not close down their business and continue with their experienced staff after the COVID - 19 is controlled and tourism is back to business. If no financial support is provided, all these young tourism professionals will have no other option but to be without a job and wait for the tourism to revive or to leave the tourism industry and wait for long to learn other jobs and join other industries, which will be a great loss of skilled tourism professionals and service providers.
Under the circumstances we are looking for the following support from the Government for survival:-
1. Non-Collateral loans to the tour operators under MSME:- Hon’ble Finance Minister in her speech announced Non-Collateral Loans to MSMEs including the service sector. But as per the notification, it is only valid for those companies who already have a relationship with the banks. Any company that does not have any existing loan or new registered MSME companies does not qualify for any fresh loan under the scheme of loans to MSME announced by the Hon’ble Finance Minister. Also, benefit given for the companies who are registered under MSME, the loan is 20% of the existing OD facility/loan utilized as on 29 February 2020 shall be eligible. We would like to request you to kindly ease the rule for new registrants.
2. Tour Operators declared under high-risk category by the Banks:- Tour operators, tourist transport operators, travel agents, etc. have been kept under high-risk category and no fresh loans including vehicle/car loans are being provided to them by the banks. Also, the overdraft facility for the tourism stakeholder has been restricted and in some of the banks, the OD amount has been reduced without intimation. This has put the credibility of tour operators and other stakeholders in a big cash crunch.
3. Moratorium on Bank Loan EMIs:- RBI has provided six months moratorium on EMIs of principle and interest payments on loans from banks/Financial Institutions. May I request that it should be without any accrued and accumulated interest during this period and it needs to be extended for twelve months for Tourism Industry.
May I request that the above issues may kindly be looked into favorably so that at this juncture, when the tour operators and other stakeholders in the tourism industry are struggling for survival, they can get loans from the banks and their OD limit is maintained. This will help with survival and save thousands of jobs.
Thanking you and with best regards,
Sincerely,
Pronab Sarkar
President
(M) 9811102111