23 Jun , 2021 By : Kanchan Joshi
The domestic tours and travel sector, which showed signs of recovery before the second wave of covid-19 showed up, is expected to report only 35%-40% of pre-covid revenue during the ongoing fiscal year due to a significant decline in travel appetite, rating agency Crisil Limited said in a statement on Wednesday.
"While companies have raised capital last fiscal and will continue with cost-control measures to cut cash losses, a significant decline in travel, and continued uncertainty about the pandemic will weigh negatively on their credit profiles," it said.
This includes tours and travel operators providing services such as air, bus ticketing, hotels, packages for both leisure and corporate travel within India and overseas.
"This is as per Crisil’s study of three sector majors that account for over half of the domestic tours and travel industry, with reported revenue of Rs11,300 crore in fiscal 2020," it added.
Tour and travel operators saw their revenues plunge to Rs2,300 crore last fiscal (FY2021), which was only about 20% of FY2020 levels, after the nationwide lockdown and other restrictions led to a sharp reduction in travel.
“With states beginning to ease restrictions and vaccination rates expected to improve, we see domestic travel picking up slowly from the second quarter. However, segments such as international holidays and inbound travel may see recovery only in the second half, and that too only if travel restrictions are eased in foreign countries," said Manish Gupta, senior Director at Crisil Ratings.
"Also, with meetings and events shifting to the online mode, corporate travel is expected to remain under pressure. Overall, therefore, revenue this fiscal (year) may reach only a little over a third of the pre-pandemic level," Gupta added.
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