Travelling, leisure or business, has been a regular phenomenon of our society since ages. Over the years, this activity though being of the nature of services, has gained status of industry offering employment to hundreds of thousands people globally. Its contribution to a nations GDP is remarkable.
In recent past, corona pandemic had caused substantial damage to this industry, the tremors of which are being felt even now. However, globally the pandemic has been tamed and the world is all set to travel again.
Having said this, damage control will take time. Infrastructures like hotels, airlines, transportation are still not fully geared up to serve the desired volume. INR - USD exchange rate is all time high. All these has led to increase in cost of travel and resultantly, though demand is there but supply is coming at higher cost.
Recent war between Russia and Ukraine had also affected the industry adversely. Now with China and Taiwan coming closer to the verge of war will also have alarming adverse effect.
Amidst all these negative sentiments, the positive vibes is coming from desperation of people at large to travel. They lived in cage like situation for last two years and are willing to undertake travel.
INDIAN ECONOMY
Research conducted by the World Travel & Tourism Council (WTTC) has revealed the travel and tourism sectors contribution to the Indian economy could surpass pre-pandemic levels this year, with a year-on-year growth of 20.7%.
The forecast from the WTTCs latest Economic Impact Report (EIR), shows the sectors contribution to the nations economy could reach almost Rs 15.9 trillion (U.S. $215 billion) in 2022, 1% above 2019 levels.
Employment levels are set to grow to almost 35 million travel and tourism jobs, with an 8.3% growth this year.
Over the next decade, Indias travel and tourisms GDP is expected to grow at an average of 7.8% annually, compared to 6.7% of the Indias overall economy, to reach almost Rs 33.8 trillion (U.S. $457 billion) - representing 7.2% of the total economy.
The forecast also reveals the sector is expected to create over 24 million jobs over the next decade, averaging more than 2.4 million new jobs every year.
Julia Simpson, WTTC President & CEO, said, “After the pain suffered by Indias Travel & Tourism sector, the future looks bright with travel and tourism to and from India set to exceed 2019 levels. The outlook for the next decade is looking very positive with India accounting for one in five of all new travel and tourism jobs globally.”
Before the pandemic, Indias travel and tourism sectors contribution to GDP was 7% (?15.7 trillion, U.S. $212 billion) in 2019, falling to just 4.3% (?9.2 trillion, U.S. $124 billion) in 2020, which represented a shocking 41.7% loss. The sector also supported more than 40 million jobs in 2019, falling to just over 29 million in 2020, when the pandemic devastated the sector.
Following the significant decline in 2020, the global tourism bodys latest EIR report reveals that 2021 saw the beginning of the recovery for the countrys sector. Last year, its contribution to GDP climbed 43.6% year on year, to reach ?13.2 trillion (U.S $178 billion). While the sector also saw a recovery of just under three million travel and tourism jobs, representing a positive rise of 10.2% to more than 32 million, this is still eight million fewer jobs than in 2019.
The sectors contribution to the economy and employment could have been higher if it were not for the impact of the Omicron variant, which led to the recovery faltering around the world, with many countries reinstating severe travel restrictions.
MARKET SIZE
the travel services market in India and it is poised to grow by $ 11.78 bn during 2022-2026, accelerating at a CAGR of 11.38% during the forecast period.
The market is driven by increase in the number of M&A, partnerships, and strategic alliances, increasing international tourist footfall, and increasing adoption of online payment platforms.
This study identifies the introduction of low-cost airlines as one of the prime reasons driving the travel services market growth in India during the next few years. Also, increased contribution of travel and tourism to GDP and employment and technological advances in mobile-based and website-based travel service platforms will lead to sizable demand in the market.
OUTLOOK
In 2020, the world economy shrunk by 4.3%, over two and half times more than during the global financial crisis of 2009. The modest recovery of 4.7% expected in 2021 would barely offset the losses of 2020 (Source: World Economic Situation and Prospects released by the UN). In South Asia, the pandemic severely impacted most economies in the region, dragging down average GDP by -8.9% in 2020. India, in particular, suffered its largest economic decline in history, with output falling by nearly 10% in 2020. One year into the Covid-19 pandemic and the accumulating human toll continues to raise concerns, even as vaccine coverage increases. The global economic outlook continues to be constrained by high uncertainty and reels under the pressure of sharp contraction in activity seen in 2020. The outlook depends not just on the outcome of the battle between the virus and vaccines—it also hinges on how effectively economic policies deployed under high uncertainty can limit lasting damage from this unprecedented crisis
RISKS AND CONCERNS
Economic Risk: Our business is closely associated with the macro environment that impacts the consumers behaviour and spending power. The Covid-19 pandemic has not only led to global health and safety concerns, but has also thrown many economies into slowdown.
Forex risks: Being exposed to a significant number of geographies, the Company deals in a number of currencies and runs the risk of unfavourable movement in any currency leading to financial losses.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Internal control systems are embedded in all processes across all functions within the Company. These systems are regularly reviewed and wherever necessary, they are modified or re-designed to ensure better efficiency, effectiveness and improved controls All processes and systems are subject to Internal Audit which are further supported by Statutory Auditors who validate that financial reporting is true and fair, and that these controls are designed and operating effectively.
DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:
| RATIO | Numerator |
Denominator |
FY 2022 |
FY 2021 |
| CURRENT RATIO | Current Assets |
Current Liabilities |
1.18 |
1.11 |
| DEBT EQUITY RATIO | Total Debt |
Shareholders Equity |
1.80 |
1.60 |
| DEBT SERVICE COVERAGE RATIO | Earning Available For Debt |
Debt Service |
0.30 |
0.13 |
| RETURN ON EQUITY RATIO | Net profit after tax |
Net Worth Equity |
0.09 |
0.00 |
| INVENTORY TURNOVER RATIO | Cost of goods sold |
Average Inventory |
96.47 |
6.78 |
| TRADE RECEIVABLES TURNOVER | Net Sales |
Average Accounts |
0.20 |
(0. 37) |
| TRADE PAYABLES TURNOVER RATIO | Net Credit Purchases |
Average Accounts |
0.03 |
(1 .39) |
| NET CAPITAL TURNOVER RATIO | Net Sales |
Working Capital |
11.54 |
2.38 |
| NET PROFIT RATIO | Profit after Tax |
Net Sales |
1.59% |
0.07% |
| RETURN ON CAPITAL EMPLOYED | Earning Before Interest and |
Capital Employed |
0.10 |
0.02 |
| RETURN ON INVESTMENT | Interest Income |
Cost of Investment |
NA |
NA |
| Date: 01.08.2022 | ||
| Place: Kolkata | Sd/- |
Sd/- |
(Durgadas Ghosh) |
(Krishna Kumar Chanani) |
|
Managing Director |
Director |
|
DIN 09308295 |
DIN 00369417 |
Invest wise with Expert advice
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
Download The App Now
Follow us on
2025, IIFL Capital Services Ltd. All Rights Reserved
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
