Mumbai: In a last-ditch measure, the apex Federation of Hotel & Restaurant Associations of India (FHRAI) sent an SOS to all Chief Ministers and Chief Secretaries on Monday, seeking urgent relief measures to help save the industry from doom as nearly one-third of hotels and restaurants across the country have shut down permanently.
It pointed out that with the fresh Covid-19 wave and new restrictions on the hotel industry business across states, the crucial sector has again become the worst-affected like in 2020.
“Covid-19 has been extremely disruptive on the hospitality industry, which is among the core sectors of the economy. It was the first to fall and will be the last to recover. We had lost all business after the (2020) lockdown came into effect and zero business scenarios for nearly 10 months last year,” rued FHRAI Vice President Gurbaxish Singh Kohli.
However, all other obligations like rentals, salaries, debt servicing statutory payments and other expenses remained, resulting in mounting debts, threats of insolvency of a majority in the sector, coupled with millions of job losses, he noted.
“As many as 30 per cent of establishments in the country have closed down permanently due to the financial crises, over 20 percent have not opened fully post-lockdown, and the remaining 50 percent continue to operate with losses and revenues below 50 per cent of the pre-Covid levels,” Kohli said.
Another FHRAI Vice President Surendra K. Jaiswal contended that the hospitality sector is considered a “soft target” while imposing Covid restrictions although they adhere to highest norms of safety, hygiene and security.
“Yet, we are the first asked to shut when cases rise, night curfews by various states ensure we get singled out everytime due to the industry specific nature of business and demand all other businesses and sectors are entitled to get long business hours except the hospitality sector,” he complained.
Questioning the logic of the restrictions, the FHRAI leaders said that the aviation industry is permitted to operate full capacity, and not them, though the sector accounts for around 10 per cent of the GDP, supports over 9 crore jobs and generated Foreign Exchange Earnings of Rs 194,881 crore ($29.97 billion) in 2019.
The FHRAI has urged all Chief Ministers to scrap the policy of imposing selective or blanket bans and severe restrictions on the hospitality establishments, and they should be entitled to relaxations or waiver of statutory payments like electricity bills, property taxes, excise licence fees, etc.
FHRAI Treasurer D.V.S. Soman Raju said that though the Centre claimed to have given relief packages, these were “extremely inadequate” to prove of any benefit to the industry.
He said even the Union Budget 2021-2022 was a rude shock as the budgetary allocation for the Tourism Ministry was slashed by 19 per cent at a time when the sector was in its worst crisis ever.
Raju added that while Work From Home (WFH) norm has gained popularity, there is an overall reduction in business and leisure travel and social spending and even the disruption of commercial airlines due to various stringent norms have hit the hospitality sector badly.
“Imposition of night curfews and full or partial lockdowns by States across Maharashtra, Gujarat, Punjab, Chhattisgarh, Madhya Pradesh, Delhi, Karnataka and Tamil Nadu, among others has brought the hospitality sector to its knees It is really impossible for us to survive,” he said.