The FHRAI has asked the Heads of State for a friendly atmosphere in which the hospitality sector can survive and recover.
With the rising COVID-19 case in the country in mind, many states have restricted the extent of business activities. Again, the hospitality industry is under tension, one of the worst affected by the last lockdown. The Federation of the Hotel and Restaurant Associations of India (FHRAI) wrote to the Chief Ministers and Chief Secretaries of all States in the country in order to safeguard the hospitality industry, and its workers, from an impending collapse.
It has requested the abolition of a policy of imposing a general ban or limited limitation on hospitality facilities and to relieve the facilities, including energy charges, property tax, excise fees, or waive statutory payments under restrictions.
The impact of COVID-19 on the Hospitality industry has been extremely disruptive. Among all the core sectors of the economy, Hospitality was the first one to fall and it is going to be the last to recover. The industry had lost all its business after the lockdown came into effect and the zero business scenarios remained for close to 10 months in last year. However, obligations such as rental and salary expenses, servicing of debts and statutory payments remained.
This has led to mounting debts, threats of insolvency for a majority in the sector along millions of job losses. As of today, 30 per cent of hotels and restaurants in the country have shut down permanently due to financial losses. Over 20 per cent of hotels and restaurants haven’t opened fully after the lockdown. The remaining 50 per cent continue to run in losses and revenues are below 50 per cent of the pre-COVID levels,”
says Mr. Gurbaxish Singh Kohli, Vice President, FHRAI.
One of the final sectors to be allowed to function under the gradual lifting of the lockdown last year was the hospitality sector. While the company was allowed to operate due to the rise in a number of instances, hospitality establishments were suddenly and severely restricted in many urban areas. Several Maharashtra, Gujarat, Punjab and Tamil Nadu companies have reopened until October 2020.
The hospitality sector has been found as a soft target by respective Governments and local administration while enforcing restrictions under the COVID19 guidelines. Hospitality establishments have always maintained high quality and hygiene benchmarks. Yet, the sector almost always is the first to be asked to shut shop when there is a rise in cases.
Night curfew orders issued by various State Governments made it evident that all other businesses and sectors are entitled to get long business hours except restaurants. Hospitality gets singled out every time due to its specific nature of business and demand. Even manufacturing industries employing thousands of workers are being allowed to function but not hotels and restaurants.
The most ironic of this is the airline’s industry which is being allowed to operate in full capacity. It defies all logic, an aircraft can fly safely with 200 passengers without any social distancing but hotels and restaurants can’t despite following all the safety and hygiene protocols,”
says Mr. Surendra Kumar Jaiswal, Vice President, FHRAI.
One of the largest contributors to the GDP of the nation is the hospitality industry and due to COVID-19, its profits were greatly affected. Around 10% of the total GDP was generated by tourism and hospitality, some 90 million jobs were supported and Foreign Exchange income (FEE) generated in 2019 to Rs. 1.94.881 crores (€ 29.7 billion).
The Government of India claimed to have provided relief packages to the sector through various Ministries and RBI but the reliefs were extremely inadequate to provide any real relief to the industry. The Hospitality sector was pinning its hopes on the Union Budget 2021 for some respite. But it came as a rude shock to us when the budget allocation for the Ministry of Tourism was slashed by 19 per cent at a time when the sector was facing the worst generational crisis for tourism in India.
We have been requesting the State Governments to take cognizance of the distressing situation of the sector and support it by providing relaxations by way of waiver of electricity charges, property taxes, and excise license fees but the same has been ignored. Unfortunately, the policymakers have failed to consider the specific problems of the Hospitality sector that is impacted by a host of external factors. Work From Home has gained popularity even post the lockdown, there is a significant reduction in business travel and the industry is witnessing a general reduction in discretionary spending on leisure and social spending.
Uncertainties and protocols imposed by the Government for tourist visas, quarantine norms and other COVID-19 protocols and more importantly disruption of international commercial airline operations have disrupted the Hospitality business,”
says Mr. D V S Soma Raju, Honorary Treasurer, FHRAI.
The 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.
“To avoid undue trouble and harassment, we are requesting that the States do away with the practice of obtaining the permission of local administration and authorities. Also in view of the sudden night curfews being implemented in different cities, we request that guests attending marriages be allowed to use invitation cards in place of curfew passes.
Most importantly though, we request the State Governments to recognize the service of Hospitality workers as that of frontline corona warriors and recommend them for priority vaccination. The industry is committed to following all the health and safety protocols issued by the Government. We assure our unwavering support to the various efforts of the Government to combat the pandemic and make a genuine request to the various State Governments to extend their support in our fight for survival,” concludes Mr. Kohli.
Mr. Gurbaxish Singh Kohli, Vice President, FHRAI.
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