With the declining graph of tourist arrivals owing to travel restrictions and mass cancellation of hotel bookings by domestic and international tourists, the hospitality business in India is already facing the brunt caused by the outbreak of novel Coronavirus. Not just the hotels, even the restaurant industry is struggling under the devastating effects of Coronavirus as cities and states in the country have announced closure of bars and restaurants, as a preventive measure to curb the spreading of COVID-19.
While the Coronavirus impact is still at the stage-II level in India, it has already hit 90 per cent of hospitality and tourism business. With the hospitality industry in India facing the worst-ever crisis, Gurbaxish Singh Kohli, Vice President of the Federation of Hotel & Restaurant Associations of India (FHRAI) through a formal letter has sought for Prime Minister, Narendra Modi’s help for relaxation of certain norms pertaining to the business.
The association has appealed for complete GST exemption for a span of six months, both at centre and state level. The FHRAI has also asked for deferment for repayment of loans, bank EMI’s etc for a period of six months. With the dipping of revenues, the association has requested for reduction of bank interest rate by almost 200 basis points with immediate full transmission for working capital. Another request raised was that of deferment for fiscal statutory compliance deadlines such as payment of direct or indirect taxes.
In the letter, Kohli said, “The Hospitality industry is a labour intensive and is the biggest employment generator of both direct and in direct jobs, and, therefore, the industry has to take care of a large number of employees. On top of that, the Industry requires a lot of working capital, which is seriously hit by almost 90% of both larger establishments and budget hotels and restaurants, and to pay taxes such as advance tax and GST. Now, in an event of such a pandemic, we have been managing the system with our own cash reserves.”
Further he stated that, “A lot of hoteliers have taken loans to construct and run their establishments, and, in such a state, adhering to the on-time payment of EMI’s or the re-payment of loans seems an onerous task.”
Giving cognizance of the crisis, Kohli’s letter further said, “Almost all tourism verticals have been severely impacted by the crisis, however, the gigantic jolt has been to the hospitality industry. Many of our members have reported cancellations reaching a critical stage of 90 %. And, forward bookings, which could have helped, has gone to almost negligible, with the news of the disease spreading globally.”
“The Meetings, Incentives, Conferences and Events (MICE), wedding tourism, all kinds of celebrations, medical, room reservations and wellness sectors have been severely affected. The Hospitality sector comprising of hotels and restaurants are facing a catastrophic situation with revenues plunging overwhelmingly.”
Besides, the letter has also brought to notice the illegal, unregistered and unlicensed accommodation in the form of bed and breakfast, flats, apartments which are available for short stay and which are promoted by Online Travel Aggregators, where there is no screening or record of guests staying.
