The Indian hotel industry has taken a hit of over Rs 1.30 lakh crore in revenue for the fiscal year 2020-21 due to the impact of the COVID-19 pandemic, the Federation of Hotel & Restaurant Associations of India (FHRAI) said on Sunday as reported by PTI. The apex industry body said it has submitted a representation to the Prime Minister and a few other union ministers urging immediate support from the government to save the hospitality sector from imminent collapse and has requested several fiscal measures for this.
“The Indian hotel industry’s total revenue in FY2019-20 stood at Rs 1.82 lakh crore. As per our estimates, in FY2020-21, approximately 75 per cent of the industry’s revenues got wiped off. That is more than Rs 1.30 lakh crore revenue hit,” the FHRAI said in a statement. The businesses are steadily closing and non-performing assets (NPAs) are rising, it added.
Since March 2020, the industry has been struggling to manage its statutory and capital expenditure obligations. Repayment of loans with interest is not just difficult but impossible under a more severe economic environment due to the present surge, FHRAI Vice President Gurbaxish Singh Kohli said. Without a moratorium on EMIs and interest payments, the sector will completely crumble, he added.
“We request the Government to offer a sector-specific policy which can mitigate all adverse financial impact including debt obligations accrued or to be accrued towards banks, financial institutions or any other entities, in view of the current circumstances and its long-term repercussions,” Kohli said. While FHRAI understands that the government has to prioritise, ignoring the industry even now will push it to the point of no return, he added.
“Without wasting any more time, the government should make necessary special provisions to waive statutory charges for the hospitality sector,” Kohli said. The hospitality industry should be offered a waiver of property tax, water charges, electricity charges and excise license fees for the lockdown period, he added.
FHRAI Jt Honorary Secretary Pradeep Shetty said that working capital support with a low rate of interest from the government will help the hospitality establishments that are struggling to restart and sustain their operations due to negative cash flows. “We also request the government to compensate employees engaged in the industry and their families for the loss of income,” he added.
“Along with moratorium extension of three years the industry will need a complete waiver of interest on the loans from March 2020 till the time that business is normalised, FHRAI Vice President Surendra Kumar Jaiswal said. Being an employment-intensive sector, a concrete policy is required to support the hospitality industry, he added.