May 19, 2020 TnH Global

India’s 70% hotels & restaurants prepare for closure: FHRAI

The hospitality industry is shocked over not getting any relief from the government as part of its economic revival package unveiled by the Finance Minister recently.

In her fifth and last tranche of relief and reform package, the Finance Minister Nirmala Sitharaman concluded her speech with no mention of hospitality and tourism. The sector that contributes close to 10 per cent to the country’s GDP was once again completely excluded from any kind of relief. Stakeholders have been continuously informing and updating the Government about the distress the industry has been in since the lockdown came into effect. With not even the slightest reassurance, let alone any stimulus or relief package, from the Government, the industry is decidedly looking at a major catastrophe including massive job loss, bankrupt enterprises and definite closure of at least 70 per cent of hospitality establishments across the country.

Hospitality industry’s apex Association – Federation of Hotel & Restaurant Associations of India (FHRAI) has expressed deep disappointment and utter shock with the Government’s callous attitude towards the sector. It has called for the Government to immediately action a stimulus package for hospitality for avoiding unfathomable consequences of failing the industry.

“The entire industry is confused, hysterical and in disbelief after listening to the FM’s speech. There was no mention of hospitality and tourism at all. An industry that the Hon. PM has mentioned as being one of the five pillars of economic growth and the country’s pride was once again completely omitted from any kind of relief. The hospitality and tourism industry generates close to Rs.17 lakh crores contributing roughly 10 per cent of India’s GDP and supports over 43 million jobs translating to almost 9 per cent of its total employment. Despite this knowledge the Government has chosen to completely ignore us, yet again,” says Mr Gurbaxish Singh Kohli, Vice President, FHRAI and President, Hotel and Restaurant Association of Western India (HRAWI).

In the fight against the pandemic, restaurants volunteered for feeding the needy by preparing and distributing lakhs of meals for workers, colonies, doctors, health workers, and essential services staff, among others every day and hotels across the country pledged thousands of rooms to aid the Government in its efforts to quarantine people house doctors, healthcare workers and Government staff which is on-going even as of today.

“Since the lockdown came into effect, we have been keeping the Government informed about the developments in the industry. We have been identifying and suggesting the possible ways that the Government could intervene to help us get through this difficult phase. We have never shied away from going out of our way to support the Government voluntarily and also whenever it called upon us. We have been patiently waiting for it to throw us a line for the much-needed support. But we are utterly flabbergasted today to learn that we are not even in the consideration set. We are in a complete state of shock because of the insensitivity shown by the Government,” says Mr Pradeep Shetty, Jt. Hon. Sec. FHRAI & Vice President, HRAWI.

The Government has to go beyond words and take decisive steps to safeguard the industry and millions of jobs of people whose lives are dependent on a thriving tourism sector. UNWTO (World Tourism Organisation) urged members to increase pressure on world leaders to rethink tax and employment policies relating to tourism and to help make sure, businesses survive to help drive wider recovery effects. The Government with its step-motherly treatment is losing the opportunity to recognise Tourism’s unique ability to not only provide employment but also to drive equality and inclusivity to lead recovery efforts.

The tourism and hospitality industry has no cash inflow and expects it to be next to nil for at least until the mid of next year. Everything hinges on the complete eradication of the virus and which at present does not seem to be anywhere on the horizon.

“Apprehension in people’s minds coupled with a weakened economy will make getting back on our feet without Government intervention, impossible. Migrants constitute approximately 65 per cent of the hotel industry’s employment and roughly 60 per cent of hotels in the country are in the economy or mid-market segments. With migrants making their way back home, if and when we do resume business, we won’t have the same kind of manpower we had. Our projections indicate that within the next 30 to 45 days as many as 70 per cent of hotels and restaurants put together will close down. The FHRAI calls upon the Government for its urgent attention and pleads to bail us from this eventuality,” concludes Mr Kohli.