Hospitality industry body FHRAI on Wednesday sought support from Prime Minister Narendra Modi for a special relief package for the tourism and hospitality sector to enable its survival, terming it as the most distressed sector due to COVID-19.
Highlighting that the hospitality industry has reported losses of a whopping sum of Rs 1.40 lakh crore and around five crore jobs were lost due to the pandemic, Federation of Hotel & Restaurant Associations of India (FHRAI) said the fresh wave of the pandemic has compounded the problems and without adequate government support many more establishments in the sector would be compelled to shut shop.
Currently, there is a considerable amount of fear and anxiety in the sector. Significant capital has been ploughed in by the industry to reopen and restart operations. Also, there has been a lot of effort put in to bring back workers, wrote FHRAI Vice President Gurbaxish Singh Kohli to the prime minister seeking his intervention. “Taking due cognizance of the unparalleled situation in the tourism and hospitality sector as the ‘Most Distressed Sector due to COVID -19’, kindly provide a sector-specific special relief package and enable the sector to survive,” the letter said.
As per industry estimate, financial losses to the industry from the first two waves of the pandemic were so severe that around 30 per cent hotels and restaurants in the country were shut down permanently and the remaining establishments continue to run in losses even today, it added. Stating that the successive waves and continued disruptions have created a volatile economic environment in the sector making survival as the key focus, FHRAI said the third wave has washed off another tourist and business season and the sector is staring at a dark future in the midst of increasing debt burden, obligations and statutory labilities to fulfil but with no means and ways to meet them.
“Under the present circumstances, without adequate support from the government, many more hospitality establishments in the country would be compelled to shut shop,” the letter said. Earlier, FHRAI in its pre-Bedget recommendations had asked the finance ministry to include hotels and tourism related sectors in the National Infrastructure Pipeline (NIP) so as to enable the COVID-19 hit sector to avail funds with extended repayment periods at a low rate of interest.
It had also put forth a series of demands, including modification in infrastructure funding for hotels, allowing business losses to be carried forward for up to 12 years and granting infrastructure and industry status to the hospitality industry, besides a special tax incentive for domestic travel. Highlighting that the sudden surge in COVID infection due to the Omicron variant and subsequent restrictions and closures have shattered all hopes of the industry, FHRAI said, “The restrictions imposed presently are akin to a lockdown and the business in hotels and restaurants are less than 10 per cent in all major locations.”
This situation will increase extensive damages to the sector and it would take nothing less than five years for the industry to return to the pre-pandemic levels, it added. FHRAI also drew the attention of prime minister to the cascading impact of the current situation on employment, saying apart from another round of lay-offs and pay cuts, the situation will pose another serious threat before the industry in the form of unavailability of trained manpower to work in the sector.
“The volatility in the sector and continued disruptions have been dissuading the people to continue in the sector and a large number of them have shifted to other sectors for want of job security. Many workers who went back to their villages are not interested to come back, after many rounds of forced visits to villages due to the restrictions/lockdowns,” the letter said.