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  • FHRAI REACHES OUT TO STATES OVER DIRE SITUATION OF HOSPITALITY INDUSTRY, PLEADS INDIVIDUALLY TO THE STATE CMS FOR SAVING THE INDUSTRY FROM IMMINENT COLLAPSE

News Details

12 th Apr 2021

On the back of rising COVID-19 cases in the country, several States have issued restrictions on business operations to control the spread. The Hospitality sector, one of the worst affected as a result of the last lockdown has once again come under stress. To save the Hospitality sector and its workforce from an imminent collapse the Federation of Hotel & Restaurant Associations of India (FHRAI) has written to the Chief Ministers and the Chief Secretaries of all the States in the country. The Association has requested the heads of the States for a facilitative environment for the survival and revival of the Hospitality sector. It has asked that the policy of imposing blanket ban or selective restrictions on Hospitability establishments be abolished and under restrictions, establishments be given relaxations or waiver of statutory payments such as electricity charges, property taxes and excise license fees, among others.

 

“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 with 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.

 

 

 

The Hospitality sector was one of the last sectors to be granted permission to operate under the phased lifting of lockdown last year. Despite being permitted to operate, on account of surge in number of cases, sudden and severe restrictions were imposed on hospitality establishments in many cities. Several establishments across Maharashtra, Gujarat, Punjab and Tamil Nadu reopened as late as in October of 2020.

 

“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 airlines 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.

 

Hospitality industry is one of the major contributors to the nation’s GDP and its earnings were hugely impacted due to COVID-19. Tourism and Hospitality accounted for around 10 per cent of the GDP, supported around 90 million jobs and generated Foreign Exchange Earnings (FEE) to the tune of Rs.1,94,881 crores (US$ 29.96 billion) in 2019.

 

“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 distressed 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 have been ignored. Unfortunately, the policy makers 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.

 

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.

 

“With the prevailing restrictions and WFH arrangements, restaurants have no significant business during the day and imposition of night curfews is tantamount to closure of business for the sector. Under such circumstances, it is really impossible for the Hospitality sector to survive. Today, Hospitality has become the most unviable and unsustainable business in the country. It is heading towards closure of thousands of establishments in many parts of the country and is resulting in massive job losses. We therefore request the Governments of respective States to abolish the policy of imposing blanket ban or selective restrictions on Hospitability establishments and even in extreme circumstances, we plead that the restrictions be effected based on the situation,” adds Mr. D V S Soma Raju.

The FHRAI has asked that meeting and gathering norms for hotels, banquets, and open venues should be made in commensurate to the size of the venue. It has also requested that except in case of complete lockdown or in containment zones, functioning of Hospitality establishments should be allowed as per the SOPs and protocols.

 

“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.

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THE FEDERATION OF HOTEL & RESTAURANT
ASSOCIATIONS OF INDIA

Address:

B-82, 8th Floor, Himalaya House, 23,
K. G. Marg, New Delhi-110 001

Telephone: 011-40780780

E-mail: fhrai@fhrai.com

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