Hotels and restaurants in Maharashtra are struggling to deal with restrictions such as night curfew and shutdown of properties on weekends amid the alarming rise in COVID-19 cases that has sparked fears of total lockdown and another mass exodus of migrant workers.
Restrictions have severely hit the revenue of the hospitality sector and the morale of workers said Pradeep Shetty, Senior Vice President, Hotel & Restaurant Association of Western India.
“Once lockdown is announced, full migration out of the city and state is imminent”, Shetty said. He claimed that about 20 percent of the workers had left for their hometowns or to their villages near big towns in the state but this could not be independently verified.
COVID-19 cases have risen exponentially in the state in recent weeks despite restrictions, which has forced the Uddhav Thackeray government to contemplate tougher measures.
Maharashtra has more than 10,500 hotels ranging from basic one-star property to five-star business hotels and luxury resorts. It employs an estimated 3 million people.
Small establishments across the state and numerous budget properties in small towns employ migrant labour in significant numbers, who had fled to their homes last year after the lockdown.
Revenue from food and beverage has already taken a hit because of work from home, weekend lockdowns and restriction on social events. Hotel operators across the state are staring at heavy losses following strict orders to keep the properties shut on weekends. Hoteliers have staunchly protested against the move as weekends usually generate 60-70 percent of the income.
While governments of Delhi, Tamil Nadu and Maharashtra have warned of a possible lockdown, Gujarat has imposed a night curfew for the time being. Hoteliers fear that a full lockdown will be the last nail in the coffin that would force many small entrepreneurs to shut down permanently.
Vishal Kamat, executive director, Kamat Hotels said, “This one month is going to be a nail in the coffin for all the players who have been struggling to keep themselves afloat. The impact of the lockdown will be severe.”
The hotel sector was beginning to revive after the lifting of restrictions on travel and stay and the onset of the festive season. In the peak season of December and January, many properties, especially holiday destinations across the country, announced a sell-out of rooms even though business from the corporate segment remained muted.
“The occupancies across the country are still below 50 percent and room rates charged are half of what their usual levels are. For room rates to pick up there has to be a rise in occupancy and it will be 3-4 years before they get back to good profitable levels”, said a Mumbai-based hotelier who has over 15 operational hotels in India.
The industry had lost all its business after the lockdown came into effect and the zero business scenarios remained for close to 10 months. As of today, 30 percent 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, according to the Federation of Hotels and Restaurant Associations of India.