The Federation of Hotel and Restaurant Associations of India (FHRAI) on behalf of its financially distressed fraternity has asked the government to provide soft loans to hotel and restaurant players, a press release from the apex hospitality association said on November 2.
Financial support from the government will help businesses cover for the required working capital which in turn will help them sustain.
The FHRAI is the apex body of the Indian hospitality industry, representing 55,000 hotels and 5,00,000 restaurants across the country.
In its recent representation to the government the association had said the industry is finding it difficult to mobilize loans as financial institutions have marked the industry in negative list.
Roughly after three months of reopening for business, the hospitality industry has witnessed dismal response from travellers. Having registered only 20 to 30 percent of the average pre-pandemic revenues across the country, the businesses are finding it more and more difficult to sustain with each passing day.
Typically, the month of November marks the beginning of festivals and the holiday season for both domestic and international travellers. However, this year the hospitality sector has nothing much to hope for with no international tourists, and domestic tourism being at an all-time low due to safety reasons and increased spread of the pandemic.
“It is no secret that hospitality is one of the worst affected industries as a consequence of the COVID-19 pandemic. It is natural that hotels and restaurants will take more time to recover as well. Our industry was the first to be locked and the last one to be reopened. So when we ask the government for support, it is because the government asked us to not conduct business for the longest duration,” said Surendra Kumar Jaiswal, Vice President, FHRAI.
“Hotels and restaurants are bound to face operational losses for quite some time since there are restrictions on operations coupled with low demand due to WFH (Work From Home) culture, no foreign travel, low guest indulgence, among other limitations, ” he added.
The COVID-19 pandemic has caused significant and far reaching economic damage to the hospitality industry. Zero business during the first seven months of lockdown, negative cash flows, threats of insolvency and millions of jobs losses have impacted the sector, according to the press release.
The hospitality establishments are struggling to restart or sustain their operations due to negative cash flows. Hotel pre-booking numbers are also very discouraging, as per the apex body.
The FHRAI said the government through a soft loan, with low rate of interest can support the industry until it reaches the pre-pandemic business levels.