Extended lockdown, no financial package see hotel stocks fall 4-14%
The Centre has allowed home delivery services for restaurants but state governments will have a final say on easing of restrictions.
May 18, 2020 / 01:03 PM IST
Hotels stocks corrected 4-14 percent on May 18 after the government did not include the hospitality sector in the Rs 20-lakh-crore economic package to combat the impact of the coronavirus.
Chalet Hotels, Asian Hotels, Taj GVK Hotels, Lemon Tree, Mahindra Holidays, Kamat Hotels, Indian Hotels, Oriental Hotels, Royal Orchid, Speciality Restaurants, Westlife Development, ITDC, EIH, etc were down 4-14 percent at the time of publishing this copy.
"We are disappointed that the hospitality sector, which is on ventilator support did not get specific relief," Sanjay Sethi, MD & CEO at Chalet Hotels told Moneycontrol.
"We urgently needed the government to facilitate a one-time restructuring of loans by banks without they having to take a provisioning hit. We needed soft loans for working capital."
A significant contributor to the GDP, employment and forex earnings has been put out in the cold, he added.
Sethi said they would now look to states for relief on benefits as an industry for electricity tariff, excise fee waiver, property tax reduction and ease on labour laws.
The Centre has extended to May 31 the two-month-long nationwide lockdown, with some easing of restrictions. It has allowed home delivery services for restaurants but states will have the final say on this and other relaxations.