Beleaguered Hospitality Industry Pleads For Soft Loan From The Govt.

Mumbai, Nov 02: Roughly after three months of reopening for business, the Hospitality industry has witnessed dismal response from travelers. Having registered only 20 to 30 per cent 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 travelers. 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.

The Federation of Hotel & Restaurant Associations of India (FHRAI), the apex Hospitality Association on behalf of its financially distressed fraternity has asked the Government to provide soft loans to hotel and restaurant players. A financial support of this nature will help businesses cover for the required working capital which in turn will help them sustain. In its recent representation to the Govt. the Association has stated that the industry is finding it difficult to mobilize loans and financial institutions have marked the industry in negative list.

“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. 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 culture, no foreign travel, low guest indulgence, among other limitations. We have been knocking on all doors and will continue to do so until we receive some relief,” says Mr. Surendra Kumar Jaiswal, Vice President, FHRAI.

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 devastated the sector completely. The hospitality establishments are struggling to restart or sustain their operations due to negative cash flows. Hotel pre-booking numbers are also very discouraging.

“The Government through a soft loan, with low rate of interest can support the industry until it reaches the pre-pandemic business levels. It is necessitated all the more today because the industry is finding it difficult to mobilize loans. Financial institutions have marked the industry in negative list or put it under negative rating. Therefore, a working capital support from the Government will help the hotels and restaurants that are struggling due to negative cash flows, to restart and sustain their operations,” concludes Mr. D V S Soma Raju, Honorary Treasurer, FHRAI.

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