COVID: Indian luxury hotels take a hit | Asia | An in-depth look at current events from across the continent | DW


India’s hotels and restaurants have been among the sectors hardest hit by the coronavirus pandemic, with the resulting lockdowns and economic downturn decimating revenues and profits.

When the second wave of the virus reached its peak in April and May, the Federation of Hotel and Restaurant Associations of India (FHRAI), the industry’s top body, called for immediate government help. Prime Minister Narendra Modi.

It was a desperate plea for government help to save the hospitality industry from impending collapse.

The FHRAI called for a moratorium on loan and interest payments and insisted that without the support the sector would collapse.

The hotel sector is bleeding

“Without wasting any more time, the government should make the special arrangements necessary to remove legal burdens for the hospitality industry. Ignoring the industry, even now, will push it to the point of no return,” Gurbaxish Singh said. Kohli, vice-president of FHRAI.

Hotel executives and analysts point out that repaying loans with interest has been difficult in the current difficult economic environment.

“To begin with, we asked the government to offer us exemption from property tax, water charges, electricity charges and excise license fees for the lockdown period,” DW told DW a senior executive who asked not to be named.

With travel reduced to the bare minimum and an economic downturn, the pandemic has caused immeasurable damage to luxury hotel chains across the country.

Almost all segments associated with the hospitality industry – meetings, conferences, restaurants, destination weddings and family entertainment, among others – have been crippled by the impact of the health crisis.

According to the FHRAI, the Indian hospitality industry received more than 1.3 trillion rupees ($ 17.4 billion, 14.7 billion euros) in revenue for fiscal year 2020-21 due to the pandemic.

There are some 150,000 brand name hotels in India, and around 20-25% of them are at risk of shutting down permanently, according to the Hotel Association of India.

Risky jobs

Many hotel chains have taken measures such as freezing new hires, partially closing hotel floors and closing restaurants. In some cases, they have also started to cut jobs.

For example, the Indian Hotels Company Limited (IHCL), the largest hotel group in South Asia, reported a loss of around 7.2 billion rupees in fiscal year 2020-21 hit by the pandemic , compared to a profit of 3.54 billion rupees in the previous financial year. year.

Last month, the iconic Hyatt Regency Hotel near Mumbai Airport closed temporarily due to financial strains.

“This is to inform all permanent hotel staff that no funds are received from Asian Hotels, the owner of the Hyatt Regency Mumbai, to enable the payment of salaries or to support the operations of the hotel, ”said Hardeep Marwah, hotel manager. general manager, said in a statement.

In March, Marriott International issued a statement saying it would soon begin laying off tens of thousands of employees around the world. The group operates 84 hotels in India and hoteliers have said that these establishments and the staff working for them have also been affected by company policy.

It is not only luxury hotels that have been affected, even many small and medium players have been affected as well.

“Forget the luxury hotels. The mid-sized hotel players are bankrupt, and many cannot even pay their electricity bills and have decided to go out of business or are for sale,” said Geeta Mehta, head of public relations, to DW.

“Decline for national employment”

Jaypee Palace Hotel senior executive Hari Sukumar told DW millions of hospitality jobs are at risk due to the pandemic.

“India’s tourism and hospitality industry expects a potential job loss of around 38 million, representing 70% of the total workforce in the sector, due to COVID,” he said. -he declares.

“If this trend continues, it will be a setback for national employment,” Sukumar added, noting that the hotel sector directly and indirectly accounts for around 12.75% of all jobs in India.

In addition to announcing staff leaves, unpaid leave, hotel closures and the postponement of new hotel projects, many large chains believe that a sense of normalcy will only return if domestic tourism returns.

But the likelihood of such a near-term recovery remains uncertain, casting a shadow over the outlook for the hotel industry and the workers who work there.

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