Hotels, restaurants support lockdown extension but expect whopping 70% job loss without govt relief

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Updated: Apr 14, 2020 7:38 PM

Ease of Doing Business for MSMEs: In a representation to the Prime Minister’s Office, the federation pleaded for necessary steps including deferring all statutory liabilities for a minimum period of 6-12 months, including repayment of loans, interest and bank EMIs

The hospitality and tourism sector accounts for 12.75 per cent of India’s employment. (Representative image)

Ease of Doing Business for MSMEs: The national body for hotels and restaurants associations – The Federation of Hotel & Restaurant Associations of India (FHRAI) said that while the lockdown extension (till May 3, 2020) stems out of priority to contain Coronavirus impact but “with every necessary extension, reviving the industry will get that much more difficult, especially without any announcements for specific relief.” The hospitality and tourism sector, which majorly has small and mid-sized businesses, accounts for 12.75 per cent of India’s employment out of which 5.56 per cent is direct and 7.19 per cent indirect employment. FHRAI said around 38 million employees could likely lose their jobs which is 70 per cent of the total workforce due to the Coronavirus crisis.

“With this new extension, besides the revenues of both the industry and the Govt., employment too will get jeopardised. According to the WTTC, as many as 75-million travel and tourism jobs are at risk worldwide, one in eight of them in India,” FHRAI said in a statement. “I also reiterate that without government intervention now, the industry may well be heading towards a collapse which will be extremely difficult to revive,” said Gurbaxish Singh Kohli, Vice President, FHRAI.

Also read: 5 lakh small, medium restaurants plead govt; seek immediate relief to survive Covid-19

In a representation to the Prime Minister’s Office, the federation pleaded for necessary steps including deferring all statutory liabilities for a minimum period of 6-12 months, including repayment of loans, interest and bank EMIs, reducing the bank interest rate by almost 200 basis points with immediate full transmission for working capital, and giving complete GST holiday for six months. FHRAI also sought suspension of lease, rentals, property taxes and licenses such as Excise fees until the pandemic ends, charging utility costs like electricity and water on actuals, soft loans after the pandemic is over to re-start hotels and restaurants, and subsidizing employment by at least three months through government contribution through the ESIC reserves.

FHRAI call for support to hotels and restaurants comes a day after the restaurant trade association National Restaurant Association of India (NRAI) also pleaded the government to take urgent steps to help restaurant businesses in the country sustain the current situation. “They might somehow survive April but beyond that, it will be very tough. Restaurants have already defaulted. They cannot pay salary for May. We are probably looking at 15-20 per cent of the restaurants in organized sector shutting down,” Anurag Katriar, President, NRAI had told Financial Express Online as the association wrote to NITI Aayog CEO Amitabh Kant recently for the measures required.

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