Uphill task ahead for hospitality sector in Gujarat

By: |
June 9, 2020 7:41 AM

On Monday, nearly 50-60% restaurants reopened in the state, with a general concern of sustainability looming.

Coronavirus has dealt severe blow to Gujarat’s economy.

Although restaurants and hotels have been permitted to resume operations from Monday in Gujarat, it would be an uphill task for the hospitality industry to rejuvenate after suffering a huge loss of around Rs 15,000 crore due to the outbreak of Covid-19 and the subsequent lockdown for almost two and a half months.

Hospitality is one of the worst-hit sectors in the state as over 50,000 restaurants, food joints and hotels remained completely shut from March 25 to June 7 as part of the lockdown rule, said Narendra Somani, president of Hotel & Restaurant Association (HRA) of Gujarat.

According to primary estimates, the industry is bleeding with a business loss of more than Rs 15,000 crore, and there is currently utter confusion over the re-commencement of operations, said Somani. “Most of the migrant workers have moved back to their respective states. Tons of raw materials are either wasted or restaurants are forced to dispose them of due to expiry. On top of it, there is nothing significant for the hospitality industry in the state government’s Rs 14,000-crore relief package,” he said.

On Monday, nearly 50-60% restaurants reopened in the state, with a general concern of sustainability looming. According to Somani, the biggest constraint is the 7-pm deadline. Generally, restaurants get business in the late evening hours, but, according to the government guidelines, no restaurant can function after 7 pm. This will make it difficult for them to meet even the operational costs, profits being a far cry, he said. Only a handful of food joints situated in business areas would have some business during the daytime, he added.

“Before lockdown, the hospitality industry in Gujarat used to provide employment to over 25 lakh people. Of these, over 5 five lakh people have already lost their employments. Around 8 lakh migrant labourers have moved back to their home states. Large chunk of Nepali workers, too, have migrated from Gujarat to their country,” he said.

Large number of restaurants and hotels are functioning in rented properties across the state. Many of these units may shut up shops permanently in coming days, said the HRA Gujarat president, adding only those with deep pockets and big brands would survive. It would be impossible to bear mammoth operational costs, including that of rent, especially in bigger cities like Ahmedabad, Vadodara and Surat, he added.

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