In the ensuing outbreak of the Novel Coronavirus (COVID-19), the Federation of Hotel and Restaurant Associations of India (FHRAI) has written to the Prime Minister requesting the government to intervene and cushion the blow which the hospitality sector is facing on account of the pandemic. 

In a representation submitted to the Prime Minister’s office, the body outlined the challenges posed by the crisis, its impact on the industry and the support expected from the Government.

The submission included pleas for the following:

Complete GST (Goods and Services Tax) holiday for six months from both the state and Central government

Deferment for fiscal statutory compliance deadlines, such as payment of direct and indirect taxes

Deferment for repayment of loans, bank EMIs, etc. for a period of six months

Reduction of bank interest rate by almost 200 basis points with immediate full transmission for working capital

Relief in electricity bills in the form of waiver or subsidy of FAC charges, and electricity duty

“Almost all tourism verticals have been severely impacted by the crisis. However, it is the hospitality industry that has been hit the most. Our members have reported cancellations reaching a critical stage of 90 per cent. Forward bookings, which may have helped buffer the impact, too is negligible because of the uncertainty in containing the disease spread globally,” said Gurbaxish Singh Kohli, vice-president, FHRAI.

“The meetings, incentives, conferences and events (MICE), wedding tourism, and other kinds of celebrations have been negatively impacted. Hotels and restaurants are facing a catastrophic situation with revenues plunging drastically,” he added.

The hospitality industry is highly labour-intensive, and is the biggest employment generator of both direct and indirect jobs. It is also one of the few industries that is capital-intensive, requiring a big chunk of it reserved as working capital.

“The industry employs the largest workforce, and hoteliers have a responsibility towards taking care of their employees. This includes ensuring that they are paid on time as well as their well-being, especially now in the face of the pandemic,” said Pradeep Shetty, joint honorary secretary, FHRAI.

“In addition to this, the working capital is draining rapidly which is hit by almost 90 per cent for both larger establishments and budget hotels and restaurants. Paying taxes including advance tax and GST is now straining the liquidity and is making it extremely difficult to manage day to day operations,” he added.

FHRAI has expressed that under such circumstances adhering to timely payment of EMIs or the repayment of loans is an onerous task. In order to survive these trying times and to give the industry the chance to get back on its feet, the federation has requested that the government intervenes and offers the sector a stimulus.

“Our goal is to extend support to the government and the hospitality industry in leveraging tourism’s intrinsic potential and, act as a catalyst for inclusive, equitable and sustainable economic growth for both the public and private sectors. We are looking forward to meeting the Prime Minister to brief him about the issues and challenges faced by the industry over the last two months, and hope that he will provide the industry with the much-needed support,” stated Kohli.

Hygiene advisory

The Federation of Hotel and Restaurant Associations of India (FHRAI) has issued an advisory to its members to strictly adhere and follow the instructions issued by the government authorities on containing the Novel Coronavirus (COVID-19) spread. The association has advised members to maintain stringent checks and hygiene standards.

The advisory does not advocate the shutting down of restaurants, unless there is a specific directive that may be received from the local authorities in this regard, or if any establishment voluntarily wishes to do so.

The advisory emphasises on scrutiny of employees, sanitisation, and in the current scenario, the association leaves it up to members to either keep their establishments open or shut them down based on their ground reality.

“The Federation has members across the country, and we are not asking anyone to shut down their establishments. But yes, we are insisting that everyone who is open to business be extremely aware and vigilant and that they take all the precautionary measures, and follow the directives by local authorities,” stated Kohli.

“We have been issuing the updated advisories as have been received from the Ministry of Health to our members and have advised that they follow the precautionary measures and guidelines rigorously,” he added.

FHRAI has shared guidelines based on the government’s recommendations to its member establishments. The guidelines prescribe preventive measures with regards to safety of staff, diners and tourists in their premises.

“We have advised member establishments that the staff and customers be thoroughly screened. Anyone indicating symptoms of cough, cold, flu be immediately sent for a medical check-up to the nearest government hospital,” said Shetty.

“It is extremely critical that the hotel and restaurant premises be cleaned and sanitised regularly and procedures be followed as per the guidelines from the government,” he added.

Over the last couple of months, hotels and restaurants have been facing a catastrophic situation, with revenues plunging drastically. Hotel occupancies have taken a big hit, with 100 per cent cancellations, and there are no future bookings. The reduced footfall at restaurants too has had a drastic impact on sales.