Knocking On All Doors
The hospitality industry is reeling under a crisis of unprecedented proportions – job cuts, layoffs, no footfalls – and a complete loss of income. Can the industry afford to succumb to the crisis? Vivek Nair, Chairman & Managing Director, Hotel Leela Ventures (HLV), who has been president of the Federation of Hotel and Restaurant Associations of India for nine years, has been knocking on all doors to draw the government’s attention to the sector.
Just to put things in perspective, The Hotel and Restaurant Association Western India (HRAWI) alone represents 899 hotels, 305 restaurants and 105 affiliates and associates in the states of Maharashtra and Goa, Madhya Pradesh, Gujarat, Daman and Diu, etc. All these hotels and restaurants have stopped functioning because of the lockdown in force in these areas, as their employees are not able to get to work in the absence of transportation links.
Plea for Support
Nair recently wrote to Piyush Goyal, Union Minister of Railways, Commerce and Industry, Nitin Gadkari, Union Minister for Road Transport & Highways, Shipping, Micro, Small and Medium Enterprises and Maharashtra Chief Minister, Uddhav Thackeray, seeking some immediate relief for the sector on several levels. He has made a slew of demands, from a comprehensive relief package to help the industry survive the current crisis, to reduction in excise duties, licence fee and waiver of electricity duty.
In his missives, Nair has highlighted the plight of the tourism industry that has been deeply impacted by the pandemic and is fighting a battle for survival. He has also underscored the urgent need for a pragmatic policy and liquidity support from the government, especially the Union Ministry of Commerce & Industry and the D.G.F.T.
“The hospitality industry is in its worst ever crisis with almost NIL turnover during the lockdown period. It is apprehended that if no immediate relief of benefits, such as the recommendations by the D.G.F.T are given, a majority of the Industry players would face bankruptcy, resulting in major job losses and increase in banks’ NPAs,” Nair wrote in his letter to Union Minister Piyush Goel. He urged the minister to reduce the project cost eligibility from Rs 200 crores to Rs 50 crores (not counting cost of land).
Stumped By Covid-19
With rising cases of the novel coronavirus in the country and the most number of Covid-19 related deaths, Maharashtra has become the epicentre of the current health crisis. This in turn has thrown the hospitality sector into the deep end of this heath scare, with no definite timeline for recovery in sight.
In his letter to the Chief Minister of Maharashtra, Nair has sought relief for the hospitality industry in Mumbai and the rest of Maharashtra. “We request that the duty at the rate of 21 per cent on the electricity bills raised would be waived and the Property Tax payment be deferred by 12 months as we are uncertain how long the lockdown will last and no interest be charged on the delayed payment. The amount saved by not paying this tax could help in mobilising resources for the salaries and wages,” wrote Nair.
Hard Hit by Excise
He has emphasised the importance of rolling back the excise licence fee for bars. Nair said that it was surprising that disregarding the industry representation to the Department of Excise to allow it to pay the annual fee in a staggered manner and defer the increase in annual excise licence fee, the department has, on the contrary, increased the fee by 15 per cent.
“We request you to please intervene and roll back the increase of 15 per cent at this crucial time, as we do not have any income to pay the licence fee,” he says in the letter.
In his letter to Union Minister for Road Transport & Highways, Shipping, Micro, Small and Medium Enterprises, Nitin Gadkari, Nair lauds the new measures announced to aid the MSME sector. He points out that a large number of hotels, mainly in the 1,2,3 and 4-Star categories, would get the benefit of the enhanced turnover limit of Rs 250 crores.
Some Respite
“The entire Restaurant Industry would also get the benefit of the enhanced turnover limit of Rs 250 Crores. It is reported that there are 10 lakhs restaurants in the Country employing over 1000 crores workers directly and 2.50 times more, if secondary and tertiary sectors are included due to the multiplier effect. Also, restaurants pay about Rs 18,000 Crores in taxes. This is indeed a laudable initiative taken and just would be welcomed by the various sectors and employees employed by us in the Service Industry,” says Nair in his letter to the minister.
The hospitality sector, which is doing its bit in lending its resources to the government to combat the deadly virus, needs succour. While a massive Rs 20 lakh crore package has been announced to resuscitate the economy and the Union government has gone all out to bail out individual industry segments, hotels and restaurants are among segments that seem to have been ignored. Nair is leading the charge on behalf of the industry, having led the Federation of Hotel and Restaurant Associations of India for a long spell, but is anyone listening – or is he just crying out loud in the wild?
