NEW DELHI: Members of the Federation of Hotel & Restaurant Associations of India (FHRAI) met union tourism minister Prahlad Singh Patel and MSME minister Nitin Gadkari to seek immediate measures to save the sector from collapse.
The body estimates that 40 per cent of hotels and restaurants in India have shut down permanently due to financial losses, and about 20 per cent haven’t opened up fully since the first lockdown.
The remaining 40 per cent continue to see losses.
“The pandemic has devastated the hospitality sector, businesses are steadily closing and NPAs are rising,” said Gurbaxish Singh Kohli, Vice President, FHRAI on Wednesday.
To note, Hyatt Hotels Corporation on Monday announced that it was suspending operations at Hyatt Regency hotel in Mumbai ‘until further notice’ due to a shortage of funds.
According to FHRAI, the industry’s total revenue in FY 2019-20 stood at Rs 1.82 lakh crore and, in FY2020-21, approximately 75 per cent, or Rs 1.30 lakh crore, was wiped off due to the Covid-19 lockdowns.
The total loan outstanding to the hospitality industry is over Rs 60,000 crore today, it added.
The body suggested bringing the tenor of the Emergency Credit Line Guarentee Schemes at par with the tenor of ECLGS 3.0, and the provisioning of additional funds. It also sought the removal of the Rs 50 crore cap under the special restructuring window for stressed companies.
Kohli said, “Our recommendations include complete waiver of interest on loans beginning March 2020 till business normalcy resumes, provision of a moratorium of three years on the principal loan amount, working capital support at interest on fixed deposit rate plus 2 per cent or MCLR rate, urgent release of SEIS pending payments, removal of secondary condition in EPCG and introduction of a long term financing scheme for at least 10 years backed with a guarantee from RBI.”
Last week, the RBI had announced a Rs 15,000 crore liquidity window for the tourism and hospitality sectors.