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Pandemic fallout: Kerala tourism and hotel sectors in a tangle despite reopening

The opening of the tourism sector and beaches recently gave much-needed relief to the hotels and restaurants in the state.

Published: 24th November 2020 06:24 AM  |   Last Updated: 24th November 2020 12:13 PM   |  A+A-

As the city’s hotels, malls and other establishmentsdealing with the public open up, we check out what they have to offer in the covid-19 times.

Representational Image. (File Photo)

Express News Service

KOCHI: While owners say banks are not extending loans which are crucial to do repairs and make hotels ready to receive guests, banks are worried about the bleak prospects of repayment when the Covid situation is fluid.

The sectors want specific financial packages for them for revival if at all visitors start arriving

The opening of the tourism sector and beaches recently gave much-needed relief to the hotels and restaurants in the state.

However, the sector hasn’t received the required boost as many of the hotels haven’t begun their operations, especially in premium tourism areas like Kovalam. 

Officials of the Kerala Hotel and Restaurant Association (KHRA) allege that the government and private banks are not giving loans to the tourism industry to revive their business.

They add that the lack of support from the Central and state governments is worsening their woes.

illus: express

The tourism industry was already in a deep crisis as all hotels had been shut down from March following the pandemic.

Most of the hotel owners were paying the staff salaries and did essential maintenance works with zero revenue. 

“When we approach a bank for a loan, the response from the officials is that no loans are being given to the tourism or hospitality industry. This instruction is from the head offices of the respective banks,” said R Sisupalan, owner of Sagara Beach Resort and KHRA Kovalam unit president.

“Most of the hotels require heavy maintenance while reopening. For instance, the lifts, television sets, and air-conditioners in my hotel have become defunct. It requires a huge amount to get those rectified and the only feasible way is to do the works by taking a loan. This is the situation of many of the hotel owners in the state. When the banks are not ready to support us, the hotels are forced to remain closed. The lockdown period has taken back the tourism industry by at least 20 years. It requires a huge investment and support from the government to revive the tourism sector,” added Sisupalan.

According to another KHRA official, many hotel owners are on the verge of closing down their establishments. 

“The Central government has directed the banks to give 20 per cent of the existing loan amount as a new loan. We are not getting even that. The banks are not in favour of giving loans to the tourism, hospitality and aviation industries. As the tourism industry is the worst hit, bank officials fear that we won’t repay the loans. Though we can’t blame their apprehensions, the situation of owners is getting worse day by day,” he said.

The tourism sector brought revenue of around Rs 45,000 crore in 2019. Though the sector is slowly picking up, KHRA officials believe that the revenue may slide down further. 

“The Central and state governments announce a lot of packages, but these are still on paper. We are not benefiting from any packages. The concerns of hotel owners were taken up by the Confederation of Kerala Tourism Industry (CKTI) with the state government. Then, some of us received calls from a private bank offering a small loan. However, they didn’t contact us again and that hope was also lost. Most of the hotels in Kovalam are planning to open by December. However, for that, we should get loans at least this month to do the maintenance works, give salaries, pay electricity and water bills, and do works related to the hotel classification. There was no benefit for the tourism industry in the latest packages announced by the Union finance minister,” added the KHRA official.

Kovalam reeling

The lack of basic amenities and infrastructure is slowly throwing Kovalam out of the international tourism map, alleged hotel owners and residents.

“The tourism department takes up the maintenance works during the peak season causing inconvenience to the visitors. This year, we are only expecting local tourists by the middle of December when the schools close for the Christmas holidays. The footpaths, roads and drainage need to be upgraded. Kovalam has a set of regular international tourists. The tourism scene will get better only when the tourist visas are reinstated. Also, the government should withdraw the quarantine period, else no tourists will visit here,” said a KHRA official.

Banks analysing the prospects

According to a banking expert, many banks have already given Covid relief loans to the tourism, hospitality, and film theatre sectors. 

“New loans are not being approved as we are waiting to get the status of already approved loans. Industries like tourism are the worst hit and we need to analyse how it will be revived. Right now, we have no idea when the industry will be back on its feet. New loans would be approved if they start settling the existing loans. Currently, more personal loans are being approved to the salaried employees,” he said.

An official of the State Level Bankers’ Committee said the bankers are trying to not put those in the tourism industry in more debt. 

“The Guaranteed Emergency Credit Line (GECL) loans were given to many MSME customers and those in the tourism sector after checking the viability. The state government is coming up with a support scheme by which 50 per cent of the loan interest will be given as a subsidy. The SLBC has already suggested this scheme to all member banks. We are waiting for the approval of the respective banks. Many loan applications have come and once the scheme is approved, the loans will be provided according to the eligibility,” he added.



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