Helping the hospitality sector
A day after hotels and restaurants reopened in Odisha as part of the unlocking strategy, the state government shut them down again till the end of August. Hundreds of hotels and restaurants across the state are now looking at imminent closure as the coronavirus surge keeps them from normal activity, permitting only in-house guest service along with takeaways.
There are more than 5,000 hotels and restaurants in the state that have been virtually gasping for breath after the lockdown was first imposed. After over four months, most are reeling under the burgeoning fixed costs and minimum demand charges by civic and infrastructure agencies. Rubbing salt on the wounds is the hike in minimum wages that only adds to the salary bill. Many are impatient and ready to let go of staff, which would impact the unemployment scenario in the state.
Apart from the shutdown, the apathy of the government is also hurting the industry big time. Despite low-capacity utilisation over the years, tourism as a sector, with its immense scope, was beginning to look up but the pandemic arrived to deal it a body blow. The scenario is almost identical elsewhere in the country as states are adopting caution while permitting hotels and restaurants to reopen. Statistics suggest that the tourism and hospitality sector has suffered an above 90% demand loss due to the pandemic.
Though the Reserve Bank of India announced interest relief on loans, the industry is not convinced that this would make any sizeable difference to the gigantic losses the sector has sustained. Directly employing over four crore people and supporting the livelihood of a population many times over, the hotel and tourism sector is in need of urgent help. The Centre will have a role to play in terms of extending subsidies and moratorium as well as interest waivers, but individual states must also wake up to the problem.
If the economy has to reboot and it must, the tourism and hospitality industry has to play a key role given its contribution to the GDP. In fact, it is one sector that can likely adapt to social distancing norms better than others. It must be given a chance at graded reopening before it is too late.