KOCHI: Around 100 non-profitable hotels which are on sale will find no takers with the abkari policy of the government not to allow bars in the state. Apart from these hotels on sale in the state, the bar hotels which will be closed after September 12 will also have a bleak future.
With the new abkari policy coming into force, bar licence will not be allowed to any of the hotels. Hotels can make profit only by renting out the rooms and operating the restaurants.
Kerala Hotels and Restaurants Association president Jose Mohan said that almost all the three star status hotels in the state are not profitable.
More than 100 of them are on sale and with the new policy of the government which do not attract investors, there will not be any takers for them.
When the bar hotels will be closed after September 12, the survival for majority of those in the business will be minimal. Those hotels which are on the highways and major towns could be able to manage with the restaurants and rooms.
“There are around 100 bars in the state which could start other business as they are located in towns. All others in the rural areas have to down their shutters and face revenue recovery from financial institutions from where they have taken loans,” Jose Mohan said.
The sale of these hotels will also be a Herculean task as nobody would be interested to invest here in the present circumstances, he said.
Kerala Bar Hotels Association president D Rajkumar said that there were 28 three and four star hotels which had applied for bar licence. Now it is clear that these hotels have to find out alternative steps to run the business.
“Apart from the hotels which were awaiting bar licence, there are also hundreds of hotels which are put on sale. With Kerala becoming a non-friendly state for investment, there will not be any takers for it,” he said.
Now notices have been issued by the Excise Department for the closure of all the 712 bars in the state. Some of the bars which do not have sufficient rooms to rent will have to find our alternative business or sell it.
Already the bar owners owe `760 crore to the Kerala Financial Corporation (KFC). This is apart from the Rs 3,000 crore taken as loan from various other banks in the State, Rajkumar said said.
The bar hotel business is a chain of activities including restaurant, rooms and selling liquor. Only this combination will enable the investor to make profit and running a restaurant alone will lead to a huge loss.
“In the present circumstances, the repayment of the loans will be affected with the closure of bars. The banks have sanctioned the loan amount considering the business in the long run and the sudden decision to close down the bars will end in default of loan payment,” he added.
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