CHENNAI: No profit in takeaways, mounting debts and fiscal commitments including salaries have made survival of hotels and restaurants in the state a big question mark in these pandemic times, according to insiders.
Hotels in Chennai and those in the tier-II and III cities which offer takeaway menus, find the response from the people to be slow and unprofitable, owing to the pandemic.
As part of its efforts to curb the spread of coronavirus in Tamil Nadu, the state government has allowed hotels and restaurants only takeaway services.
There are an estimated 50,000 hotels and restaurants in Tamil Nadu and they have been allowed to provide takeaway services of food items but not dine-in.
Some hotels even launched takeaway menu options which can be ordered over phone, allowing people to enjoy a sumptuous meal sitting in the safety and comfort of their homes.
"Lodges and hotels are suffering due to lack of business and the parcel (takeaway) service has seen only 25 per cent business and is least profitable," M Venkada Subbu, president, The Tamil Nadu Hotels Association, said.
Uncertainty continues to shadow the sector and the hoteliers are not sure when the conditions would improve and pave the way for usual business activity, he said.
"Even if the hotels reopen in a big way from August 1, there will be no business for the next two months. Thereafter, it may pick up," Venkada Subbu told P T I.
R Rajkumar, secretary, Chennai Hotels Association, expressed concern over the revenue loss in the business ever since the lockdown came into force on March 24.
"There has been no business for the past four months. Despite this, we are duty bound to pay salaries to our staff who are still on the rolls," he said.
Revenue loss and payment of salaries are not the only problems afflicting the hospitality sector as various taxes add to the burden.
"We are paying property tax, water tax, rent and power bills too. And the important point is several hotels have been converted into quarantine facilities. We will have to disinfect all the rooms, only when normal life resumes," Rajkumar said.
Post lockdown, the hotels may find difficulty in convincing prospective clients that the rooms have been disinfected and are fit for use, he added.
The ban on hotels and lodges renting out accommodation continues in the state, although the government has allowed restaurants to sell takeaways.
Sending the staff who chose to remain during the lockdown, lack of business and mounting fiscal commitments would amount to sealing their own fate, reasons Venkada Subbu.
"So, we divided the remaining staff into two groups and are making them work in two shifts of 15 days each, thus utilising their services and paying them salaries as well," he said.
In order to stay afloat, the hotel associations are looking up to the Central and state governments for sops like GST refund at least for a year besides a waiver off all taxes due to the pandemic conditions, and help them meet their fiscal needs.