Pushed to brink, hotel industry is devising new strategies to survive in Covid pandemic
Arasu Dennis of AD Associates who runs five bars in Chennai said that a third wave and a consequent lockdown would ring a death knell for many of them.
CHENNAI: Ours is an industry in quandary, lamented Pradeep Kumar (name changed), the manager of a medium-scale restaurant in the city. Having seen the ebbs and flows of the industry for more than 15 years, he said that the pandemic and the lockdowns have shaken years of established strategies.
Since March last year, around 35 per cent of food establishments (coffee shops, branches of restaurant chains, single-owner entities, etc.,) of varying sizes have shut shop in the State, according to a member of TN Hotels Association. Establishments possessing FL2 (clubs, restobars, pubs) and FL3 (star hotels) licences too are bearing the brunt.
Tamil Nadu Hotel & Club Owners Association (TANBAC) President Dr Benze Saravanan said that around 800 clubs are functioning across the State and 29 of them, particularly in Chennai and Coimbatore, are worst-affected. He informed that “13 two-star and three-star hotels are up for sale now.”
Arasu Dennis of AD Associates who runs five bars in Chennai said that a third wave and a consequent lockdown would ring a death knell for many of them. Echoing his concerns, Coimbatore District Hotels Association President D Srinivasan said, “Unlike Chennai, we are still having weekend lockdowns and curfew after 6 pm.”
On condition of anonymity, a bigwig in the industry told Express that a 55-year-old entrepreneur who had invested `80 crore in a tier-II city just before the outbreak of the pandemic allegedly killed himself as the project did not take off.
At least 13 associations (collectives of restaurants, hotels, pubs, clubs, and star hotels) are functioning in the State. Each of them have at least 100 to 500 members. All of them, at times having cross-memberships in other associations, are urging the State government to intervene to tide over the crisis.
In June this year, The Chennai Hotels Association (TCHA) had written to the Chief Minister MK Stalin to announce a waiver of rents, GST penalties, EMIs, taxes imposed by local bodies, power bills and late-payment charges for the entire lockdown period by invoking ‘force majeure’ clause, as per the order of the Madras High Court. TCHA President M Ravi said that the government has not initiated any talks. Pradeep said that the pandemic has disturbed the expenditure pattern.
“Usually 10 per cent of the turnover goes to rent. Around 20 goes for labour cost, 30-40 for procurement of raw materials and maintenance charges. Only 30 per cent is the profit.”
However, after the gradual relaxation of lockdown restrictions, establishments in the food and beverage industry are reworking their math. Sanjeev Verma, managing partner of Black Orchid restobar, said the second wave-induced lockdown gave an opportunity to begin takeaway and delivery provisions. Shutting down non-profitable branches, retaining the employee strength, purchasing raw materials from wholesalers and farmers directly were some of the measures listed out by Ravi, who is also the Executive Chairman of Vasanta Bhavan.
Some of the bars and clubs are introducing happy hours, offering post-pandemic introductory offers, reducing manpower through digitalisation, cutting down on power consumption and reducing security personnel by installing CCTVs. Adyar Ananda Bhavan Managing Director K T Srinivasa Raja said that he is hopeful of a silver lining.
“Plans are on to open branches,” he said.
We are overburdened as many of my colleagues have left jobs and we are not paid for the extra work
— Gopi Krishna,an employee of a city restaurant
Uncertainty has led us to find jobs in our own home towns. Many of my friends lost jobs, some were asked to go on leave but never got called back
— Suresh Kumar (name changed), an employee of a popular chain, who is settled in his home town