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Indian hotel industry faces loss of over INR 1.30 lakh crore due to COVID-19 pandemic: FHRAI

Indian hotel industry faces loss of over INR 1.30 lakh crore due to COVID-19 pandemic: FHRAI

The Federation of Hotel & Restaurant Association of India (FHRAI) in a statement released on Sunday, May 30, 2021, said that the Indian hotel industry, during the coronavirus (COVID-19) pandemic, faced a revenue loss of over INR 1.30 lakh crore. This has been calculated for the fiscal year 2020-21 as the pandemic has had a harsh impact on the sector.

Details regarding the same were submitted by the  body during a meeting with the Prime Minister, Narendra Modi, and other ministers from the cabinet, with an aim to receive immediate support from the central government. The motive was also to help the sector from collapsing in these tough times.

The statement shared by the body read, "The Indian hotel industry's total revenue in FY2019-20 stood at Rs 1.82 lakh crore. As per our estimates, in FY2020-21, approximately 75 per cent of the industry's revenues got wiped off. That is more than Rs 1.30 lakh crore revenue hit," further adding that several businesses in the sector have been shutting down due to the crisis.

Sharing more information, FHRAI Vice President Gurbaxish Singh Kohli, said that the effect has been seen since March 2020, whereby the sector has struggled to manage both the statutory and capital expenditure obligations. Businesses have been finding difficult to repay loans. Moreover, payment of the interest in this scenario is impossible as the effect due to the surge has affected the industry in the worse possible manner. 

Kohli further added, "Without a moratorium on EMIs and interest payments, the sector will completely crumble. We request the Government to offer a sector-specific policy which can mitigate all adverse financial impact including debt obligations accrued or to be accrued towards banks, financial institutions or any other entities, in view of the current circumstances and its long-term repercussions. Without wasting any more time, the government should make necessary special provisions to waive statutory charges for the hospitality sector." Kohli said.

The body have also suggested that the government should offered a waiver of excise license fee, electricity and water charges, property tax, etc. The body mentioned that ignoring the sector during this time will ensure many businesses do not return. FHRAI Vice President Surendra Kumar Jaiswal said, "Along with moratorium extension of three years the industry will need a complete waiver of interest on the loans from March 2020 till the time that business is normalised."

Besides this, demands have been made to compensate the employees from the sector who have lost jobs during the pandemic effect, as their families have been suffering the brunt of losing jobs and income.

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