Prithvi Raj Singh Oberoi, the executive chairman of EIH, has stated that the financially distressed tourist industry needs greater assistance than is now available and that the government should provide infrastructure status to the hotel industry.
According to estimates, the second wave of the COVID-19 epidemic in India would result in the loss of about 4.2 million jobs in the travel, tourist, and hospitality industry, accounting for around 10% of worldwide employment losses.
The Federation of Hotel & Restaurant Associations of India (FHRAI) estimates that the pandemic would cost the hotel industry about Rs 1.3 lakh crore in revenue in the fiscal year 2020-21.
“We feel that more should be done to safeguard the lives of individuals who rely on tourism. Further investments are required at this time, and fiscal and tax policies should promote them. More than ever, the government should explore giving the industry infrastructure status,” Oberoi stated in EIH's last annual report to shareholders.
For more than two decades, the hotel sector has been clamouring for infrastructure status. The industry was granted infrastructure status by the Congress-led United Progressive Alliance administration in 2012, albeit in a watered-down form that resulted in little improvement in the sector. Some of the advantages of having infrastructure status include a longer payback period and reduced borrowing rates.
The epidemic forced the closure of numerous hotel and resort establishments across India, which were unable to sustain the financial damage. When the Hyatt Regency in Mumbai, which is owned by Asian Hotels (West) in Delhi, closed six weeks ago, it was a great exit. According to the research firm STR, the epidemic has forced the closure of about 270 branded hotels.
“Tourism is still one of the most impacted industries by the epidemic, and the outlook is very bleak. The industry expected to stay in survival mode until well into 2021”, according to Oberoi,” as encouraging news on vaccines has increased expectations for recovery. However, obstacles persist, as shown during the ensuing second wave”.
EIH, a Delhi-based luxury hotel group with 30 properties operating under the Oberoi Hotels & Resorts and Trident Hotel brands and 4,567 rooms, had a drop in revenue in FY21. EIH's gross sales in FY21 was roughly one-third of the company's average annual revenues over the previous nine years, at Rs 473.6 crore. In the same year, it suffered a loss of Rs 343 crore, the first loss since FY 2012.
EIH took measures to reduce expenses and become more efficient in FY21. The firm claims to have cut fixed overhead by 28%, with pay and administrative costs accounting for the majority of the savings.
Source: Money Control