The ongoing Covid-19 pandemic has decimated India's hospitality industry, with millions of professionals and employees losing their employment and hotels closing their doors daily. Over 20 million individuals are believed to have lost their jobs as a result of the pandemic, which is roughly half of the overall workforce in the industry before the virus breakout early last year. Experts say the epidemic has roiled the hotel industry, from five-star establishments to smaller budget hotels.
According to the Federation of Hotel & Restaurant Associations of India (FHRAI), an apex body, 40% of hotels and restaurants have permanently shut down. Since the initial lockdown last year, almost 20% of businesses have not been able to operate at full capacity; the other 40% have incurred huge losses as a result of the country's catastrophic healthcare crisis. In fiscal 2020-21, the industry's sales have been wiped off by 75% compared to the previous year.
J.K. Mohanty, honorary secretary of the Hotel Association of India (HAI) and managing director of Swosti Premium, told Khaleej Times, "I do hope this is a short phase and the situation improves since the nation is striving hard to reign in the contagion."
Mohanty, who is also the chairman of the Hotel and Restaurant Association of Odisha in eastern India, claimed the industry was facing a severe liquidity shortage. He leaned on the side of caution, stating that the tourism industry is unlikely to recover quickly.
To encourage tourism, the Narendra Modi-led government recently announced that it will grant half a million free visas to international visitors till March 31, 2022. Mohanty, on the other hand, thought the scheme should be extended for another year.
Last week, India's tourism minister, G. Kishan Reddy, informed Parliament that the sector had lost 62% of its jobs in the first three quarters of 2019-20. Worse, the tourist economy shrank by 93%, as assessed by tourism direct gross value-added. Tourism-related foreign exchange profits fell by 76% in 2020.
According to Gurbaxish Singh Kohli, vice-president of FHRAI, the hospitality and tourism sector will take at least five years to return to normalcy. Sherry Bhatia, president of the Hotel and Restaurant Association of Western India, said that almost 40% of restaurants and hotels in Maharashtra have permanently closed. Hyatt Regency has announced the closure of its hotel in Mumbai, with several others following suit.
Several hotels have failed to pay their employees' salaries or return their loans to banks and other financial institutions. Vendors and suppliers are in a bind as well, with unpaid dues piling up. The FHRAI has previously warned that the pandemic may lead 70% of the 55 million-strong workforce, including those employed directly and indirectly, to lose their employment. The tourism industry in India is projected to be worth 5 trillion rupees.
Vidhi Godiawala, STR's, a major multinational organisation that analyses the hotel sector internationally, business development manager for South and Central Asia, commented on the situation.
"In the early part of this year, we witnessed India's resilience as an emerging market play out. Unfortunately, due to the fatal second wave of the viral plague, lockdowns have limited travel and businesses have suffered significant losses in recent months," he added.
"However, recovery from the first wave gives us cause to hope there is light at the end of the tunnel for us," he said.
Source: Khaleej Times