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70% small hotels on brink of closure, says industry body

New Delhi: Hotel Association of India (HAI) on Thursday said its preliminary data suggests a deep impact of the pandemic on the hospitality sector. The association said more than 40% of hotels have shut and about 70%, mostly small ones, will face closure as pandemic-led restrictions continue to disrupt business.

“The total damage has not been assessed yet but our preliminary understanding is that more than 40% of hotels have shut and about 70%, mostly small ones will face closure. Smaller hotels are facing grave problems. If this prolongs for a longer duration without remedial action, the sector will have irreversible dent on its business,” said MP Bezbaruah, secretary general, HAI.

The industry body has recently appealed to Prime Minister Narendra Modi for immediate intervention to provide relief to the hospitality industry which is on the verge of collapse. It highlighted five key areas that require immediate attention. It sought one-time settlement of loans and extension of loan moratoriums till September 2021; waiver of all statutory liabilities at Centre, state and municipal levels for the pandemic period; stimulus package-subsidising of salaries of hotel employees, according ‘Infrastructure Status’ and to bring Tourism & Hospitality to the concurrent list of the Constitution.

“Hospitality industry remains one of the most impacted sectors in the country and continues to bleed due to covid restrictions and inadequate financial reliefs from the government. Hotels across categories have almost zero revenue and continue to suffer. As an industry, we have been asking for timely action from the government,” said Bezbaruah.

The industry, which also employs people from different educational and economic background, faces the biggest human resource challenge with 70% of overall jobs now in danger directly or indirectly.

“The exact assessment has not been possible yet. In India, there are about 40 million direct jobs in tourism and hospitality sector. Millions more indirectly depend on the sector. It has been assessed by various agencies that this sector has been impacted by about 70-80 % of normal operations. So, the extent of jobs lost or being vulnerable can be imagined,” noted Bezbaruah.

HAI has requested PM to offer stimulus package-subsidising of salaries of hotel employees by 50% from April 2021-March 2022 as is being done by many countries as a part of their economic recovery programmes.

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