The Federation of Hotel & Restaurant Associations of India (FHRAI) has requested the government to provide soft loans to restaurant and hotel owners.
This will enable businesses in this sector to sustain itself without further losses
The association has said that financial assistance of this nature will help the hospitality sector to cover working capital.
In its recent representation to the government, FHRAI has raised concerns that the sector is finding it extremely hard to mobilise loans. Additionally, financial institutions have marked the industry in the negative list.
Surendra Kumar Jaiswal, Vice President, FHRAI, “It is no secret that hospitality is one of the worst affected industries as a consequence of the COVID-19 pandemic. It is natural that hotels and restaurants will take more time to recover as well. Our industry was the first to be locked and the last one to be reopened. So when we ask the government for support, it is because the government asked us to not conduct business for the longest duration.”
Jaiswal further added, “Hotels and restaurants are bound to face operational losses for quite some time. This is due to restrictions on operations coupled with low demand due to WFH culture. Other limitations include no foreign travel, low guest indulgence, etc. We have been knocking on all doors and will continue to do so until we receive some relief.”
Soft loans can support the industry till it returns to pre-pandemic revenues
D V S Soma Raju, Honorary Treasurer, FHRAI expressed his concern for the industry and said, “The Government through a soft loan, with a low rate of interest, can support the industry until it reaches the pre-pandemic business levels. It is necessitated all the more today because the industry is finding it difficult to mobilise loans. Financial institutions have marked the industry in a negative list or put it under a negative rating. Hotels and restaurants are struggling due to negative cash flows. Therefore, working capital support from the government will help restart and sustain their operations.”
Though the hospitality sector has reopened from the past three months, it has received a negligible response from travellers. The industry has registered only 20 to 30 percent of the average pre-pandemic revenues across India. Hence, businesses are finding it difficult to sustain.
FHRAI said that the industry was expecting the demand to rise in the month of November. This month marks the beginning of festivals and the holiday season.
However, this year the hospitality industry has no hope for international tourists to return. Furthermore, domestic tourism is at an all-time low due to safety reasons and the increased spread of COVID-19.