FHRAI requests PM Modi to extend moratorium period of loans by three months with immediate effect
With minimal occupancy during the lockdown, barely 10-20 per cent occupancy in unlock, cash crunch and piling costs of rental and salary bills, statutory payments among other establishment costs, the hospitality sector is desperately looking for relief, as many establishments otherwise might end up shutting down.
Federation of Hotel and Restaurant Associations of India (FHRAI) that represents 55,000 Hotels and 5,00,000 Restaurants in the country is incessantly receiving requests from hospitality establishments spread across the nation to write and request to the Government for extension of the moratorium.
An unprecedented mayhem orbiting around the hospitality industry has put both the owners and employees into a tough spot. The sector is seeing a severe cash crunch with nil revenue inflow, which has led to millions of employees losing their livelihoods. With no viable signs of recovery on the horizon, even after the announcement of unlocking.
In the letter to the Prime Minister of India, Narendra Modi, Gurbaxish Singh Kohli, Vice President, FHRAI has requested for the extension of the moratorium. The letter highlights how the industry is having a hard time due to no revenue amidst the lockdown and even after announcement of unlocking. It states that there have been no bookings and customers at the Hotels and Restaurants that have resumed operations. Occupancy is as low as 10 to 20 per cent wherever the sector is opened. Furthermore, the industry needs to pay the rental and salary bills, statutory payments and meet the establishment cost. They have to invest more on hygiene and safety measures to abide by the SOP’s and guidelines issued by Central and State governments. In addition to that, many of the members including Hotels and Restaurants have gone into bankruptcy already.
In like manner, the association has appealed to the prime minister to consider the debt restructuring plan announced by the RBI for the stressed MSMEs which is not going to help the hospitality sector due to the aforementioned reasons. Kohli added, “90 per cent of the hospitality sector will not be able to avail the debt restructuring plan due to varied reasons, hence turn out to be NPAs post 31st August 2020. The debt restructuring plan will provide a window for the banks to undertake coercive action against the borrowers whose repayments are pending.”
The letter apart from requesting the prime minister’s intervention has also expressed that how the extension of moratorium for another three months could help borrowers/ hotels to restructure existing loans as the process of restructuring is time-consuming.
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