Hospitality Industry Seeks Financial Support Amid Covid-19 Crisis

The sector wants the government to set up MNREGA-type funds in order to pay the salaries of employees for next 12-months.

The domestic tourism and hospitality sector wants the Central Government to help lakhs of people employed in the sector due to the lockdown in the country announced to break the chain of spread of coronavirus. In this regard, the Federation of Associations in Indian Tourism & Hospitality (FAITH), and leading industry body, ASSOCHAM have urged the Central Government to set up a support fund for 12 months, on the lines of MNREGA, to support basic salaries with ‘direct transfer’ to employees and workers in the Tourism and Hospitality sectors.

With more than 350,000 confirmed coronavirus cases worldwide, the pandemic is seen to be accelerating day by day. Due to which, the authorities are taking stringent measures to prevent the spread by enforcing rules to shut the workplaces and advising people to stay at home.

Roop Pratap Choudhary, Managing Director, Noor Mahal, Karnal said, “The hospitality industry both international and domestic is experiencing its impact, the dent it is putting on the country's and global economy is evident. It is critical to take all steps to contain the spread of this virus even if it means that the industry has to experience a slow pace.”

While these measures will help in reducing the spread but it has also resulted in a major downfall for most of the sectors, specially the tourism and hospitality. With travel being completely on halt, the hotels and resorts are out of business and have closed in support of the safety of the guests.

Expressed his concern, Jaideep Dang, Managing Director - Hotels & Hospitality Group, JLL said, “Business-wise, it will likely have an impact on the hospitality sector, especially on luxury hotels. Luxury chains have about 60-65 per cent foreign travellers in their total guest composition and a large chunk of their business will potentially be impacted this season.”

Giving a point of view from the aviation sector, Rajan Mehra, CEO, Club One Air said, “It is fair to say that COVID19 will have far-reaching impact on economies around the globe. However, the business that will get effected the most would be the travel-related industries - airline, hotels, tour operators, cruise companies etc. Their business is currently at a total standstill, and one does not know how long this will last. The longer the problem continues, the deeper will be the impact. Many commercial airlines could go out of business.”

According to the data, the hospitality industry is the key driver of economic growth and supports millions of jobs. The industry encourages community development and provides guests with unique experiences.

In these unprecedented times with the COVID-19 pandemic, most of the hoteliers are reporting projected revenue loss of more than 50 per cent for the first half of the year.

Amresh Tiwari, Vice Chairman, India Convention Promotion Bureau said, “As the world is battling COVID-19, declared Pandemic by WHO, the adverse impact with enormous economic implications is staring hard at all industries particularly the ‘Conventions Industry’ – a major niche product of the Tourism sector."

"In the current scenario, the stakeholders of the MICE (Meetings, Incentives, Conventions/Congress and Exhibitions/Events) industry are reporting large scale cancellation of events, meetings, conferences resulting in huge business losses. This has already compelled many companies to lay off a large no. of employees”, he added.

The hospitality sector depends on travel, trade, and tourism for its business and sustenance. The rapidly falling occupancy rates will have a devastating impact on jobs.

According to FAITH, this pandemic can be responsible for 3.8 crore people going out of work globally, which is around 70 per cent of the total workforce in the tourism and hospitality sector.

"With declining revenues almost all tourism businesses are running out of working capital. However, with the responsibility of staff and payment of their salaries, EMIs to service, advance tax, PF, ESIC, GST, excise and other state levies, bank guarantees, security deposits, this industry needs your support now more than ever," said the letter written by Industry Veteran Nakul Anand, Executive Director, ITC and Chairman of FAITH.

ASSOCHAM Tourism Committee and FAITH have urged both the Prime Minister and Finance Minister to set up a support fund for 12 months on the lines of MNREGA to support basic salaries with ‘direct transfer’ to affected tourism employees.

According to the World Travel and Tourism Council (WTTC) projections, COVID-19 could cut 50 million jobs worldwide in the travel and tourism industry and Asia is expected to be the worst-affected continent.


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