According to Money Control, The financially-battered tourism industry needs more help than provided and the government needs to give infrastructure status to the hotel industry, Prithvi Raj Singh Oberoi, the executive chairman of EIH has said.
Estimates suggest a loss of close to 4.2 million jobs together with the second wave of the COVID-19 pandemic in India in the travel, tourism and hospitality sector, which is around 10 percent of the global job loss data.
The Federation of Hotel & Restaurant Associations of India (FHRAI) said that the hotel industry has taken a hit of over INR 1.3 lakh crore in revenue for the fiscal year 2020-21 because of the pandemic.
“We believe more should be done to protect the livelihoods of people dependent upon the tourism sector. Fiscal and tax policies should encourage further investments which are necessary at this time. More than ever before the government should consider providing infrastructure status to the industry,” Oberoi said while addressing shareholders in EIH’s latest annual report.
The hotel industry has been clamouring for infrastructure status for over two decades. In 2012, the Congress-led United Progressive Alliance government had given the infrastructure status to the industry but in a watered down form which resulted in no improvement of the sector. A longer repayment tenure and lower borrowing rates are some of the benefits of having the infrastructure status.
Unable to bear the financial loss, the pandemic led to temporary and permanent closure of several hotel and resort properties across India. Mumbai-based Hyatt Regency, owned by Delhi-based Asian Hotels (West), was a prime exit when it shut down six weeks ago. As per research firm STR, around 270 branded hotels have downed shutters due to the pandemic.
“Tourism continues to be one of the sectors hardest hit by the pandemic and the outlook remains highly uncertain. Encouraging news on vaccines has raised hopes for recovery but challenges remain as seen during the subsequent second wave, the sector expects to remain in survival mode until well into 2021,” Oberoi added.
EIH, the Delhi-based luxury chain company which has 30 operational hotels under the brands Oberoi Hotels & Resorts and Trident Hotel with 4,567 rooms recorded a slump in revenue during FY21. At INR 473.6 crore, gross revenue of EIH during FY21 was around one third of the average yearly revenues of the company in the preceding nine years. It also posted a loss of INR 343 crore in the same year, which was the first loss since FY12.
During FY21, EIH took steps to bring down costs to become more efficient. The company claims to have managed to reduce fixed overhead by 28 percent, a majority of which is salary and admin related.