Hotel industry presents wish-list of remedies in webinar with Piyush Goyal

Minister says he isn't anti-five-star, insists the state is willing to help, but hotels also need to come together as a sector

In a live Webinar chat with Union Minister of Commerce and Industry and Railways Minister Piyush Goyal,  representatives of the hospitality sector outlined a list of palliative measures such as tax-breaks, lower electricity charges and foreign income credit, given that hotels have had next to zero income the past few months due to the epidemic-related shutdown. 

The Industry highlighted the requirement to open up local railways, the life-blood of the economy for states like Maharashtra, and to allow for the ESIC Employees' State Insurance Corporation, which has excess funds of Rs 80,000 crore, to fund salaries for the sector, Vice President of Federation of Hotels and Restaurants Association of India, FHRAI  Gurbaxish Kohli said.

In response to queries on opening up local trains, Goyal agreed that "local trains are the lifeline of the economy but we can't take too much of a risk, and we are discussing how to gradually open it we have to create a balance between life and livelihood." He went on to say that New Delhi has opened some restaurants and the unlocking had started but it will have to be a continuous balancing act.  Goyal also said that the government has looked at hospitality in markets in Dubai and Europe but doesn't see any examples of success just yet. 

While Goyal acknowledged the huge contribution of the industry that employs some 50 million people  he noted that despite the industry being hurt, the world of hospitality would see a strong uptick when domestic consumption picked up and go further when a COVID-19 vaccine or cure was discovered. 

Typically, foreign tourists don't swap their dollars in Indian hotels but pay in local currency, or then pay tour operators in forex which leaves the hotels missing out on the export benefit of the earning. To that Goyal responded by saying the industry would have to rationalize its exchange rates to become more competitive with currency traders. "I am not anti five star hotels and the state is willing to help you but you need to come together as a sector," Goyal said, adding that he will discuss the matter of the request to defer statutory interest payments for bank payments and loans with the Finance Ministry. 

Kohli also said that "predatory pricing by Online Travel Agents was offering rates that even hoteliers couldn't offer to sell. When these OTA impress a pricing that you have to sell it hurts the sector." It was also being observed that illegal accommodations were being marketed by OTA players. 

Goyal said that he would look into getting a report on predatory pricing being used for data gathering  in the next three weeks. 

Hospitality Wish List

Interest charge-waiver by banks

Lower electricity charges 

Foreign exchange income credit 

ESIC Funding to Pay Staff

Source: NHRAI