Tourism, restaurant sectors unhappy with no provisions in stimulus package

Online ordering of food has taken a hit as most restaurants and hotels continue to remain closed due to lack of labour or the increased risk to the staff due to the coronavirus

"The Indian tourism industry has gone into a state of disbelief and shock," said Nakul Anand, Chairman of the Federation of Associations in Indian Tourism & Hospitality (FAITH) on Sunday, in a letter addressed to the Minister of Tourism Prahlad Singh Patel. 

The hospitality and tourism sector is among the worst hit due to the ongoing Covid-19 pandemic, and is unlikely to recover any time soon as people continue to be cautious of going out in a crowded environment with strangers. Online ordering of food has also taken a hit as most restaurants and hotels continue to remain closed due to lack of labour or the increased risk to the staff due to the coronavirus. Tourism sites are also unlikely to see visitors any time soon. 

“We are very sad and extremely disappointed that the Hon'ble Finance Minister chose to completely ignore this sector in these five days of announcements of stimulus package," said  Anurag Katriar, President of National Restaurant Association of India. 

While FAITH claims that Indian tourism, travel and hospitality impacts almost 10 per cent of India's GDP, NRAI has been batting for a stimulus saying that the restaurant sector employs 7.3 million people, and is the second largest employer after agriculture in the country. 

 

Domestic and corporate travel within India may slightly ease up post lockdown but will be "highly restricted due to fear of travel among elders and children, social distancing norms, corporate travel freeze and the closure of the holiday season impacting all adventure, heritage, spiritual, cruise and niche tourism segments," said FAITH in the letter. 

The body also said the meetings, incentives, exhibitions and events segment will also be severely impacted, as a result of which, all tourism service providers, hotels, travel agents, tour operators, tourist transporters, restaurants, guides will have to operate with under utilised capacities making most businesses unviable on a cash operating basis.

Large online players in the tourism segment like MakeMyTrip have already started to pivot. Last week, the online travel booking firm said it is going to offer online gourmet delivery service in partnership with luxury and premium hotel chains and independent properties across cities in India. Others like online food delivery platform Zomato laid off about 520 people, and adopted a leaner structure to conserve cash in the uncertain environment. 

In an email to employees, Zomato co-founder Deepinder Goyal said some restaurants listed on the platform have already started shutting down, and he expects the number of restaurants to shrink by 25-40 per cent over the next 6-12 months.

 

Among the main demands of NRAI were an option for input tax credit on Goods and Services Tax, declaring the pandemic an incident of force majeure like announced for the real estate sector, and a better and equitable e-commerce policy to protect the interest of lakhs of small and large business as against protecting the interests of a handful of aggregators like Zomato and Swiggy. 

NRAI had also asked for a partial compensation of wages for those employees who are covered under the Employees State Insurance Act, and working capital on easier terms and six month's moratoriums.

Similarly, to ensure survival of the sector, "FAITH had proposed a dedicated interest and collateral free long term fund for paying salaries and operating costs and for minimum 12 months complete waiver of fixed central & state statutory and banking liabilities without any penal or compounding interest which have not been addressed," said Anand in the letter to the minister. 

Both bodies have renewed their demands and said the sectors will be unable to survive without help from the government, and lakhs of people stand to lose jobs as they stare at the possibility of being out of work for a year or more.