Budget FY23: Covid-hit hospitality sector demands infra status for hotels

With fresh wave of Covid plunging hospitality sector back into uncertainty, industry body said it has asked government to consider granting infrastructure status to hotels, extend moratorium on loans

With the fresh wave of COVID-19 plunging the hospitality sector back into uncertainty, industry body HAI on Monday said it has asked the government to consider granting infrastructure status to hotels, extend moratorium on loans and rationalise taxes.

In its pre-Budget memorandum, the Hotel Association of India (HAI) said policy interventions are imperative for the sector's survival and its early and quick rebound to normalcy.

"The hospitality industry was slowly getting into a recovery mode on the strength of domestic tourism leisure and events, only to be plunged back into uncertainty on account of the Omicron threat. It is critical to protect the industry during such prolonged periods of flip-flop in business prospects," HAI said in a statement.

Among the major demands from the sector is according hotels the status of 'Infrastructure' as it will resolve a large number of the issues being faced by hotels and hospitality companies, it added.

The step will also help survive operationally and encourage investments in the sector.

"Access to softer funding, longer periods to repay loans, resultant shortening of the gestation period will make hotel investments more attractive and sustainable. More hotels would mean more jobs, more development," HAI said.

Stressing that the sector's cascading effect on the economy has already been well established and documented, the association said,"infrastructure status will also enable hotels to avail benefits of lower taxation, utility tariffs and simplified approval process for projects."

Additionally, it said,"the road to recovery can also be aided through measures like extended moratorium, rationalisation of taxes and facilitating ease of doing business."

Hospitality industry contributes 9 per cent to India's GDP employing nearly 4.5 crore people and providing livelihoods to around 16 crore people, HAI said.

"Due to the pandemic, the potential shock to the livelihood of millions working in the hospitality industry is enormous. The Indian hospitality sector has a critical role to play in the post-pandemic economic revival and has been announced as the fourth pillar of the Indian economy," it said.