Hotel Association of India (HAI) has said that the Indian hotel sector will collapse if not supported by the government or Reserve Bank of India (RBI).
The latest study by McKinsey & Company has identified airlines and hotels as the worst impacted sector in India, with around 75 per cent output decline in Q1 FY21 vs Q4 FY20.
In 2020, the revenue loss to the hotel industry is expected to be around ₹90,000 crore.
“The pandemic has led to demand destruction in excess of 90 per cent for the tourism and hospitality sector which employs nearly 4.5 crore people; provides livelihood to around 16 crore people, and contributes nine per cent to India’s GDP,” HAI said in an official statement.
Although RBI has announced an immediate term to avert the crisis by allowing relief on loan moratorium on interest and principal repayment, HAI believes that more relief measures are required.
The current debt levels in the organised part of the industry (which is less than 10 per cent of the total) stands at ₹45,000 crore.
HAI is recommending relief for those companies with good credit history i.e. standard assets as on March 31, 2020. HAI is proposing an extended tenure and a staggered approach to the applicable rate of interest in three stages of “survival, revival and thrival” for a return to normalcy.
