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Centre must provide financial relief to the hospitality industry: Industry experts

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The Novel Coronavirus cases, globally, have been increasing dramatically ever since its outbreak late last year in the city of Wuhan in China – reportedly the epicenter of the virus outbreak, ahead of the Chinese New Year. The worst-hit Italy, West Asian countries, some of the South East Asian countries and the WHO declaring it a pandemic, hinted many countries including India to take cognisance of the impact of the virus on human life and gradually the economy.

Although vigilant measures were put into action by the Centre including screening of key international airports which gradually melted down to screening of travellers at all airports made compulsory and advising the citizens to maintain due diligence to flatten the curve, by following simple measures like social distancing to timely sanitisation, the virus spread across the country due to many reasons right from citizens hiding international travel history who later tested positive of the virus; to violation of quarantine period by people who tested positive of the virus. While the number of cases were in single-digit during late January this year in India, it spiked almost instantaneously and has seen a rise of over 4-fold as compared to the number of confirmed cases across the country over a week’s time today.

While the outbreak of the virus kept escalating within the country, India’s one of the largest employing industries – the hospitality industry plummeted the most. In the early days of the outbreak, many foodservice brands observed maintenance of high standards of hygiene at all their outlets.

Riyaaz Amlani, CEO & MD, Impresario Handmade Restaurants, said, “At Impresario, it is our responsibility to prioritise the health and well-being of our community as well as our employees. To this effect, we have intensified our safety and hygiene protocols across all our outlets and workspaces. Our goal is to always give you a safe and comfortable experience at our restaurants, and we will take every measure to ensure this happens seamlessly.” Not just it, but Tata Starbucks Beverages too encouraged patrons to carry their own tumblers for coffee while levying an additional discount on doing so. However, the industry along with malls, multiplexes and gyms, foodservice space at large which comprises all eateries pan India, was directed to shutter the dine-in space and to operate under the order-only model, in order to break the chain of community spread of the virus.

Riyaaz Amlani

While many states follow a complete lockdown of businesses – discouraging public gathering, many industry experts are seeking help from the government such as “deferment of statutory dues to the centre and state governments; moratorium on bank loans; pay cover for marginal employees, etc.,” per today’s letter written by Anurag Katriar, president, NRAI to Hon’ble FM Nirmala Sitharaman, to keep the foodservice segment afloat in the country.

Anurag Katriar

The industry is already hurting with the impact of the pandemic. “The government is gradually instructing shutdowns based on ground reality and at present, it has advised practicing social distancing. People are withdrawing from eating outside at restaurants as well as hotel room bookings have come to a standstill with all prior bookings cancelled. In the short term this will affect the way hotel and restaurant establishments who conduct everyday operations. Limited staff, squeezed liquidity, steady outgoings, and no customers will translate to losses and based on their respective appetites, each enterprise will then have to make a decision on how to carry on their business,” expressed Gurbaxish Kohli, VP, FHRAI.

Gurbaxish Kohli

In this regard, amid the ongoing downfall of businesses, Gaurav Dewan, COO and business head, TFS which handles eateries at airports pan India, said, “We are strongly emphasising our sanitisation procedures across all our formats across India, and have set in processes to create safe zones within our outlets for our employees, guests and associates. As precautionary measures, we have sanitisers available at all touch-points at all units, and temperature checks are being started at all entry points for both guests and our employees. Other measures include training, and sensitise our employees and associates to the protocol prescribed by the government authorities, sanitisation of all furniture, handles and other high touch areas, increased frequency of handwashing and use of medical-grade disinfecting solutions in the outlet and kitchen. We are all dealing with very challenging times currently, as we grapple with the economic slowdown we have been bombarded with this global health crisis. Almost all industries are dealing with the impact of this. The travel and hospitality industry in particular has been severely affected by this. Our people are at the heart of our business and therefore we are taking steps and measures to mitigate any job losses and ensure job security for our team members in the long run, despite the immense challenges in the short and medium-term.”

Gaurav Dewan

Though, some are guaranteeing at job retention of employees post the dip in the impact of the virus, speaking of the current situation, Gauri Devidayal, director, Food Matters, feels that the situation is extremely bleak. The restaurant industry is one of the highest employers directly and indirectly and closing down of this industry will lead to 20 per cent unemployment nationwide.

Gauri Devidayal

Industry experts lament that there will be tremendous unemployment coming in as long term impact of the virus’ outbreak on the Indian hospitality industry. “We are hurtling towards the collapse of many hospitality businesses. Those that have been in business for many years and have been profitable perhaps have some staying power. Also, who have private equity or institutional funding and with deeper pockets might have the ability to tide over for a couple of months. However, the majority of small and standalone restaurant owners will have no cashflow once business shuts. This is a business that is dependent on cash flow management more than any other and the eradication of cash flow in the topline means you have nothing coming in. There is also the aspect of fixed expenses to consider such as salaries, rents, utilities, which constitute approximately 50-60 percent of overall expenses. In the long term, there will be a mass wipeout and collapse of the hospitality business across the country as well as the world,” explains Rahul Akerkar, founder & managing partner, Qualia Hospitality.

Rahul Akerkar

Seeking the government’s help, to weather this storm, Pankil Shah, director and co-founder, Neighbourhood Hospitality, voiced, “We will need the support of the government and most importantly, the support of our guests. If things do not improve, we could be looking at layoffs on a large scale and a massive decrease in the tax revenue that the food services industry generates.”

Pankil Shah

In another move to reduce the panic which is on the rise country-wide with the increasing numbers of positive cases of the virus, To safeguard the well-being of the community (team + guests), Nikhil Kapur, founder director, Atmantan Wellness Centre – a luxury wellness centre in Mulshi, near Pune said, “We have converted ourselves into an Isolated Getaway for a select number of guests on any given day. We have only essential team members and limited guests on our premises. Many precautionary measures have been introduced that include – no guests with overseas travel history of two weeks prior to check-in; Doctor screening at the Welcome Pavilion before check-in; Move towards vegetarian cuisine (not that chicken/fish is related to transmission of Covid-19… but the freshness of stock and handling is suspect); All of our residential staff (50 per cent of our team) can’t leave premises till month end; We have organised delivery for their essential utilities; FOMITE SOP – periodic cleaning of all surfaces that are touched by more than one person – door knobs, handles, steering wheels of our cars, counter-tops, tables, bottles, etc.; No newspapers till March 31; All other measures recommended by Ministry of Health & Family Welfare, India & local health authorities.”

Nikhil Kapur

The respondents unanimously pointed that unlike other countries battling this situation, India has not declared stimulus packages and financial support for the hospitality sector. It is imperative that the government step up and calm the jitters of the millions operating both as employees and employers in the hospitality sector. Rentals are another major issue which can be as high as 25 per cent of turnover and it is imperative that without cash flow, landlords or the government step in and bail out business owners. There needs to be a moratorium on loan-repayments, interest repayments. The state needs to waive and extend timelines on excise license renewals and VAT payments, utility payments, statutory waivers from the central government or at least defer for many months to come.

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