‘Hope for the Best and Prepare for the Worst’

SPEAKING ABOUT the impact COVID-19 has had in the hospitality business, Souvagya Mohapatra, Executive Director, Mayfair Hotels & Resorts Ltd told BW HOTELIER that, "If the lockdown is further extended, many businesses will face an existential threat which will have wide adverse ramifications on the overall tourism landscape of the country."

EXCERPTS:

Mayfair is one of the biggest regional hospitality chains in the East and North East. What has been the impact of the lockdown on your business?

Although every sector is facing the heat of COVID 2019 pan India & across the globe, the one that has been most severely impacted is the Hospitality and Tourism Industry. Our case has been no different. Occupancy rates have already started plummeting steeply since early March and eventually after the lockdown, it touched the nadir. Cancellation requests for over 4000 room nights and 100’s of events were received in a matter of 3-4 days and to say the least, this magnitude of the crisis is simply unprecedented in terms of revenue losses. Given the state of uncertainty that still prevails, the road ahead from here on appears very daunting and dismaying which will continue for many months hereafter.

Are you supporting the efforts of the Government in all locations you are present in and how?

Being a brand with eleven properties across five states, our response & support in this regard has been area specific. We have fully supported & complied with all advisories issued by the Government, both Central and State right from social distancing to SOP’s of lockdown. Compiling to various appeals by the Government in supporting the community at large, many common initiatives have been undertaken like distribution of food packets amongst the needy and unprivileged, closure of all contact points, implementing social distancing, etc to name a few. This apart, we are also running awareness campaign through social media for sensitizing everyone on the need to make safety and hygiene practice a non-negotiable aspect of life, which today remains the most potent weapon to fight this pandemic. Similarly, there are many alike initiatives that we have undertaken to supplement and strengthen the Govt. efforts to stall the spread of this contagion.

The East and North East are markets which were just showing remarkable progress and opening up to both domestic and international inbound travellers as well as MICE. What is your view will be the impact of this lockdown given that the industry in your region was on an expansion mode, what is your take on that and message?

The most pronounced impact of COVID-19 outbreak is expected to be on the emerging markets of the Eastern and North-Eastern India which were looking very good. Lack of adequate Hospitality Infrastructure was always the cause of concern in the East and North East market which impeded the proper growth of tourism in these regions and this pandemic has only exacerbated this concern. Already faced with insurmountable revenues losses, if the lockdown is further extended, many businesses will face an existential threat which will have wide adverse ramifications on the overall tourism landscape of the country. Inbound, MICE and Wedding segments which were on the verge of an upward trend in these regions will certainly go down drastically and will take a long time to revive.

The most unfortunate aspect is that this comes at a time when tourism in these Eastern & North Eastern States were showing remarkable progress. One hopes that Govt. - both Central and the State, which has already done much to promote tourism growth, will make a timely intervention to save the Tourism Industry stakeholders and help them stand back on their feet.

Post-COVID pandemic, do you see a possible change from expansion to upgradation in the hotel industry players’ action plan? Please explain.

It is expected that it will take anywhere between 12-18 months to develop a vaccine or drug for COVID-19 eradication. Till then, the probability of its reemergence will always be there. This is to say, though we may expect the lockdown to be lifted on 3rd May 2020 the restrictions on travel and social gathering will more or less continue to be in place for the upcoming months. Inbound as well as outbound tourism will witness a very tepid movement and in this light, expansion or upgradation may not be the right strategy to go for, at least not in 2020. This year will be very tough and businesses need to plan viable strategies, keeping in mind the uncertainty and gloomy global trends.

What are the interim relief measures that the hospitality industry expects from the policymakers?

Due to this unprecedented situation, about 5 lakh crores revenue loss is expected during the next year in the Hospitality Sector. For the industry to survive and sustain a livelihood, we request the following from the Central Government.

* While the industry has received the moratorium for 3 months, however, the industry needs a minimum of a 1-year moratorium on all working capital, principal, interest payments, loans and overdrafts.

* Collateral & interest-free loan up to 5 years for SMEs in tourism which will help them sustain and rebuild.

* Deferment of GST & Advance Tax payments at the Central Government level and removal of Fees for any upcoming licenses, permits/ renewal.

* Bail out packages to fund and support the salaries in the Tourism and Hospitality Sector.

* GST rates on hospitality should be slashed for at least two or three years, since, currently, large hotels are charged a GST rate of anything between 12% and 18% based on room rate charged. Now that hotels are almost empty & the future to appears to be bleak, the GST rate should be brought down to 5 or 6%, with immediate effect.

* Restore SEIS scrips for duty credit of 10% to the Tourism industry.

* Bring ATF under the ambit of GST to provide long term relief to airlines, as well as rebates on landing, parking and housing charges.

* Incentives for the Indian corporate for holding meetings & conferences in India with 200% weighted deduction of these as tax expenses against GST invoices.

* Incentives for Indian citizens through LTA like income tax benefits for holidaying within India. These could be a deductible expense (for eg of up to ₹ 1.5 lakhs) against GST invoices.

We have also request for the following relief measures from the State Governments & the same should be insisted upon by the Central Government:

* A deferment for twelve months of all statutory dues with respect to license fees, property tax and excise fees.

* A deferment in the increase of insurance premium for 12 months such as standard fire and special perils rate for fire, loss of profit.

* Electricity and water to tourism & hospitality units should be charged at a subsidized rate and on actual consumption against a fixed load.

* SGST is requested to be waived off till the time the situation becomes normal.

* A state bailout package for protecting the jobs and paying salaries to the employees.

What is the roadmap that you suggest for the recovery of the travel and hospitality industries? Do please share some positive pointers for better times ahead.

The year 2020 will nonetheless be an extremely challenging year for the travel and Hospitality Industry but notwithstanding all these adversities, I am hopeful that the industry will bounce back. Though India has been impacted little less by COVID-19 outbreak, vis-à-vis other countries, but with the kind of populace we have the impact which is not that intense as of now may get aggravated unless concrete steps are taken. A gradual recovery in the business prospects may be expected from June-July onwards but the fact that success of Indian tourism is largely built upon its massive domestic demand gives us an edge in comparisons to other countries where tourism growth is driven mostly by inbound travel. Regular organisations of the roadshows by state tourism boards across the country, outbound tour operator’s focus on domestic tourism and the advice from the Government to must-visit 15 tourist destinations in the country in three years by Indians are some of the initiatives that will certainly boost the travel & tourism industry post COVID – 19. The government in India is doing very fantastic work in dealing with this crisis and if things go as planned, we can expect a not so bad 2020. Anyways, let our mantra for this year be – Hope for the Best and Prepare for the Worst.