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Indian hospitality left reeling after government stimulus package disappoints [Infographic]

by | 02 Jun 2020 | News

 India’s hospitality market seems to have been left to fend for itself during Covid19. (Photo from Unsplash by Koushik Chowdavarapu)

Leading figures in Indian hospitality have expressed shock as the government’s US$226 billion stimulus package seems to offer them little in the way of support. 

As soon as the Indian government announced details of its Covid19 stimulus package, the country’s hospitality and tourism sector fell into stunned disbelief.

The reason: it quickly became obvious that the Atmanirbhar Bharat Abhiyan package (or Self-Reliant India Mission) would not bring the industry the much-needed financial support its leaders have been asking for over recent weeks.

A strange omission

Many feel that the stimulus package has left India’s hospitality and tourism industry having to cope with the extraordinary fallout from the crisis on its own. As one of the hardest-hit sectors, its leaders are now struggling to come to terms with what they see as a complete lack of support from politicians.

This feels especially surprising given that the industry’s direct and indirect economic contribution amounts to an estimated 10% of India’s GDP, according to Aashish Gupta, CEO of the Federation of Associations in Indian Tourism and Hospitality.

“The Indian government’s attitude towards tourism and hospitality is a shameful neglect,” said Manav Thandani, founder and chairman of Hotelivate and co-founder and director of SAMHI, a hotel investment and development firm.

“In the next 2-3 months, half the restaurants will shut [and] a quarter of the employees in airlines and hotels will have no jobs. Today, the slogan for all of us is no longer ‘Incredible India’, but it has become ‘Incredibly Disappointing’’. Altogether a sad week for Indian tourism.”

Mounting pressure on the hospitality sector

Had lockdowns and travel restrictions been loosened, the blow of not being included in the government aid package might have been considerably softer for the sector.

But with all domestic and international air travel remaining banned until the end of the month, and hotels and restaurants having to stay closed until further notice, the risk of cash-flows drying up looms ever larger. Mass layoffs feel like the inevitable result.

Mandeep Lamba, South Asia president for HVS Anarock, a global hospitality consultancy, estimates that 20 million jobs could be lost due to a lack of government support. And more broadly, the fact that funds are instead being pumped into space exploration leaves him doubting the nation’s priorities.

Looking to the future

While the government’s announcement has left many in India’s hotel and tourism sector fearing for the future, industry leaders are continuing to lobby for more support.

Sanjay Sethi, managing director and CEO of Chalet Hotels and a member of industry bodies FICCI and CII, suggests hotel chains must look to states for relief on property taxes, excise fee waivers, electricity tariffs and labour laws.

Finally, Vikram Cotah, chief operating officer of GRT Hotels, has offered some words of encouragement to those working in the industry. “Don’t give up hope – reskill yourselves and be ready,” he advised. “We went through several disasters and we as Indians will triumph again, especially with our special hospitality quotient which is needed in every industry including aerospace, coal mining and defence, all of which received an economic stimulus.”

According to the TOPHOTELCONSTRUCTION online database, 144 hotel projects are currently in the pipeline in India:

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