Restaurant and hotel business takes a hit after 50% occupancy norm unlocks

When businesses were opening up, life was getting back to normal and hospitality industry was hoping to bounce back big, Maharashtra Government imposed 50% seating capacity till 10 pm in hotels and restaurants on 10 Jan. The restrictions came in the wake of the steep rise in cases of COVID-19 and its Omicron variant across the city.

Hotels and restaurant associations welcomed the move when Maharashtra government extended the timings of restaurants and eateries till midnight. Hotels and restaurants were seeking relief and were in the high hope of a “return to normal” in 2022. But the new restriction puffed their plan.

“If the current restrictions continue, restaurant or bar owner won’t be able afford to pay for rent, taxes and salaries of employees unless his or her business is running at full capacity” said Saji Thomas who runs Delight restaurant in Thane.

“Although the delivery and takeaways are allowed, they cannot cover even cover the daily expenses and will have to cut the staffs to manage the expenses. The third wave will unfortunately hit business hotels more, similar to the pattern seen last year.” he added. The owners are anticipating a very challenging days ahead.

According to industry body Federation of Hotel & Restaurant Associations of India (FHRAI), already 25 to 30 per cent of establishments in the organised sector comprising around 60,000 hotels and 500,000 restaurants have already shut shop and another 15 per cent could follow suit if there is no impetus from the government to revive the sector.

The hospitality sector has been receiving repeated shocks since the pandemic. They have not been able to recover since pandemic. The sector needs government intervention for a setback. The industry body, Hotel Association of India on Monday said it has asked the government to consider granting infrastructure status to hotels, extend moratorium on loans and rationalise taxes. This step will also help survive operationally and encourage investments in the sector.

Hospitality industry contributes 9 per cent to India’s GDP employing nearly 4.5 crore people and providing livelihoods to around 16 crore people. 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, HAI said. Amidst all these, the hospitality industry is desperately hoping for a light and that there is no 3rd wave.

Mumbai on Tuesday reported 11,647 new COVID-19 cases, a drop of 2,001 from the previous day and fourth straight day of downward trend, taking the tally to 9,39,867, while two more patients succumbed to the infection.