Hotels' body seeks liquidity support amid 2nd wave of Covid

Source :IANS
Author :IANS
Last Updated: Tue, May 4th, 2021, 11:08:29hrs
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Hotel Restaurant

Mumbai: As the severe Covid crisis and the resultant lockdowns have again brought the travel and hospitality industry to a halt, the Hotel Association of India (HAI) has written to the Central government seeking liquidity support in the form of lower interest rate and further customisation in the Emergency Credit Line Guarantee Scheme (ECLGS).

The industry body has also sought a complete or partial waiver of statutory expenses like property tax, lease rentals, license fee, and excise fee payable by hotels to various government authorities.

HAI noted that the second wave of the pandemic has stopped the recovery of the hospitality and tourism sector. Hotels in India, which were shut for nearly 6-8 months reopened in a staggered manner and were recovering somewhat on the strength of domestic leisure tourism and weddings and family get-togethers, only to be impacted yet again on account of lockdowns in some states, night and weekend curfews, reduced limits on the number of guests allowed for functions and other restrictions, it said.

In its submissions to the Finance Ministry, the industry body said the ECLGS 3.0 should be further customised wherein the scheme factors in aspects such as high percentage of fixed costs of operations for hotels, and the possibility of long-drawn recovery of the industry.

Inclusion of State Financial Corporations, Asset Reconstructions Companies (ARCs) and Debt Funds, extension of moratorium, capping of interest rate at 8 percent, increasing of the delinquency period are some of the suggested customisations, HAI said.

In addition, the association has requested that hotels with no borrowings should also be eligible for ECLGS 3.0 as these too are facing a severe liquidity crunch. HAI has highlighted that while ECLGS 3.0 offers liquidity to pay interest obligations, it does not help businesses to survive. Interest subvention and a longer payback period can provide both liquidity and relief, it said.
 

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