‘Collaborative efforts need of the hour’

At a time when the hospitality industry is on a recovery path, MP Bezbaruah, Secretary General, HAI, says that the industry and the government should come together to discuss, debate and devise safe ways for the future and facilitate the hospitality industry to grow to its full potential and contribute to inclusive growth.

Nisha Verma

Hotel Association of India (HAI) has been engaging with the government at various levels. MP Bezbaruah, Secretary General, HAI, said, “HAI has always emphasised the importance of collaborative partnership with the government. Considering the well-recognised and very important role that the industry plays in employment creation and boosting inclusive growth, we have focused on policy formulations that will promote the growth and development of hotels in the long run.”

He added that two key interventions can help the industry. “According to hotels, the status of an ‘Infrastructure Industry’ and allowing hotels to avail the benefits currently available for the industry. Securing infrastructure status would facilitate soft financing of hotels, reducing their gestation period making hotel investments more attractive. This will open up vast opportunities for the sector to provide employment to a wide spectrum of job seekers from the unskilled to the specialised, even in the remote parts of the country,” he claimed.

Similarly, the benefits of industry like lower utility tariffs, property tax and licence fees will reduce the fixed operational costs of hotels and allow them to use surpluses generated for ploughing back into the business. Both have been long-standing demands of the sector.

Pushing for infra status

Bezbaruah revealed that HAI has recently had some engaging interactions on the demand of ‘Infrastructure status’. “The demand has been captured and recommended by the MOT in the draft document of National Tourism Policy. It may be pertinent to mention here that in its 295th report titled ‘Potential of Tourist Spots in the country – Connectivity and Outreach’ placed before both the houses on 27 July 2021, the Department-related Parliamentary Standing Committee on Transport, Tourism and Culture, observes that the hospitality industry is in huge distress under the impact of the pandemic and is looking at mass unemployment and pan India bankruptcies. The committee believes that there is an imperative need to accord infrastructure status to hotel projects with capex above `25 crore (excluding land) and include the same in the infrastructure lending list of the RBI. We are very hopeful of a positive development,” he emphasised.

Issues at hand

Commenting on other significant issues that impact the industry, he said, “Rationalisation of GST, shortage of skilled personnel, excessive and heavy licencing, cumbersome procedures for approvals of hotel projects, reduced reward point in of SEIS, DGFT guidelines for schemes such as EPCG that need to be reviewed in light of the unprecedented situation of nil to negligible foreign exchange earnings for hotels in the last couple of years. Due to the pandemic, the Government has done a lot of work in recent years on promoting ‘ease of doing business’. Bodies like RBI have recognised that the industry is amongst the most stressed and have included the sector in the ECLGS Scheme. The scheme has been extended in the Union Budget of 2022-23 and more funds have been made available to the sector under the scheme.”

He added that they will continue to pursue the issues at every level possible and work together with the government in creating a conducive environment for the industry to grow and flourish and continue to make sizeable contributions to the national economy in terms of GDP, jobs, inclusive growth and achieving all that in a sustainable manner benefitting communities at large.

ECLGS scheme

Bezbaruah shared that the Emergency Credit Line Guarantee Scheme (ECLGS), its recent extension up to March 2023 and earmarking of an additional `50,000 crore for hospitality and related sectors have all been welcome initiatives. “HAI has been requesting that the scheme should be customised and tailored to suit the unique hotel business model and future outlook for the sector,” he said.