No relief, no survival for hotels

JK Mohanty, Chairman and Managing Director, Swosti Group, claims that there is a need for the state government to incentivise the setting up of hotel infrastructure in Odisha so that it is on a par with other states. He even urges the Central government to look at a change in policy that offers relief in taxation and duties.

JK Mohanty says that they have already been in touch with the government at all levels to represent the plight of the hospitality sector. “On behalf of the hotel industry and the tourism sector, we are continuously interacting and following up with both Central and state governments, highlighting various issues that are being faced by the hotel industry in the pandemic. Although both governments are extending some relaxation in terms of EMI payments to banks, bar licence fee, etc., we are hopeful that the government would declare a good relief package for the hotel industry and its survival,” he says.

On their part, while Swosti Group hasn’t done any business during the pandemic, it has constantly engaged with clients and maintained hygiene standards at all properties which, he believes, is one of the most important factors for the hotel industry today. “We are seriously following and adopting all the recommendations and guidelines of the Ministry of Health & Family Welfare and the state government, and all our team members and staff are also adhering to these guidelines and hygiene protocols,” he says.

However, adds Mohanty, like every other hotel in the country, Swosti Group is also going through a very bad phase with zero occupancy and zero income since the end of March 2020. “All our hotels and resorts have been closed. During this period, the hotel industry is facing serious problems in paying salaries and wages, ESIC, bank loans, interest, overdrafts, holding tax, bar licence fee, electricity fee, ground water fee etc.,” he says. Mohanty also believes that although domestic tourism flows have been severely affected by restrictions on the movement of people, they are expected to recover more quickly once the lockdown is completely lifted. “The most important thing now is to focus on the vast potential of domestic tourism with a vigorous marketing plan,” he shares.

Demands raised to government

• Deferment of bank loans and interest-free loans
• Restructuring of loan with outstanding of more than `25 crore
• Waiver of BMC holding tax
• Waiver of bar licence fee
• Exemption of ground water fee
• Waiver of minimum demand load of electricity and payment of electricity bill be allowed on actual demand load
• Financial assistance for payment of salary/wages, ESIC, etc
• Facility to avail sickness benefit of employees under ESIC
• Special relief package for industry revival

Recommendations to Odisha Govt

• Extend attractive incentives for people to invest in tourism infrastructure.
• Recognise the potential of star category hotels at important tourist locations other than Bhubaneswar and
  Puri to compete in the domestic segment.
• Allow 30% capital investment subsidy up to a maximum limit of `25 crore and 5% interest subsidy up to 11 years on repayment of term loans. If subsidy is given only for 3 years, many hotels will come up as required.
• Extend moratorium on payment of EMIs. Industry needs a minimum of one-year moratorium on all working capital, principal, interest payments, loans and overdrafts.
• Allow collateral and interest-free loan of up to 3 years for hotel industry.