The Rs. 1,000-crore turnover food and beverages segment of hotel business in Hyderabad has taken a massive hit due to the decision to pull out Rs. 500 and Rs. 1,000 out of circulation in the country.
“One segment of hotel business has taken a hit of between 50 and 60 per cent due to the demonetisation. We were moving towards a cashless economy with 30 to 40 per cent transactions being conducted through cards and apps. But now suddenly, the 60 to 70 per cent cash transactions have dried up. People are busy either factoring in how they will manage their finances with the currency they have, or are busy getting small change,” informs Ravish Dawey of Hotels and Restaurants Association of Telangana, the top industry body.
The current bout of unease in the restaurant industry might continue to have its impact into the next year with the liquidity crunch expected to ease only after two months.
“The food in the restaurant business is only one visible part. We have to source our vegetables, meat and other ingredients from the market. This is a cash only segment and those people in rural and semi-urban areas will be deeply affected in medium term as uptake declines,” says Mr. Dawey.
“Winter is the busiest season for us as there are many festivals and celebrations culminating in the New Year bash. This cash crunch where people are hunting for ATMs, change for Rs. 2000 and Rs 100 notes is going to impact all that,” says Mr Dawey.
“We are expecting a dip in revenue. We are still analysing the figures,” said an official of Commercial Tax Department.
“Our business is mostly card-based and has not seen much decrease. There has been negligible impact as our customer base has access to one card or the other. But wedding and catering businesses have had a big impact. Restaurants which do only cash billing have to rethink their business model now. Last Sunday, the most popular restaurant where you have to wait for half an hour to get a table was nearly empty. You can guess what impact it will have on the bottomline,” says the manager of fine dining restaurant in the city.
Not every segment of hotel industry has been affected. Segments where the cash component was high have been affected like the bar business is down, so is night club business.
Chef Mandar Sukhtankar
The Park
I don’t have hard cash. I don’t think I will be visiting a restaurant anytime soon. The first thing I want to do is visit a bank and withdraw some money which I can use for my transport.
Divya Bolisetti
IT employee
