Demonetisation: Hotel industry earnings drop by 50 per cent

Situation expected to remain the same till mid-December

The daily revenue of hotels and restaurants has dropped by 50 to 60 per cent post demonetisation in Mysuru.

Hit by currency crunch, the number of people going to restaurants has declined largely and the hotel industry here feels that the situation is unlikely to improve at least till mid-December.

Continual fall

The hospitality sector’s earning had seen a continual fall since September, barring a short period in October. Tourist footfall had seen a drastic decline in September following the Cauvery agitation. In that month, the revenue had fallen by more than 50 per cent with a fall in tourist arrivals, as protests had taken centre stage in the Bengaluru-Mysuru corridor.

The Cauvery row cast a shadow on the Dasara festivities in October, causing revenue loss to the sector with drop in tourists. Dasara is the time when the hospitality sector hopes to earn good revenue.

Mysuru Hotel Owners’ Association president Narayana Gowda told The Hindu that daily earnings of hotels, restaurants, sweet shops, and bakery sector had fallen from Rs. 1.5 crore to Rs. 60 lakh since demonetisation.

No dip in costs

Despite the fall in revenue, the costs involved in running hotels and restaurants has remained the same.

“We have no option but to meet the expenses despite the fall in our income,” Mr. Gowda explained. “How can a restaurant give change for Rs. 2,000 for a bill of Rs. 200,” he asked. Most restaurants have put up boards urging customers to cooperate with them and provide change.

“We cannot leave a customer because of change problem. How long can we give the reason of change problem since we are here to do business and earn our livelihood. We are doing our best to mobilise change to meet daily needs,” Mr. Gowda said. The association has resolved to pay salaries of workers in the industry in cheque to tide over the cash crisis.

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Printable version | Apr 3, 2020 1:35:06 AM | https://www.thehindu.com/news/national/karnataka/Demonetisation-Hotel-industry-earnings-drop-by-50-per-cent/article16725375.ece

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