Second wave of COVID-19 makes recovery tougher for hospitality sector in Karnataka

Mysuru Palace. In Mysuru, hotels and restaurants largely depend on tourists who have not been turning up since last year amidst the COVID-19 pandemic and lockdowns, and there is no hope of recovery with experts warning of a third wave.   | Photo Credit: M A Sriram

Hit hard by the COVID-19 pandemic for the second successive year, the crisis-hit hotel industry is impatiently looking to the Karnataka government for some relief akin to the package announced by Gujarat, which has reportedly waived off property tax and fixed charge on electricity bills for one year.

Several hoteliers are planning to shut down their establishments as they are unable to run the business with zero revenue due to the pandemic-induced lockdowns. Domestic tourism nosedived during the lockdowns.

Stakeholders said the hotel industry did not get any financial aid from the Karnataka government during the first wave of COVID-19 despite repeated appeals. During the second wave, hotels and restaurants were closed for over two months. They argue that revival appears tough without the government’s support.

In Mysuru, hotels and restaurants largely depend on tourism. The tourism sector has been in trouble since last year amidst the COVID-19 pandemic, and there is no hope of recovery with experts warning of a third wave.

Mysuru Hotel Owners’ Association President C. Narayanagowda said, “So far, there has been zero relief to the hotel sector barring some relief given for paying the excise licence renewal fee. Yet, the industry has pinned hopes on the government. We are offering takeaways and home delivery amidst difficulties and losses. What we are asking is some support like other sectors have been getting. However, the response so far from the government has been half-hearted.”

Nearly 50% of the hotels and restaurants in Mysuru are operated from rented premises. With owners refusing to waive off rent this year, hoteliers are gradually vacating the premises.

“The industry is dying, and many may not resume their businesses even after the curbs are lifted, as they are facing serious liquidity crisis with no money to pay salaries of staff,” says Mr. Narayanagowda.

Around 9,500 rooms are estimated to be lying vacant in Mysuru city.

The scenario in Kodagu is no different. The industry has been encountering headwind since 2018 with tourism badly hit on account of floods and landslides.

B.R. Nagendra Prasad, President, Kodagu Hotels, Restaurants, and Resorts Association, says, “When MSMEs can get relief, why not the hotel industry which has suffered huge losses, especially in Kodagu with continuous calamities?”

The industry could breathe easier if the Karnataka government waives off statutory taxes and announces incentives. “The Gujarat model can be replicated in Karnataka to save the ailing hospitality sector,” he says.

Families banking on tourism revenue for their livelihood are in debt. As many as 5,500 hotel rooms and 25,000 rooms in homestays in the district are vacant.

The monthly fixed charge on electricity bills of some big hotels is in the range of ₹2.5 lakh to ₹3 lakh. A person running a budget hotel needs at least ₹40,000 for maintenance. “With zero business, how can we pay the fixed charge on the electricity bills and taxes,” he says.

The crisis has forced many businesses to sell off their properties. But, there are not many takers. To capitalise on the situation, buyers have resorted to hard bargaining.

Amidst the crisis, some hoteliers have been providing financial help to their workforce, who are mostly from other States, so that they return to work immediately after the curbs are lifted.

Mr. Prasad said, “But, I don’t think the industry can make a quick recovery owing to the persisting problems and uncertainties amid the scare of a third wave.”

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Printable version | Aug 4, 2021 5:53:41 AM | https://www.thehindu.com/news/national/karnataka/second-wave-of-covid-19-makes-recovery-tougher-for-hospitality-sector-in-karnataka/article34839853.ece

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