10pc of Bengaluru hotels on sale, monthly loss of 500 Cr renders 1.25 workers jobless

The lockdown has unleashed a jolt to the several sectors thereby crippling the already looming economy. The hotel industry sector in Karnataka says even after Unlock, only 20-30 percent hotels in the state have opened up.

10 per cent of the 21,000 restaurants in Bengaluru have been put on sale.

President of Bruhat Bangalore Hotels’ Association, P.C. Rao said that during the lockdown a few restaurants were open for takeaways but stated that it was hardly any business at all.

“40 per cent of the hotels have not opened up even now. The hotels that are open have zero occupancy and only a few have 5-10 per cent occupancy. One of the major reasons is that the bachelors and the employees of IT/BT industries who were regular visitors to the restaurants and hotels have moved out of the city,” he told the Deccan Chronicle.

Offering his insights, Rao said that a few fine dining restaurants that have weekend business are also hit due to lack of customers on Friday, Saturday and Sunday.  “There are no banquet parties now. Earlier 80% of the people in Bengaluru used to visit hotels at least once a day. More than 1.25 lakh people employed in our industry have lost their jobs. The industry is making a loss of Rs 500 crore approximately every month,” he said.

At a time when the industry is worst hit, the demand from the owners of hotels and restaurants is that the rent of buildings should be reduced.

“The GST rate for rentals should also be reduced from 18 percent to 12 percent. The Employees Provident Fund (EPF) relaxation period should be till March 2021. The bars and restaurants have not opened up even now but we are still paying Rs 75.000 for excise licenses. We want a waiver on that for the next four months. Apart from that we pay Rs 40,000 fixed electricity charges and the state government has not considered anything till now. We have been supporting the government by tying up with hospitals so that the hotels can be used as Covid Care Centres for asymptomatic patients,” Rao explained.

The situation is grim across the state.
Former president of Karnataka Hotel Owners' Association and Hotelier M Rajendra said that the industry is unable to pay electricity bills and is running the business by borrowing money.

He stated that due to the piling up of debts most of the hotels in the state will shut down. "We want the government to waive off the interest and put a moratorium on the principal amount for a year. We can pay the principal amount after a year. Otherwise most of the hoteliers will be compelled to lose their outlets. Even if the banks attach hotels for non payment of loans, there will be no buyers," he said.

Rajendra opined that in future, only those who are financially stable will last in the hotel business as "in the next one year we will not be able to do business".