Business Tycoons - Hospitality Industry

The hospitality sector is a part of the service industry that thrives on serving customers through restaurants, hotels, catering services, bars and cafés, tea and coffee shops, etc. This sector provides a wide range of services like accommodation, dining, lodging, event planning, theme parks, and transportation facilities.

The hospitality industry was severely hit due the ongoing COVID pandemic and has run into huge losses due to restaurants and other hospitality services being shut down due to nationwide lockdown. The reasons for their losses is quite obvious like lack of customers in restaurants due to social distancing, understaffed restaurants which is resulting in increased workload on a few number of people.

Many employees of the hospitality sector have even lost their jobs due to the layoffs done by the hotels to cut down on their cost. This has severely hit the tourism sector as well because travel to new places has been restricted by the Government.

Some Important Updates on Hospitality Sector:

As said earlier, the hospitality industry is among the most severely affected by the COVID-19 pandemic. With the Government cancelling all domestic and international flights, the hotel accommodations and restaurants have been negatively affected. And while there are high chances of infection, it is safe to say that the hospitality sector will not come into full-fledged operations anytime soon.

According to McKinsey & Company, the hospitality industry’s recovery to pre-COVID levels “could take until 2023 or later.” The reason for this is that the hospitality sector is underperforming due to inability to generate profits during this period of time. Some other hoteliers say that this sector will not come into action until October 2020.

Also, the lockdown will not be fully lifted before October 2020 which unfortunately coincides with an off-season for restaurants and hotels. Hence, it is only after November 2020 that the industry can hope for any cash inflows.

According to Sarbendra Sarkar, Founder Managing Director, Cygnett Hotels and Resorts, their hotels experienced about 90% booking cancellations and new reservations do not look good either.

Government Initiatives:

However, the Government of India has introduced different schemes and various budget allocations to help the tourism and hospitality industry. One of these schemes is injecting INR 2,500 crores into the tourism and hospitality sector for the financial year 2020-21. The previous budget figures were INR 2,189 crores.

It also proposed 100 more airports by 2024 under the subsidized UDAN scheme and also urged to introduce more Tejas trains from five iconic destinations.

The budget has also allocated a budget of INR 3150 crores to the Ministry of Culture to raise more awareness among the youth about the history and culture of India.

An institute will also be set up which will be the first Indian Institute of Heritage and Conservation which will be known as a deemed university. It will be operated by the Ministry of Culture.

However, the industry is still hopeful about its future as there are talks going on to open restaurants at 33% occupancy. Hence, it hopes to start its operations soon.