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FHRAI requests an extension of moratorium by 3 months

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The FHRAI has requested the Finance Ministry for an extension of moratorium which could help hotels restructure existing loans since the process of is time consuming

By Puja Gupta

August 26, 2020 (IANSlife) The Federation of Hotel & Restaurant Associations of India (FHRAI) has made a written representations to Finance Minister Nirmala Sitharaman, Minister of State for Finance Anurag Singh Thakur and to RBI Governor Shaktikanta Das, requesting for an extension of moratorium for an additional three months. 

The hotel industry has made no progress in terms of bookings even after several states have resumed normalcy or 'Unlocked' and allowed hotels to resume operations. The industry has registered average occupancy levels at 10 to 20 per cent. With rental and salary bills, statutory payments and other establishment costs, hotels are finding it unviable and difficult to carry on running the businesses. 

The FHRAI has informed the Ministry that an extension of moratorium at this time could help hotels restructure existing loans since the process of restructuring is time consuming.

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Gurbaxish Singh Kohli, Vice President, FHRAI & President, Hotel and Restaurant Association of Western India (HRAWI) said in a statement: “The industry is going through its toughest time. For more than four months, hotels and restaurants have remained shut and have earned no revenue throughout the lockdown. There is no improvement in forward bookings and wherever hotels and restaurants have opened, the footfalls are negligible. In addition to the monthly outgoings and the statutory levies, we now have to spend more on employing hygiene and safety measures to follow the SOPs and guidelines issued by the central and state governments. On account of all this, the debt restructuring plan announced by the RBI for the stressed MSMEs is not going to help the hospitality sector, therefore we have urged that the moratorium be extended by a further three months.” 

The Indian hospitality industry has continued to report zero revenues since the lockdown came into effect back in March 2020. Even post unlock, in the states where hotels have resumed operations, there is very little movement.
 

Pradeep Shetty, Jt. Hon Secretary, FHRAI & Vice President, HRAWI
Pradeep Shetty, Jt. Hon Secretary, FHRAI & Vice President, HRAWI

 

Pradeep Shetty, Jt. Hon Secretary, FHRAI & Vice President, HRAWI, said: “Many of our members including both hotels and restaurants are at a stage of bankruptcy and quite a few have already filed for it. 90 per cent of the hospitality sector will not be able to avail the debt restructuring plan due to insufficient time at their disposal and other varied reasons. These eventually will be declared NPAs post 31st August 2020. The debt restructuring plan will provide a window for the banks to undertake coercive action against the borrowers whose repayments are pending. With this and the future of the Hospitality sector in mind, we urge the Government to consider the extension of moratorium for another three months. This might just save the Indian Hospitality Industry from an imminent collapse.”

 


 

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