New rules are catastrophe 2.0 for our industry: Pradeep Shetty

After new restrictions were imposed on Sunday to control the second wave of Covid-19, Pradeep Shetty, joint secretary of the Federation of Hotels and Restaurants Association of India, tells The Indian Express about the challenges faced by the industry.

After new restrictions were imposed on Sunday to control the second wave of Covid-19, Pradeep Shetty, joint secretary of the Federation of Hotels and Restaurants Association of India, tells The Indian Express about the challenges faced by the industry.

In monetary terms, how big is the food and beverage sector in Mumbai and how many people does it employ?

It is an industry worth approximately Rs 103 crore. It employs 2 lakh people in the city, largely from the unorganised sector.

How badly has Covid-19 hit the sector?

The pandemic’s impact on the hospitality industry has been extremely disruptive. As of today, 30 percent of hotels and restaurants in the country have shut down permanently due to financial loss. Over 20 percent of such facilities haven’t opened fully after the lockdown eased. The rest continues to run with losses and revenues below 50 percent of the pre-Covid level.

In Maharashtra, restaurants remained closed for seven months last year, with virtually no support from the government in terms of stimulus. Of 2 lakh employees in the sector, 40 per cent faced job loss. The figure is still increasing.

What steps are expected from the state to revive the sector?

Granting industry status and offering relief in terms of waiver of statutory payments could be a great help during these tough times. Though the Central government claimed to have provided relief packages to the sector through various ministries and RBI, the relief was inadequate and plagued by lack of implementation, especially on the part of banks. The government failed to acknowledge the fact that the hospitality industry is one of the major contributors to the country’s GDP and its earnings were hugely impacted due to the pandemic.

What is the foreseeable future of the sector amid the new lockdown rules announced on Sunday by the state government?

Imposition of mandatory RT-PCR test/night curfews by the governments of Maharashtra, Gujarat, Punjab, Chhattisgarh and Madhya Pradesh has brought the sector to its knees. Due to the prevailing restrictions and work from home arrangements, we see no significant business, but only closure of facilities in these states. In Maharashtra, it is almost another lockdown for us. Ninety percent of our revenue comes from being open at dinner time. At present, day time/lunch time earnings are very low due to work from home trend and general sentiment of spending less among people.

Have you asked for a relief package from the government?

We have requested for restoration of timings to at least 11 pm; otherwise the industry will be destroyed irretrievably. The new order will make the sector’s revival an impossible task. No significant business takes place in restaurants during day time; rather it starts after 8 pm. Also, tourism and hospitality account for close to 10 percent of India’s GDP and support millions of people. We anticipate that we will face extinction if this curfew continues beyond April 15.

The new guidelines simply underscore the fact that restaurants may not open at all. Also, 70 percent of the work force in the organised and unorganised sector is migrants. Like last year, the new restrictions will affect their lives again. This is catastrophe 2.0 for our industry after an appalling 2020.

Chief Minister Uddhav Thackeray asked for suggestions to tackle the situation in case we do not want a total lockdown. What would you suggest?

Restaurants must be allowed to operate till 11 pm under the SOPs released by the state. The association will advise its members to self-regulate the compliance of protocols. Restaurants assumed to be Covid-19 super spreaders are a myth and it must be corrected.

Eateries were allowed to open in October 2020 and things looked pretty good until February when trains and other public transports resumed functioning. We managed to cover our maintenance cost and pay salaries to our employees. But this disruption will be another huge blow to our livelihoods. We need support for owners and employees and their families.

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