FHRAI for the revival & growth of hospitality industry

New Delhi, May 21 The Federation of Hotel & Restaurant Associations of India (FHRAI), India's apex Hospitality Association and the industry's voice, recently met with G. Kishan Reddy, Hon'ble Union Minister for Tourism, Culture, and Development of the North-Eastern Region, and submitted a representation with suggestions for the revival and growth of the Hospitality industry.

Recommendations include making tourism a national priority sector, granting hospitality infrastructure status, improving credit facilities, providing subsidies and incentives, rationalising GST, continuing the EPCG scheme, enacting favourable liquor licence policies, and creating a platform similar to the Open Network for Digital Commerce (ONDC) for the hospitality industry, among other things. As part of the Azadi Ka Amrit Mahotsav celebrations, FHRAI and its Regional Associations have pledged their full support and proposed organising region-specific Food Festivals across the country with the Ministry of Tourism's assistance. FHRAI has also advised its hotel and restaurant members to display the Azadi Ka Amrit Mahotsav logo commemorating 75 years of independence in their establishments and on their stationery.

"With the pandemic restrictions being eased slowly across the country and man being a social animal, people are eager to get out and socialise. The future of culinary tourism is bright in India. People are very aware of the different cuisines and are ready to experiment with the variety to try out good food. It is the right time to take initiatives that can promote tourism in the country. To commemorate 75 years of Indian Independence, we are proposing that FHRAI and its Associations with the support of the Tourism Ministry would like to highlight and host 75 regional cuisines in each of the food festivals," says Gurbaxish Singh Kohli, Vice President, FHRAI.

"India's tourism sector is one of the largest service industries with 10.93 million Foreign Tourist Arrivals (FTAs) and US$30 billion Foreign Exchange Earnings in 2019. The sector has been adversely impacted by the pandemic in the last two years that affected roughly 60 to 70 per cent of its revenue. Tourism is one of the important sectors in the country that accounts for around 10 per cent of GDP and employs roughly 90 million people. The tourism and hospitality industry in India carries an extensive potential to be the key driver to accelerate socio-economic development of the country. To achieve this, tourism should be declared as a priority sector in the country with special incentives and benefit to help the sector to attain its true potential. India is one of the key tourist destinations in the South Asian region and hence, in a rapidly expanding tourism market of the region, it becomes even more important to bring out exclusive and exhaustive incentive and policy measures to make the sector more competitive," adds Gurbaxish Singh Kohli.

According to the Association, because hotels are capital intensive, they require large investments and have a long gestation period. Mid-market and budget hotel projects are built for less than Rs 200 crore and typically repay debts in 7 to 8 years. High bank interest rates, on the other hand, discourage investment in the sector.

"RBI had recognised hotels as a sub-sector of Social Infrastructure. The infrastructure status was granted to hotel projects above Rs 200 crore. This threshold has to be brought down to Rs 10 crore per hotel to give fillip to budget segment hotels. Granting of infrastructure status will allow hotels to avail term loans with longer repayment schedule of 15 or even 25 years like other sectors such as road, railways and ports, and also make statutory utilities like electricity available to the sector at industrial rates instead of the commercial rates," says Pradeep Shetty, Jt. Hon. Secretary, FHRAI.

According to an ICRA report, 74 per cent of hospitality companies have negative credit profiles and are at risk of being downgraded as a result of the COVID-19 pandemic.

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