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Hotel Association of India writes to PM Modi; requests a 5-point revival plan for the industry

The Hotel Association of India (HAI) has written to India’s Prime Minister Narendra Modi, not just highlighting the impact of COVID-19 on the beleaguered Indian hospitality industry, but requesting for urgent relief measures. In a letter written to the prime minister on March 30, 2020, HAI states they are standing united in their fight against COVID-19 “and has deep appreciation and support for all the initiatives taken by the government”. All HAI member hotels across the vast swathe of the country are following the protocols as laid out by ICMR and the government, by ensuring complete sanitization and exclusive accommodation blocks in their hotels, with hygienic meals for all incoming domestic and foreign tourists and travellers, besides local state authorities. They have also taken the onus to provide “hygienic food packets for distribution to the poor and needy as required”. However, with no air or road traffic, empty hotels, and all restaurants and recreational facilities shut, “the likelihood of the revival in the short term is uncertain,” states the letter to the prime minister. “The hotel industry is a key pillar of both domestic and international tourism. Globally, it is considered as a major contributor to GDP, foreign exchange earnings, creation of jobs as well as the biggest multiplicator of jobs. In India especially, the hotel industry is a key driver of jobs especially through 90% of its inventory which is in the economy, budget or mid-market hotels. In the current scenario, almost 70% of the jobs are in danger directly within the hotel sector and several in other hotel related support sectors.” HAI’s letter to the PM requesting for help and a revival package can be viewed in the light of the above situation, given the number of people it employs and the impact any job loss would cause on India’s unemployment figures. In the letter HAI requests for 5-point relief measures, which “are practical and could help the industry to both survive and revive”. The Top 5 revival plan: • The deferment of all statutory liabilities, including EMIs, to a minimum of 12 months at the centre, state and municipal levels. • Subsidise employment for three months by the government, contributing 50% of the salary per employee. • Lease, license, rentals and excise fees, as well as property taxes should be suspended effective 11th March, till the end of COVID-19 period. • Enable GST collected to be used as working capital for six months. • Utility costs such as electricity to be charged on actuals versus the load. The sheer size and potential of the hospitality industry: To put things in perspective: Industry body Confederation of Indian Industry (CII) has stated that more than half of the tourism and hospitality industry can go sick with a possible loss of over 20 million jobs across both industries if the recovery in the industry stretches beyond October 2020. HAI itself, in its ‘Mitigating the Impact of COVID-19’ report, predicts about 5.7 million jobs just in the hospitality sector. The report states that India’s hospitality industry size in FY2018/19 was US$247bn, it contributed 9.2% to the GDP, had a CAGR of 8.5% from FY 10-18, employed 43 million people and reported forex earnings of US$29billion, the third-largest foreign exchange earner in the country. The report talks about the huge potential of the Indian travel and tourism industries. Stimulus packages and support could help unlock the huge population, predicted to grow to the tune of $250bn by 2030. It predicts $96bn is the direct spend on tourism such as F&B, accommodation, travel (air & road), recreation and shopping; the incremental potential is driven majorly by international tourism (assuming India attracts 2.5% of the world’s international tourists, up from 1.4% in FY19); and travel and tourism estimated to be 11% of GDP. The other significant figures about how the industry supports India’s vast middle class the most to bolster their request: 87% of hotels fall within the categories of unbranded and alternate accommodation, including guesthouses, homestays, etc, while the mid-market enjoys a 19% market share, and budget about 16%, with luxury just enjoying a 12% market share and Upper Upscale and Upscale about 29%. What other countries are doing: Across the world, the hospitality and travel and tourism industries are considered the backbone of the global economy, creating 10% of total global employment and 1 out of 5 of all new jobs in the last five years. They are expected to create 100mn new jobs in the next ten years and contribute 10.4% of the world GDP. They have the potential of becoming a $13 trillion industry by 2029. In a bid to drive home the need for help and support from the Indian government, HAI’s report makes some pertinent points: • International travel could be adversely impacted by up to 25% in 2020, which equals to almost three months of travel. • As per IATA, global airlines would need US$200bn emergency funds. • As per WTTC, the pandemic would lead to 50million jobs being slashes, a 14% reduction in travel and tourism jobs. • The industry could take almost 10 months to recover after the lockdown is withdrawn and the outbreak is over. • There is very little chance of revival of inbound travel, while corporate travel business could be delayed due to travel bans. Hotels, which are a capital intensive business, will face the biggest brunt with high-fixed costs such as license and lease fees, salaries, etc. • The impact of the bank, according to the HAI report: potential loss of 5.7 million jobs; drop in occupancy levels to 15-20%; potential revenue loss of US$10 billion; revenue pick-up down by 50%, and high risk of bankruptcy. The report also has references to the stimulus packages offered by other governments: While the US has pledged almost $2000 billion, China has pledged $182 billion, Germany $170 billion, Australia $117 billion, Canada $97 billion, Malaysia $57 billion, UK $50 billion, Singapore $34 billion, Singapore $25 billion, India $23 billion and Indonesia $2 billion. The report talks about how major central banks have front-loaded rate cuts to make capital cheaper: the US has brought the rates down from 1.75 to 0.25%, Bank of India from 0.75 to 0.10%, People Bank of China from 4.15 to 4.05, Reserve Bank of Australia from 0.75 to 0.25% and BoK from 1.25 to 0.75%. Also mentioned is RBI, which has dropped rates from 0.75 to 0.25%. Among the stimulus packages offered by the different countries, to the economy in particular, and in some cases to hotels in particular: • Canada has offered a Liquidity Program Options for hotels, offering deferred income tax payments for six-month payment mortgages, US$55bn in temporary tax relief, and working capital loans of up to US$2. Hotels also qualify for up to $100k, 10% wage subsidy program for small business employers, and emergency support program of up to $5 billion in support to workers who are not eligible for EI. • Scotland has offered 75% rates relief for retail, hospitality and leisure sectors (rateable value up to £69,000). • Brazil’s Ministry of Tourism has offered US$80 mn financial support and reduction of interest rate by 2%. • Malta has offered a moratorium on loan repayments to the hospitality industry. • The UK has promised a 12-month business rates holiday, funding of £25000 for businesses with property, with a rateable value of £51,000, statutory Sick Pay Relief Package for SMEs, and a Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs. • HongKong’s US$700mn package for HKG Tourism Board offers subsidies to travel agents and tourism promotion plans. • Singapore has waived license/leasehold fees for hotels for the rest of the year. Travel agents and tourist guides will not need to pay to renew their licenses/leases. It has set up a Tourism Recovery Action Task Force. The Skills Future Singapore and government will co-fund 75% of wages. • Malaysia’s US$ 0.8 million and Philippines US$118 mn economic tourism packages would help spur tourism. • Indonesia has announced a US$8bn stimulus package and US$725mn incentive for consumer spending and the country’s tourism sector. • Thailand’s tax measures include an extension of the filing of tax returns and reduction of the policy rate by 0.25%, supporting charter flights for high-spending tourists. • Australia has extended $1 bn support to sectors impacted worst, including tourism. It includes a waiver of fees for tourism operating in certain areas, targeted measures to promote domestic tourism and a US$430 mn aid, package comprising refunds and forward waivers, on fuel taxes and domestic air navigation. Shoring up against the economic shock: Given the threats that the hotel and travel industries are facing due to the COVID-19 pandemic and the huge potential the industries offer for growth and employment, HAI has stated, in the letter to the prime minister, that the “potential shock to the livelihood of millions working in our industry is enormous and we will need to think in terms of forming a task force together with the industry and the government to establish a path for normalcy in general and build confidence in this industry in particular”. HAI is an industry body, with Mr PRS Oberoi, Executive Chairman, EIH Ltd. as founder-chairman, Puneet Chhatwal, MD&CEO, IHCL as President, KB Kachru, Chairman Emeritus & Principal Advisor – South Asia of Radisson Hotel Group as the body’s VP and Fellow Member, and other hoteliers such as Patu Keswani, Chairman & MD, Lemon Tree Hotels as Treasurer and corporate member.

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Deutsche Bank Suggests Travel with ‘Health Certificate’ Could Help Tourism

In efforts to keep the travel and tourism sector above water after the coronavirus pandemic subsides, Deutsche Bank suggests a number of actions to ensure a balance between health risks, economic damage control and travel. One proposed action sees vacationers presenting special medical or immunity certificates to the destinations they visit. According to the Deutsche Bank study, tourism makes a significant contribution GDP in many Mediterranean countries – in Italy and Spain above 13 percent in 2018 and in Greece at a 20.6 percent share. near to impossible and impacting all forms of business linked to tourism. Mostly impacted are traditional tourist destinations particularly in the Mediterranean, which stand to suffer major economic losses particularly as the progression of the pandemic is highly unclear. Measures destinations could take Bank analysts expect the main holiday season in the northern hemisphere to begin in about three months. At the current moment, tourism sector stakeholders and local administrations at tourist destinations can begin to take measures which may help holidaymakers travel at acceptable risks even during coronavirus times. One measure suggested by Deutsche Bank is for vacationers to present special medical or immunity certificates to confirm that they do not pose a renewed risk at the destinations. This option is currently being examined by a number of countries, with Austria, Thailand, and France already requiring these documents upon arrival. Other proposed measures by Deutsche Bank, include canceling mass events; stocking up on disinfectants and trying to ensure an adequate distance between guests; restricting access to certain tourist attractions; and capping the number of visitors by capacity regulation. Analysts go on to note that these steps may increase holidaymakers’ willingness to visit areas which are currently hit hard by the virus.

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Domestic Tourism will be Key to Boosting the Travel Industry, Post Lockdown

“The travel and tourism industry, one of the global growth engines, is bearing the brunt of the coronavirus pandemic's damage. To revive the industry, recovery of domestic travel businesses should be the first step,” said Jane Sun, Trip.com Group CEO. She was talking to CGTN (part of China Global Television Network) as people to China look forward to travelling after months in strict confinement. Trip.com Group is the largest online travel agency in China and is said to be one of the largest travel service providers in the world. According to media reports, the company’s chairman, James Liang, is set to commence on a tour promoting domestic travel as the Chinese government scales back the containment measures, including lockdown, which were implemented CGTN reported on April 3 that Trip.com Group enjoyed surging growth in 2019 but projected a sharp decline of up to 50 percent for its revenue in the first quarter of this year due to the pandemic. "In the first quarter, January was very strong, but February and March were almost zero. When we look back, we experienced the darkest moment of the travel industry," Sun recalled during her interview with CGTN. Talking to CNBC, Sun said she was hopeful her company could forge the path to recovery for one of the industries hardest hit by the coronavirus pandemic. “We saw the climb for the travel volume to be up within China, so we’re confident that within a couple of months domestic travel in China will be recovered,” said Sun. According to media reports, multiple tourist attractions in China welcomed massive crowds during the three-day Qingming Festival holiday which began on Saturday. During her media interviews, Sun said that initially people will be concerned about travelling but in the long run ‘the impact of the epidemic on travel will be very small’. “I'm positive that eventually, the whole world will be able to fall out from this crisis mode, moving to a positive zone," she said. According to the World Travel & Tourism Council (WTTC), the travel and tourism sector accounts for 10 percent of total jobs and GDP globally. That's an estimated 8.8 trillion U.S. dollars annually. On April 3, WTTC said in a release that 75 million travel tourism jobs are at risk globally due to COVID-19 pandemic. On April 3, India’s Union Ministry of Tourism held a virtual conference with the industry associations of tourism and hospitality sector. Secretary Tourism Yogendra Tripathi along with senior officials of the ministry spoke to FAITH (Federation of Associations in Indian Tourism & Hospitality), as well as to representatives of CII, FICCI, PHDCCI and IMAI. The industry put forth a number of ideas and suggestions for tiding over the crisis created by COVID-19 in the sector of tourism and hospitality. Here too, the common takeaway was that a lot of thrust on promoting domestic tourism will be needed.

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A tunnel to make train travel coronavirus free

The Indian Railways has developed a disinfection tunnel to sanitise people. As per reports, the tunnel is made in-house by Central Railways. The disinfectant tunnel has been made in just two days at Loco shed at Bhusaval in Maharashtra. As per reports, the tunnel sprays sodium hypochlorite solution on people through nozzle sprayers that can disinfect a person fully from head to toe in just 3 seconds. The hugely beneficial tunnel has cost the Railways just about Rs 15,000, as per reports. Some claimed it took just Rs 10,000 to build it. The disinfection tunnel will work uninterrupted for 16 hours, hence requiring refilling only once a day, according to reports. This is the first time that such a tunnel is being used by Railway. The disinfectant tunnel has though been used by various hospitals and other authorities to sanitise people elsewhere in the country.

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HRAO urges FM for assistance to tourism, hospitality sector

Bhubaneswar: Hotel and restaurants association of Odisha has urged Union Finance Minister Nirmala Sitharaman for assistance to tourism and hospitality sector. In a letter, J K Mohanty, MHCIMA Chairman, Hotel & Restaurant Association of Odisha, has also urged Sitharaman to declare an economic trade and industrial revival package for COVID-19. The letter urged her to look at the global melt down of the economy, tourism in India which employs more than 4.2 crore jobs (8.1% of total employment in the country). This will be the worst hit due to coronavirus outbreak, it said. Mohanty in his letter said the countries like USA, UK, Singapore, New Zealand and Australia have given excellent revival packages for their economies. The hotel and restaurants association of Odisha said as the total country was under a lockdown period, the earning of tourism and hospitality sector is almost zero. Therefore, they request that the banks which are flushed with funds should share a part of the burden by exempting interest for six months. The letter further said industries, MSME sector, the banks should also share a part burden and charge 50% interest on term loan and working capital limits for a period of twelve months. The banks should not declare any account as NPA nor put the accounts under CIBIL, the letter added. On the ministry’s advise that all employers of Public / Private Establishments shall not to terminate their employees from job or reduce their wages, the letter said they appreciate this initiative. But, if there is no business, there is no earnings hence and we sincerely request the Ministry of Finance to reimburse salary / wages of employees at least for three months from EPF. The letter has requested the Finance Minister to consider a one year tax holiday for the hotel industry and waiver of property and municipality tax for six months. It also requested deferment of utility bills and waiver of electricity dues for a period of one year, license fee holiday for Excise and all other licenses applicable to the hotel industry for a period of one year. The HRAO has also written to Susant Singh, Minister- Labour & Employees State Insurance, Govt of Odisha requesting him for financial assistance to the Tourism and Hospitality sector of Odisha.

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OYO Rolls Out #FightCovidwithOYO Campaign With Donate A Night and Book A Night for Self-Isolation to Help Flatten the Curve

OYO, one of the world’s leading hotel chains today announced two initiatives- ‘Donate A Night’ and ‘Book A Night for self-isolation’ to support the Government of India in its efforts to break the chain, flatten the curve and maintain the necessary nationwide lockdown. First responders and medical professionals are working hard and spending long hours at the frontlines to protect citizens from this pandemic. They are also at the maximum risk of being exposed and contracting the virus. Besides first respondents, there are migrants who are stranded with limited access to accommodation owing to the preventive 21-day lockdown. To support such groups and ensure their wellbeing, OYO has gone live with ‘Donate A Night’, a crowdfunding campaign across its platforms including the OYO app. Through this initiative, users can voluntarily contribute to donate one night’s accommodation for people who need it the most - first responders like doctors, medical staff, emergency services personnel, policemen as well as low-income individuals such as stranded daily wagers or migrants. OYO’s second initiative, ‘Book A Night for Self-isolation’ aims to support those individuals who require or are being advised self-isolation. These include domestic and international tourists among others who require safe and hygienic pay-per-use self-quarantine facilities, at affordable prices. The hotel chain has already opened doors to several properties spread across major hotspots of Mumbai, Gurgaon, Pune, Hyderabad and Noida. OYO will provide preventive and contactless support to individuals; including stay, meals, WiFi connectivity, and proper waste management through local municipal agencies. OYO has formulated certain guidelines to ensure the highest levels of hygiene, health and safety of guests and on-ground employees. OYO is also working with a broad cross-section of corporates and public and private organisations to ensure that any of their employees impacted by the lockdown are able to avail affordable, accessible accommodation options in certain OYO hotels identified to help those who are stranded. Commenting on the company’s initiatives to curb the pandemic, Rohit Kapoor, CEO, OYO Hotels & Homes, India SA said, “This is a difficult time for all of us around the world but it’s also a time to step forward and pull together all our limited resources. While the medical community and essential services professionals are doing their part at the frontlines, it is our responsibility and duty as good corporate citizens to support those who support us. While the entire country is under lockdown in an effort to self-isolate and control the outbreak for the greater good, there are many migrants and international tourists that are struggling to find hygienic and safe accommodation.” He further added, “With Donate A Night and Book A Night, we open doors to our hotels and extend our full support to our frontline heroes, caregivers and symptomatic individuals. We urge each and everyone of our employees, asset partners and consumers to support this cause by donating one night’s accommodation for those who haven’t been able to safely self-isolate.” The government of India on March 24, released the Ministry of Home Affairs guidelines for the 21 day nationwide lockdown, which recognises under point 7, that while hospitality services will be suspended, the following exceptions will be made: • Hotels, homestays, lodges and motels which are accommodating tourists and persons stranded due to lockdown, medical and emergency staff, sea and aircrew. • Establishments used/earmarked for quarantine facilities Adhering to these guidelines laid down by the government, OYO will continue its two-pronged efforts to minimise the possibility of infection and maximise social distancing and hygiene. In line with this, OYO recently joined forces with Apollo Hospitals as a part of Apollo’s Project Stay I (Stay isolated) to develop and support accommodation requirements of suspected COVID-19 patients requiring quarantine or self-isolation. With Travel, Hospitality & Tourism sectors among the worst affected by COVID-19, the startup also recently announced that Ritesh Agarwal, Founder & Group CEO, OYO Hotels & Homes will forego 100% of his compensation for 2020, while OYOs entire executive leadership (CXOs) team takes a voluntary pay cut, starting at 25%, with many opting for an additional uncapped amount, and some going up to 50% to enable building the necessary runway for the company. OYO has also facilitated accommodation support to international tourists and engaged with multiple foreign embassies and diplomatic missions in India. About OYO Hotels and Homes Opening its doors in 2013, OYO Hotels & Homes, a young hotel startup, today is the world’s leading chain of hotels and homes. The portfolio combines fully operated real estate comprising more than 43,000 hotels with over 1 million rooms. Through its vacation homes business, the company offers travellers and city dwellers access to over 130,000 homes around the world under OYO Home, Belvilla, Danland, Dancenter and Germany-based Traum-Ferienwohnungen brands. OYO today operates in over 800 cities in 80 countries, including the U.S., Europe, U.K., India, Middle East, Southeast Asia, and Japan.

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