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Chalet Hotels’ Sethi Seeks Urgent Relief Package For Hospitality Industry

The chief executive officer of Chalet Hotels said solvency is at stake for many hotels.

Furniture sits in an empty restaurant at the Galaxy Macau casino and hotel, developed by Galaxy Entertainment Group Ltd., in Macau, China (Photographer: Billy H.C. Kwok/Bloomberg)
Furniture sits in an empty restaurant at the Galaxy Macau casino and hotel, developed by Galaxy Entertainment Group Ltd., in Macau, China (Photographer: Billy H.C. Kwok/Bloomberg)

The government must quickly announce a relief package for the hospitality industry that’s been badly affected by the novel coronavirus outbreak and the subsequent national lockdown, Sanjay Sethi, managing director and chief executive officer of Chalet Hotels Ltd., said.

“We cannot delay the relief package for the industry anymore,” he said, adding that many countries like the U.K. have announced similar measures. “For many companies solvency is at stake.”

The hospitality industry was among the worst affected after the restrictions announced by the government disrupted demand and occupancies tanked.

Sethi said the government must:

  • Offer a “serious break” through restructuring of loans.
  • Urge the insurance regulator to allow losses from Covid-19 outbreak to be covered under insurance.
  • Subsidise payroll costs in the hospitality sector in one form or the other.
  • Waive electricity duties, and state governments must bring tariffs on a par with industry and not impose commercial tariffs.

The industry, he said, must take measures to counter the coronavirus-induced disruption.

“We need to rethink the organisation structure and what the structure of the industry will be like in terms of manpower ratio,” he said. “We seriously need to look at the productivity ratios in the industry.”

Sethi also said the hospitality industry must look at curbing energy costs. “Nearly nine percent of a hotel’s revenue goes towards HLP—heating, lighting and power costs,” he said. “At Chalet Hotels, we had this under 7 percent. As occupancies were down in the past few days, we had seen a serious reduction in consumption.”

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