Covid-19 Relief: Need Cash Support, Not Loans, Say Hotels, Tour Operators
Tour operators to hotels are disappointed by the government’s measures for the tourism industry, one of the worst-hit sectors during the pandemic.
Measures were part of the economic support package announced by Finance Minister Nirmala Sitharaman on Monday. “Under new loan guarantee scheme for Covid-19 affected sectors, working capital or personal loans will be provided to people in tourism sector to discharge liabilities and restart businesses impacted due to Covid-19,” she said.
The scheme, the minister said, is expected to benefit as many as 10,700 tourist guides recognised by Ministry of Tourism and state governments, and 904 travel and tourism stakeholders. Loans—with zero processing and foreclosure charges, and no additional collateral needs—will be provided with 100% guarantee up to the following limits:
Rs 10 lakh for travel and tourism stakeholders.
Rs 1 lakh for guides licenced at regional or state levels.
The government has decided to give 5 lakh free tourist visas till March 31, 2022, to boost tourism—that can potentially cause revenue loss of Rs 100 crore.
“Although we’re thankful to the finance minister for considering the tourism sector, these relief measures won’t be enough,” Rajiv Mehra, president of Indian Association of Tour Operators, told BloombergQuint over the phone. “I’m not sure how many operators will take the loan when business is halted. Taking a loan will be a more of a burden than benefit,” he said, adding the visa fee waiver should be extended till March 2023 with no cap.
Ajay Singh, president of Tourist Guides’ Federation of India, said they had sought monthly compensation of Rs 30,000 for each guide till the end of the pandemic. The federation is registered with tourism ministry and has 16 associations across India under its umbrella.
“Instead, the government has announced loans, that too with a limit of Rs 1 lakh," he said. "If someone is unemployed, how will they repay it? Things like tenor of the loan or whether it’s going to be interest-free are not clear."
The limit should have been at least Rs 10 lakh and loans should be free of interest, he said. “The tourist guides could then have availed it as per their requirements. This announcement is nothing but peanuts.”
Hotel operators, too, said the measures won’t make a difference.
“The relief measures announced today for the tourism sector are insufficient, the actual benefits are very unlikely to percolate to the people who have lost their jobs,” said Kapil Chopra, founder and chief executive officer of Postcard Hotels and Resorts.
“Nothing has been said about hotel and restaurant employees who have lost their jobs," Chopra, who’s also chairman on the board of the restaurant search platform EazyDiner, told BloombergQuint. "Instead of announcing loans, they should have come up with direct cash transfer for the employees of the hotels and restaurants who have paid their PF and have been laid off like in a lot of countries globally."
Chopra said the relief measures could have been tweaked to widen its reach. “The waiver of visa fees isn’t going to move the needle as India is a long-haul destination and it won’t do much for the revival of the sector,” he said. “Instead, Rs 100 crore could have been diverted for giving some compensation to the employees of this sector who have lost their jobs.”
Marriott Hotels and Hyatt Hotels Corp. declined to comment.