BusinessMumbai Hyatt closed, bad condition of hotel industry, 9cr jobs at risk

Mumbai Hyatt closed, bad condition of hotel industry, 9cr jobs at risk

The corona pandemic has had a bad effect on all industries. But due to the closure of a five star hotel in Mumbai, it has become clear how big a threat is looming over the ‘hospitality and tourism industry’.

Famous five star hotel chain Asian Hotels (West) has decided to close down the Hyatt Regency Hotel in Mumbai. The hotel made it clear in the notice issued on 7 June 2021 that it does not have money to pay salaries to the employees. Due to this all the services of the hotel have been temporarily suspended till further orders.

Due to this, more than 150 employees working in Hyatt Regency have lost their jobs in one stroke. Shiv Sena’s union Bharatiya Kamgar Sena has challenged this decision of the hotel in the industrial court. The court has reserved the rights of the employees while fixing the date of next hearing on June 28.  

However, out of the Hyatt chain of parent company Asian Hotels (West), only the Hyatt Regency, located near the Mumbai airport, has been closed. All other Hyatt hotels are operational.

Why was Hyatt closed?

According to media reports, the hotel suffered heavy losses in the first wave of Corona. In the nine months of the year 2020-21, the hotel group suffered a loss of Rs 109 crore. In such a situation, Asian Hotels (West) Company informed the stock exchange that it could not pay the loan and interest of 4.32 crores taken from Yes Bank.

After which Yes Bank started banning the economic dealings of the hotel. Asian Hotels (West) has a total debt of 262 crores.  

The Hyatt Regency was one of the most preferred five star hotels among corporate tourists. 800 to 1000 employees work in this hotel of 400 rooms. Being located close to Mumbai airport, tourists doing business trips and meetings used to come and go here. But due to the lockdown due to the pandemic, the hotel has been closed since last year.

How bad are the conditions?

According to the Hotel Association of India (HAI), almost zero revenue has been registered in all categories of hotels. The association’s primary data shows that more than 40 percent of hotels have closed and about 70 percent are on the verge of closure.

Federation of Hotel and Restaurant Associations of India (FHRAI) says that 9 crore jobs in the industry are under threat. FHRAI has said that in the first wave about 50 percent of the jobs were lost, while in the second wave the situation has worsened and 70 percent of the jobs have been lost directly or indirectly.

According to the FHRAI report, the total revenue of the Indian hotel industry in the financial year 2020 was 1.82 lakh crores. In 2021, about 75% of the revenue of the hotel industry is lost, which is about 1.3 lakh crores. The total outstanding debt on the hotel industry is more than Rs 60,000 crore.

Complaints and demands of hotel industry

FHRAI’s Joint Secretary Pradeep Shetty explains that, “8 to 9 percent of the country’s total GDP comes from the hospitality and tourism industry. Since April 2021, the industry has not been able to do business of even 8-10 percent. Because of the lockdown. Only our right to do business has been taken away but our bank-lenders are being given the right to collect loan and interest. This is a big problem for all of us in the operation of hotels, maintenance, payment of salaries and wages.”

In such a situation, the delegation of FHRAI has placed many demands in front of the state and central governments. In which the demands of property tax, license fee, relief in electricity and water bills from the state government and stimulus package of loan repayment from the central government, 3-year extension in moratorium, basic payment for employees are included. 

Shetty says, “In the second corona wave, 40 percent of hotels and restaurants in the country have been permanently closed due to financial losses. About 20 percent have not fully opened since the first lockdown. The remaining 40 percent are running in losses. That is why if there is no relief from the government, it will be impossible to rebuild our industry.