After battling months of economic uncertainty, business upheavals, and the prospect of more ambiguity as newer variants of COVID-19 seem to hover on the horizon, the hospitality and tourism industry had pegged their hopes on the Union Budget 2022. Over the last few weeks, the government has actively engaged with industry and other stakeholders to announce various measures to revive the economy. And hoteliers hoped this was a segue to the much relief they had been asking for.
Many hoteliers were glued to Finance Minister Nirmala Sitharaman’s speech, hoping it would give the sector the much-needed financial assistance and support it desperately needed. Her announcements elicited a mixed bag of reactions. Here are what some of the industry stakeholders have to say:
KB Kachru, Vice President, HAI and Chairman Emeritus & Principal Advisor South Asia, Radisson Hotel Group:
“We laud the Finance Minister for extending the ECLGS up to March 2023. The additional amount earmarked for hospitality and related sectors will provide relief to the industry which is yet to match the pre-pandemic level. The announcement recognizes the distress in hospitality. However, the specifics require to be studied to understand better the impact on specific businesses and organisations. HAI in the past has been requesting for the scheme to be customised and tailored to the unique model of the hotel business and the future outlook of the sector.”
Vineet Verma Executive Director & CEO, Brigade Hospitality
The hospitality and tourism sectors have most regrettably been given the short shrift in the Union Budget 2022-23. Except for the extension of the Emergency Credit Line Guarantee Scheme (ECLGS) till March 2023, there is no other announcement that could have provided the much-needed succour for sectors that have been the worst hit.
SP Jain, MD, Pride Hotels Ltd
Finance Minister has considered extending ECLGS, and its guarantee cover has been expanded by INR 50,000 crore to the total cover of INR 5 Lakh crore. This will be a great boon for the hospitality and travel trade sector, which has been adversely impacted by the pandemic for the last two years. The industry can now provide employment to millions of people who have lost their jobs. This is a reasonable budget for the hospitality and tourism sector.
Sarbendra Sarkar, Founder, Cygnett Hotels and Resorts
The extension of the ECLGS scheme with an additional allocation for the hospitality sector is a welcome move. The hospitality sector has been one of the hardest-hit sectors because of COVID. This will help the small and mid-sized hotels overcome liquidity issues and return to the growth path. The big focus on infrastructure development will also help the tourism and hospitality sector. We also welcome the announcement of the National Ropeways Development Programme.
Sanjay Sethi, CEO and MD, Chalet Hotels Limited
We welcome the attention given to the hospitality industry by the Finance Minister in the ECLGS announcement. However, we await fine print on the relaxations on meeting debt ratio covenants of previous ECLGS schemes, if any, and if the INR 200 crores cap under the scheme has been enhanced.
We are also very pleased to hear the Finance Minister focus on the environment, sustainability, solar power and electric vehicles. The focus given to prioritise clean mobility and green energy in the current Budget, is aligned with the initiatives and actions undertaken at Chalet Hotels Limited.
Sonica Malhotra Kandhari, Joint MD, MBD Group
We are happy with the announcement regarding the extension of ECLGS up to March 2023. The increase in guarantee cover to INR 5 lakh crore is a welcome step that will bring a lot of relief to the battered hospitality sector and pent up demand post-COVID. The announcement regarding National Ropeways Development Programme, to be taken up in PPP mode, will improve the connectivity and give impetus to the travel and tourism sector. Secondly, the budget has boosted the railway and infrastructure sector with the plan to develop 400 new generation Vande Bharat trains and expand the national highway network by 25,000 km by 2022-23 under Gati Shakti plan. This is a welcome step that would lead to the new growth trajectory of the economy and will lead to more job opportunities for the youth.
Kush Kapoor, CEO, Roseate Hotels and Resorts
Over the last two years, the hospitality industry has been severely battered by three consecutive COVID-19 induced waves. The extension of ECLGS moratorium by one year for the hospitality sector will be a breather for the hotel players grappling with the burden of loan repayment and uncertainties in revenue generation. The move will bolster the much-needed liquidity to the sector that employs many people.
It is appreciated that despite the revenue constraints faced by the government and its impact on the widening fiscal deficit, the government has taken cognisance of the strain the hospitality sector is going through. This will help the sector tide over the cash crunch and working capital issue.
Dilip Puri, Founder and CEO, Indian School of Hospitality
The government has laid emphasis on reviving the hospitality sector. We are hoping that services in the hospitality sector by small and medium enterprises will bounce back with the extension of ECGL services till March 2023 with an increased cover of 50,000 crore.
With this extension the hospitality and allied industry will help enable the suspension of all failing schemes and restructure infrastructure debt. We are also looking forward to see how ‘Drone shakti’ scheme to promote start-ups and INR 6,000 crore allocated to boost MSMEs will roll out in future
