Don’t choke the hospitality sector—-सविस्तर माहितीसाठी Business Line [ The Hindu ] मधील बातमी वाचावी.

Generating over $200 billion in revenues and employing over 40 million people in 2016, the travel and tourism industry contributed almost 10 per cent to India’s GDP. Prime Minister Modi has repeatedly spoken about tourism being an intrinsic part of his vision. ‘Make in India’ and the provision for e-visas were steps in the right direction. One almost began to believe that the travel and tourism had finally begun to receive the attention it deserved.

But recent events, such as liquor ban on highways and some provisions in the GST suggest the hospitality business has been extended a second-fiddle treatment.

No easy business
Hotel projects tend to be highly capital intensive, require a long gestation period and are frequently plagued by tribulations such as a very high cost of borrowing, relatively short repayment schedules as well as a maze of licenses, permits and approvals that are often marred by red-tapism and bureaucracy.

Hotel performances are instantly impacted by changing socio-economic and political factors and the business is inherently cyclical from a performance stand-point. The bravehearts who invest in this business aren’t necessarily signing up for an easy ride to begin with.

The recent liquor sale ban by the Supreme Court on all national and state highways, however well-intended, has ended up impacting free-standing restaurants and hotels as well. The impact of this is not limited to loss of revenue by way of liquor sales. It has caused a ripple effect on consumer choices from a lodging standpoint — the primary generator of revenue for hotels.

It’s a case of the presence of alcohol not necessarily aiding revenue enhancement, but its absence almost certainly harming the ability to attract guests. Hotel owners now must contend with an unforeseen environment that has made an immediate and significant impact on their ability to earn revenue and it will not be surprising to see more NPAs in the months ahead.

via Don’t choke the hospitality sector | Business Line