Pandemic-struck hoteliers unable to pay bank loans

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Panaji: Hit hard by the ongoing COVID pandemic, hoteliers in the state are worried over repayment of loans, as the moratorium period on loans and equated monthly instalments (EMIs) will end by this month-end.

With tourist arrivals in the state dwindled to a trickle, local hoteliers are concerned over repayment of bank borrowings once the moratorium deadline ends on August 31.

According to hoteliers, their income is too low to repay bank debt even after a month after hotels were allowed to reopen for business.

President of Travel and Tourism Association of Goa (TTAG) Nilesh Shah said the industry is looking at some kind of low-interest loans from the state government to pay off the bank loans. He said the adverse impact of the pandemic has been felt on all segments of the Goan hospitality industry.

“Travel agents, tour operators and water sport operators among others are all in the same boat. Hotels, which have been allowed to function are presently operating under losses. They cannot cover the fixed cost with the meagre occupancy, which is barely 4-5 per cent,” said Shah. According to the TTAG president, some hoteliers are looking to shut down their establishments and exit the hospitality business. “The buzz in the market is of few hotels looking for buyers,” said Shah.

Stakeholders in the local hospitality industry believe that all verticals of the industry must restart for tourism to take off in the state. This includes the reopening of bars, since liquor is a crucial part of the business, as well as airline connectivity that at present is poor. 

“Airlines have not started properly. While previously there were 87 domestic flights landing per day, today there are barely seven flights a week,” pointed out Shah. He said the industry has been waiting for a long time to recover and, therefore, needs financial support to survive the crisis. “It will take a minimum of seven months for some sort of recovery. By February 2021, hotels in the state hope to operate at 40 per cent capacity,” said Shah.  

A total of 344 hotels till date have been given permission by the department of tourism to function after the hotels reopened on July 2 post the pandemic lockdown. However, majority of the hotels with permission to start operations are actually not functioning.

The TTAG is hoping that availability of rapid testing kits will perk up the sentiments of tourists. “Tourists were confined to the hotel rooms for 48 hours as they awaited COVID test results. With rapid tests, the results will come in immediately and tourists will be able to move around,” said Shah.