Government should ask banks to not recover from hotel industry for the next 18 months: Vithal V. Kamat, CMD, Kamat Hotels

Dr Vithal V. Kamat, Chairman and Managing Director, Kamat Hotels (India) Ltd., talks about how the government should help the hotel and hospitality industry and the steps that will be taken to grow the business in the post-COVID world during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: The government hasn’t had any specific announcement for the hospitality sector in the stimulus package. How disappointed are you with it? 

A: The first thing is that a government does at such a time is spending not lending but this government hasn’t spent anything. Even at your home, you will regret a situation, where your parents don’t spend anything on you or make an effort to help you. I have been into this business for the last 51 years and can’t do any other business. I have paid taxes for 51 years and in these years have supported the government with crores of rupees in form of interest, taxes and providing jobs.

There are three industries, namely aviation, tourism and hospitality, who have suffered the most but the government hasn’t provided any package to them. I believe that the Finance Minister would have forgotten that we have such an industry in India and that’s there is no question of a package for it. We are not mendicant who is asking for a particular kind of help. There is a need to ride it out as it is difficult for us to handle it in a right or else job of more than 3,000 people associated with me will be in a danger.

Q: But the government says that the hospitality and tourism sector is also covered in the package that has been announced for the MSME sector. What is your view on this? Do you think that these sectors are being addressed in it or it is not enough?

A: You will be surprised to know that the Maharashtra government in 1999 decided to grant industry status to Hotel but it hasn’t happened till date. So, what is this MSME? If the industry hasn’t been recognized in any scale till date then what are the benefits that you are providing to us. Secondly, hospitality is the largest sector of the world and has 10% contribution to India’s GDP and 11% people from across the world, including India, are working in the segment but I can’t understand that why such a sector is being ignored.

Q: What will you do now as the government has made its announcements in continuous five days and tried to cover almost all sector? How will you deal with the current situation?

A: When I was young then my father used to say that I can’t go to a school picnic because I was a naughty chap. Then I used to move to my mother seeking help by saying that I will behave like a grown-up child and will not repeat such activities but I have to go for the picnic. So, now, it is a time, when the industry should unite and move to the finance minister madam as well as the governments at the state and centre and explain the issue to them. And I think that they will understand because being self-reliant is a good thing but on whom we will depend when we don’t have money in our pockets. What will I do if I face difficulties in paying salaries to people who are working with me and paying back to the banks? What my family or I will get after working for Mother India for 51-52 years if our industry is swallowed/ taken away by any foreign industry? At the last, I will retire from the industry if it doesn’t work as I can’t do anything more than this

Q: Do you think that the government is in a mood to rethink it? It has had an impact on the business. So, can you share some numbers with us industry-wise and on your company in terms of revenue loss per day?

A: It hasn’t occurred only with the hospitality industry in India but it has happened across the world. The first thing is that we don’t know who the enemy is or what is its colour or form or smell. So, we can’t see any horizon based on which decisions for future actions can be taken. So, we can think about the solution after we get to know about it.

Secondly, going by the social distancing norms, around 40% business of the hotel and hospitality industry, which comes from the meeting, incentives, conferences and functions/marriages, will be lost. Besides, if meetings can be held through video conferencing then conventions will not have to come to the hotels any more. That’s the industry will take at least 12-18 months to recover because people will have fear even if the disease comes to an end in the next two months. So, the government should take people like us into confidence and we will try to normalize the atmosphere at the earliest and if succeed then the business will return.

Q: Several things, like communication and doing business, will change. So what is your outlook on the hotel industry under such a scenario? What changes will be brought in to meet the current situation as possibilities are that under the new normal people will not like to travel a lot? 

A: A hotelier is a person who has to adjust everywhere. In the last 20 years, I have seen several incidences, like 9/11 and Babri Masjid among others. Harivansh Rai Bachchan has said that “लहरों से डर कर नौका पार नहीं होती, कोशिश करने वालों की कभी हार नहीं होती” means “The boat those qualms the waves, never gets across. The mind that dreads and dares has never been at loss.” So, we will find new ways in this and encourage hygiene more. We will find some technique in which people will come, sit and have food and we will have a focus on hygiene and social distancing norms. It will need money and path and that’s why we need support from the government. 

Q: Update us about your cash flow, working capital and debt on your books?

A: Looking into a business for cash and reserves that is not earning even a single penny will make my seniors in the finance department sad. At least when I am a chairman and completely aware of the fact that the doors of even a single hotel are not open and then there is no talk of getting cash or cash reserve. Looking at a particular gate after an earthquake in which complete house has fallen has no meaning. The government help is needed to make the industry stand as it was. 

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Q: What are those two-three things that you need from the government in the form of support to end most of the problems that your sector is facing at present?

A: The first thing is that the government should tell the banks that there should not be any recoveries from their end for the next 18 months. After that, we will pay that money along with the interest to them. We need time - we are not saying that we will not pay back – or else we, entire hotel sector, will turn NPA and if it happens then they will have to sell them. So it is time and the government should provide some time to the industry and make us sit with the banks to discuss things. What is good for everyone is good for the country, as well.