Loan restructuring make or break factor for hospitality industry: FHRAI

Loan restructuring is a make or break factor for the hospitality sector which is looking at 25 per cent of businesses permanently shutting down before the end of this fiscal, industry body FHRAI said on Monday. 

Hospitality establishments are struggling due to uncertain business conditions on account of restriction on foreign tourist arrivals, shortage of labour, apprehensive domestic travellers and most importantly, no access to working capital, the Federation of Hotel and Restaurant Associations of India (FHRAI) said in a statement.

"The hospitality industry anticipates poor business for at least another year and until then, to keep it afloat, it needs working capital," FHRAI Vice President Gurbaxish Singh Kohli said.

The industry has pinned hopes on the finance minister making sector-specific tweaks to allow hospitality establishments to benefit from loan restructuring, he added.

Hospitality is a capital and labour intensive industry with high gestation period and perishable commodities and services. The business dynamics are unique and so are its challenges, FHRAI said.

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The banks fail to note this underlying difference between hospitality businesses and businesses from other sectors, it added.