Covid impacts about 10,000 hotels and restaurants, owners plan to sell
The cascading impact of Covid enforced lockdown and restrictions has led to about 10,000 hotel owners across Karnataka planning to either sell the hotel or give the same on lease to recover from mounting losses. 1000 hotels in Bengaluru alone are under the hammer, however, there are no takers.
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FollowWorsening financial crisis faced by the hotel industry during Covid since 2020, it is said out of 70,000 hotels including bars, pubs and restaurants, 10 to 15 percent of owners are planning to sell the hotel or sub lease their property to recover from losses.
As per PC Rao, Bruhat Bengaluru Mahanagara Palike, Hotel Association, Secretary, while Tamil Nadu faced 30% of owners quitting the business, about 10 to 15% of hotel owners in Karnataka will quit the game.
"Since the pandemic, many hotels did not open due to losses and few which opened were again shut due to the second wave. Now many want to sell or give it for sub-lease, but are not finding takers," Rao told Asianet Newsable.
Out of 70,000 plus hotels including big, small, bars and restaurants, Bengaluru City comprises 24,000 registered hotels and among them, 1000 will never open and the only option before them is to sell it, opined Rao.
From maintenance to payment of salaries to workers, rentals, license renewal fees and power charges all have contributed to losses for hotel owners.
Announcement from Tourism Department offers a silver lining to hoteliers:
The tourism has announced that 50% property tax rate will be waived off this time, this apart, power fixed charges of from Rs 50,000 to 1 lakh plus power supply to be reduced by 50% for three months.
"Whether we use it or not, we had to pay the fixed amount, this decision to help hotel associations will help in ensuring the continuation of the business," said Rao.
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