‘The next 12 months are going to be very tough’
The pandemic gutted India’s economy and hurt millions of workers, artists, professionals, and homemakers. Ahead of the Union budget, HT speaks to a cross-section of people to document their hopes and wishes from the exercise
I have had to lay off all members of my permanent staff with the promise that I will re-employ them once the situation improves SERAFINO COTA
PANAJI: Serafino Cota looked forlorn at the edge of his 18-room hotel, standing a stone’s throw away from south Goa’s Cavelossim beach. His once-vibrant Dona Maria Sa hotel has been closed since March, when the government imposed a nationwide lockdown to arrest the spread of Covid-19, and fear of the virus drove tourists away from the dunes of the beach, once a favourite haunt of foreigners.
December and January were his busiest months, but this year he’s written off this season, saying it will be better to reopen by October. Still, he is unsure if his pristine property overlooking the ocean, far from the noisy beaches of north Goa, will generate enough revenue to pay salaries and running costs.
“Even before the lockdown, tourism was witnessing a slowdown but we managed to survive owing to foreign tourists. We would get around 10-15 families or couples per month and the hotel managed to remain afloat based on that,” Cota,59, said.
The 18-room hotel was the sole source of income for his family of five. Additionally, there were 10 employees dependent on him. “I’ve had to lay off all members of my permanent staff with the promise that I will re-employ them once the situation improves,” he said.
With bigger properties slashing rates owing to the pandemic, Cota found himself competing with branded hotel chains. “The situation is such that small and medium hotels have been squeezed out by starred hotels, who have slashed their rates even during the peak season to enter the price range occupied by the small and medium hotels. We have no more space to cut our rates further on account of fixed costs,” he said.
“Rather than compete and incur expenses, we have chosen to survive by digging into our savings hoping to see the situation improve in the next twelve months,” he said, but didn’t sound hopeful. “The next twelve months are going to be very difficult,” he added.
Cota’s predicament sums up the story of small hotel owners and the tourism sector across India during the pandemic.
According to the World Travel and Tourism Council (WTTC), tourism generated $194 billion or 6.8% of India’s Gross Domestic Product (GDP) in 2019 and supported 39.80 million jobs.
The sector was predicted to grow at an annual rate of 6.9% to $460 billion by 2028, which would be roughly 9.9% of GDP, said the assessment. “The sector needs to be given the status of an industry in the real sense,” said Goa travel and tourism association president Nilesh Shah.
Cota said while Goods and Services Tax (GST) rates on hotels were reduced last year, the rates for small and medium hotels were left untouched. “For small and medium hotels, the rate was not reduced from 12% to 5% or 8% as we have been demanding. I expect the rationalisation of the GST rates in the budget,” he said.
The GST Council reduced the rates from 28% to 18% for starred hotels (Rs 7,000 room rate onwards), and from 18% to 12% for mid-size hotels (Rs 2,001 - Rs 7,000). The GST rate for hotels charging between Rs 1,000 to Rs 2,000 per night is now the same as those charging Rs 2001- Rs 7,000 per night – 12%.
Cota hoped the hospitality sector gets industry status so that availing long-term loans from banks becomes easier and properties like his become eligible for other industry benefits.