Mumbai's restaurant industry says night curfew could sound death knell to industry, seek relaxations from govt

Maharashtra announces stricter COVID-19 norms for hotels, cinema halls, offices as cases spike

"The night curfew is just a polite way of saying shut down restaurants. Over 80 percent of our business happens during dinner and during lunch hours we can operate at only 50 percent capacity as per norms. So essentially, restaurants are working at 10 percent efficiency at best, and no business can operate at such numbers," Katriar told CNBC-TV18.

Mayank Bhatt, business head of popular chain of cafe-bar Social says after having being shut for over 6 months last year, it took them 2-3 months to recalibrate the business model and the staff. "But further restrictions now in the form of the 8:00 pm curfew would mean going back to square one," Bhatt added.

The Federation of Hotel & Restaurant Associations of India (FHRAI) said 30 percent of hotels and restaurants in the country have already shut down permanently due to financial losses, and the industry claims that if the night curfew continues for more than a few weeks, it could lead to several more restaurants shutting shop permanently.

Also read: Strongly believe in India story, will continue expansion despite COVID-19: KFC

"It’s virtually a lockdown for us again. Even at 50 percent capacity, lunch only accounts for 10-20 percent of the business and even that is virtually nothing now because of Work From Home. The only prospect was the dinner business. With the curfew, the viability to keep restaurants open is out of the window and this has become a huge challenge. Across the state, a few Rs 100 crore worth of business will go down the drain," Pradeep Shetty, joint secretary, FHRAI said.

FHRAI, along with its regional association representing Western India - Hotel and Restaurant Association of Western India (HRAWI) has written to chief minister Uddhav Thackeray requesting for relaxation of the night curfew for restaurants. "The rental and salary expenses, servicing of debts taken earlier, negative cash flows and the statutory payment obligations have made hospitality the most unviable and unsustainable business under the present situation," the association wrote in its letter to the CM.

The industry also fears that loss of business could lead to more job losses. With customer sentiment starting to revive from around December-January, restaurants began re-hiring staff as they expected their business to revive. But imposition of fresh restrictions has now made things uncertain again.

"Most of our staff came back in November-December after restrictions eased and we also started hiring. But now it will be difficult to manage costs with limited operations. We will try our best to retain staff, but the 8:00 pm curfew will be very tough nut to crack," says Mayank Bhatt, business head of Social.

Also read: Burger King sparks outcry with 'Women belong in kitchen' tweet

Shivanand Shetty, president of the Indian Hotel and Restaurant Association (AHAR) said the government should offer restaurants some form of incentives to restaurants amid the restrictions. "We are losing out on our business due to the government’s restrictions. How will we survive? Who will pay the staff salaries, rents, etc? The government should at least give us incentives to help us pay our staff. 30 percent of the restaurants haven’t even opened post lockdown last year, and now another 30 percent will shut down, especially those who have fixed expenses such as rent," he added.

Shetty estimates that the imposition of the night curfew could cause a revenue loss of around Rs 500 crore for the restaurant industry in the state.

Adding to their woes is the looming deadline of paying up the annual excise license fee, which is the fee for the liquor license. Amid the outbreak of COVID-19 last year, the deadline for renewal of the annual license fee for the permit bar license holders in Maharashtra was extended till June 1. However, there has been no extension on the deadline this year yet.

NRAI’s Katriar said the industry is still struggling with past expenses such as paying staff, suppliers, etc. and having to pay up the entire fee for next year in advance is nearly impossible for most restaurants. Restaurants associations in the state have urged the government to offer relief either in the form of a deferment or allowing them to pay in installments.

NRAI put forth a proposal with the state excise department, which Katriar said was rejected. The association has now approached the Chief Minister's Office seeking relief. FHRAI too, has written to Thackeray requesting for any form of waiver of the statutory payments including excise license fees.

"Our revenue streams have been shut down by the government, but same government wants us to pay liquor license fee in advance for the fully year, which makes no sense. We are in constant dialogue with the government. We are still hopeful of a positive outcome, failing which I don’t know how many will be able to pay the license fee in full today. It's not a lack of intent, but a lack of ability. It is grossly unfair to expect us to pay thr full fee when we're not allowed to operate beyond 10 percent of capacity in total," Katriar said.