Business of Star Hotels flattens, lose Rs 300 million a day

Ajay Chhetri, Kathmandu, May 27: The dilemma of star hotels has been rising with the continuous extension of the Prohibitionary Order to curb spread of the novel coronavirus infection.

Due to the shutdown, the business of over Rs. 300 million a day has been disrupted. Besides, there is looming uncertainty in income source of over 50 thousand staffs employed in the hotels as restriction gets stretched.

The President of the Hotel Association Nepal, Shreejana Rana, told the TRN Online that the daily turnover of a star hotel would cross over Rs 2.5 million at the time of conducive business environment. But she added that Prohibitory Order has been nudginig the tourism sector to a dismal situation.

She however, assured that employee will get their income according to the agreement between HAN and trade union of the star hotels.

Govinda Pariyar who is the Director of Public Relation of Hyatt Regency of kathmandu, said, “turnovers of star hotels like Hyatt surpasses Rs 3 million a day in normal business period. But restriction has disrupted the flow of business”.

There are more than 138 star hotels in Nepal. They are categories as one-star, two-star, three-star, four-stars, five-stars. All has remained standstill in the pandemic.

He, however, added that “the hotel like Hyatt Regency is partially opened for the staffs of various airlines, staffs of various agencies. So, it is currently depending on 20 percent its usual business from the accommodation of those staff”. But such privileges are option for few hotels.

Apart from the business, the Prohibitory Order has affected around 50 thousand staff across the country delivering hospitality service in star hotels. However, there is an agreement between trade unions of hotels and Hotel Association of Nepal (HAN) in this January to guarantee of basic wage and salary to the hotel staffs.

Another aspect of current crisis is that Hotel owners had increased investments with the expectation of resumption of business after the lockdown in the first wave of COVID-19.

Chief Executive officer of Hotel Association of Nepal, Tek Bahadur Mahat, said that “there is rising concern of having to bear the cost of the investment”.

In Nepal, the Star Hotels are highly dependent on the expenditure of foreign tourists. Restriction of mobility of international flights and borders are having massive impacts on the business of the Star Hotel.

CEO Mahat said that “hotels of Nepal are mainly dependent on foreign tourists, so hospitality business has been highly affected with the enforcement of the Prohibitory Order of government and the ban on regular international flights”.