Chennai: Cash-strapped hoteliers appeal for rent relief

CHENNAI: Around 2,400 hotels in the state, including top US-based coffee and burger shops in Chennai, may be forced to shut their stores as they are facing huge losses and unable to pay rent.

Tamil Nadu Hotel Association has requested the government to provide a rent waiver for the lockdown period, without which more hotels will be forced to shut down.

Office-bearers of the association, which has 8,000 registered hotels, met through video-conferencing on Thursday to discuss this issue.

Except for a handful of hotels, most of them run on rented premises and the rents vary from Rs100 to Rs250 per square feet depending on the location. It's almost double if the store is inside a mall or shopping complex.

For an example, rent for a restaurant, of the size of a badminton court, will be around Rs1.5 lakh-Rs2 lakh per month in Chennai.

"Operation has come to a standstill in most of these hotels since March 24. Many are facing a financial crisis like never before and are unable to pay pending rent dues," said M Ravi, president of the association.

While top multinational hotels have offered to close their branches in Chennai as they were unable to handle the losses, domestic players have no other option but to either relocate or close down for a year or two, he said. He urged the government to announce at least 50% rent waiver for the next six months.

Corroborating this, a local private survey suggested that 74% of customers were not ready to go to a restaurant for the next 30 days even it was opened and would prefer deliveries at doorsteps. But food deliveries too have been on the decline and are not very profitable, say hoteliers.

S Ramesh, who owns a restaurant at Thanjavur, said, "Even when cost of ingredients like vegetables, oil and dal have been on the rise in the last two months, not many small-scale eateries have increased the prices proportionately in fear of losing customers. But they can't continue to operate on such low margins for long," he said.