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Home / Cities / Himachal tourism industry most hit due to Covid-19 lockdown, say stakeholders

Himachal tourism industry most hit due to Covid-19 lockdown, say stakeholders

Hoteliers’ association in the state have proposed various steps to the government and demanded relaxations in taxes and licence charges

cities Updated: Apr 29, 2020 19:31 IST
Gaurav Bisht and Naresh K Thakur
Gaurav Bisht and Naresh K Thakur
Hindustan Times, Shimla
(Deepak Sansta/HT)

The nationwide lockdown imposed to check Covid-19 has dealt a severe blow to Himachal’s tourism industry, which earns the hill-state a significant chunk of its revenue.

The tourism and hospitality sector contributes 7% to the state’s Gross Domestic Product.

“The hotel industry needs special protection. It was first to close down due to the lockdown and will be the last to open. Tourism is the soul of Himachal’s economy besides being a major employment generator,” said Atharv Chadha, owner of Hotel Ashiana Grand located in Chhota Shimla area.

“The sector is in dire need of special status and stimulus package. All industries will start operations soon except the hotels. Hoteliers require deferment of bank loan installments for at least 15 years or they will turn into non-performing assets,” he added.


The Shimla Hotel and Restaurant Association representatives had also called on the chief minister recently requesting him for interim relief.

Similarly, Tourism Industry Stakeholders Association has also written to the director of tourism, demanding a complete GST waiver for tourism, travel and hospitality industries for one year and subsidy on commercial fuel and gas for the industry.

Hoteliers’ body president Sanjay Sood claimed that currently all hotels in Shimla were operating at 0-30% occupancy rate.

“If the lockdown prevails, there will be massive layoffs,” he said, adding that the pandemic had affected businesses and livelihood of thousands of employees.

As per government records, there are 3,679 registered hotels in the state with bed capacity of 1, 03,053. In addition to this, there are 2,189 home stays having bed-capacity of 12,181.

Last year, a total of 172.12 lakh tourists visited the state, of which 168.29 lakh were domestic and 3.56 lakh foreign tourists.


The industry stakeholders have demanded that for the staff that is beyond the coverage limit of the Employees’ Staff Insurance Corporation (ESIC), the establishments should be allowed to pay only 25% of their salaries, while the government can foot the balance amount with the help of state agencies like Employees’ Provident Fund (EPF).

They have also asked the government to pay salaries of employees working in units not covered under ESIC but GST.

State should also reduce commercial electricity tariff by about 10% to 20% for a period of five years on the analogy of states of Maharashtra and Punjab, Sood demanded.

There is an automatic increase of 15% in the water charges every year which must be deferred for the time being along with municipal taxes.

Minimum wages in terms of Variable Dearness Allowance (VDA) should not be increased or be fixed for the next two years, he said.


Tourism Industry Stakeholders Association president Mohinder Seth said that the excise and taxation department should provide relaxation in licence fee as many hotels and bars had been shut due to Covid-19.

“Licence fee deposited for the 2020-21 financial year should be considered from the day hotels and bars will open their operations and no penalties should be imposed,” he said.

Seth claimed that the hotel Industry will take at least 12 to 18 months to come back on the rails.


Ajay Mahajan, a former Congress legislator and prominent hotelier from Kangra, said that the government should take steps to prevent layoffs in the tourism industry. He claimed that apart from hotels, 200 units operating in adventure tourism, 899 registered photographers, 1,314 guides and over 41,000 taxi drivers were dependent on tourism.

He said the government should contribute to the EPF and employee insurance accounts.

He also demanded the state government to waive off various water and sewerage charges.

ht epaper

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