50% restaurants may not open once restrictions ease: Industry insiders


Though restrictions are expected to ease gradually in states, restaurant owners said the second Covid-19 wave is worse than the first and 50% restaurants may not open even when curbs are eased. Industry insiders do not foresee a recovery for the sector till the time Indians are doubly vaccinated. While lockdown restrictions were longer last year, the second wave was more devastating for families, they said, and would have made people hesitant and fearful of venturing out.

They also see an exodus of employees to other sectors post lockdowns, possibly stricter standard operating procedures this time and lingering debt issues as factors that could delay recovery.

“The second wave is a bigger body blow. The first lockdown was countrywide and when restaurants reopened there was still some working capital available. They spent a lot of money in bringing people back and relaunching operations. Noone was making any money after resuming. But, now the workforce is also confused,” said Pradeep Shetty, joint honorary secretary of Federation of Hotel & Restaurant Associations of India (FHRAI).

“There is a good chance employees will switch to other trades because of the unpredictability of this profession. There is uncertainty that if restaurants open, for how long will they be allowed to open because there is the likelihood of a third wave. Our estimates are 50% restaurants may not open even when restrictions ease across states,” he added.

Anurag Katriar, president of National Restaurant Association of India (NRAI) said considering the impact on lives during the second wave, it does not look like there will be any normalcy for people anytime soon. “Even if we are allowed to function, it will be with restricted hours or odd even days.The consumption patterns will change. Restaurants are trying to keep their brands alive through deliveries. The serious ones will stay,” he added.

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Riyaaz Amlani, chief executive of Impresario Entertainment and Hospitality, which runs restaurant brands including Social, Saltwater Café, Slink & Bardot and Smokehouse Deli estimated about one in four restaurants in Mumbai has shut down since the onset of the second wave. “The real acid test will be when we open up and we start seeing how much disposable income has been affected. This time the fears have become more real. We are worried about consumer confidence coming back. There has been an impending talk of a third wave. When we opened last year there was a sense that we had peaked. In the first wave, we were able to take debt and open up again. This time even debt is a challenge. In addition to the losses and the interest, landlords are being difficult. So, places will shut down,” he added.

Priyank Sukhija, CEO of First Fiddle that runs brands such as Lord of the Drinks, Tamasha and Warehouse Café does not foresee a recovery till the end of the year or till the time people are fully vaccinated. “That will take time. That is the only thing which will build confidence,” he said.

Shivanand Shetty, president, Indian Hotel & Restaurant Association (AHAR) said models such as being allowed to open for a limited hours during the day like other establishments will not work for the restaurant business.

“We would want regular timings so that we can cover our costs. Stricter SOPs might also come this time considering the impact of the second wave. Most of our migrant staff has not come back. Deliveries are few but people are used to this model now. Even liquor is available at home. The dine in services might take time to regain. The industry needs to be resuscitated by providing assistance such as extending renewal periods for licenses, waiver of property tax for the lockdown period,” he added.

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Shetty said venturing out for people is not going to be as easy this time.

“People are not going to let their heads down like last year. The delivery business is patchy. Revenues from deliveries are much lesser this time. This industry may not come out for another two years unless the state and central governments come up with some scheme for employee support or waivers of license fee and other charges. 2021 is going to be more difficult,” he said.



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