Four months since the BMC began utilising hotels in the city to house essential service staffers, including civic body and public hospital employees deployed on Covid-19 duty, the hotel owners claimed they are yet to be paid their dues.
The Hotel and Restaurant Association, Western India (HRAWI) said that while BMC had taken over 3,300 rooms in nearly 100 hotels that are part of the association, it is yet to pay the dues since April. Indian Hotel and Restaurant Association (AHAR) president Shivanand Shetty also said that dues of hotels under AHAR are pending.
The BMC, however, claimed that payments are being made to these hotels.
Alternative arrangements for stay have been made at hotels either for doctors, nurses and other civic staffers who live in far-off suburbs of Mumbai Metropolitan Region or to avoid putting family members at risk since isolation may not be possible at their homes.
Gurbaxish Singh Kohli, president of HRAWI, said that initially, BMC had offered to pay
hotels between Rs 500 to Rs 2,000 per room in hotels ranging from non-star to five stars – much below the actual market rates. This also included the cost of other services like food and laundry.
“We wrote to the civic body chief, chief minister and tourism minister that the amount was inadequate and unviable. The hotel industry has already suffered losses due to the lockdown and while it remains committed to stand by the government amid the pandemic, many hotels will be forced to shut shop due to the financial burden being put on them,” Kohli said.
Following the letter in May, a meeting was held between the BMC and the hoteliers. A follow-up letter was sent by the association on June 5 to BMC chief Iqbal Singh Chahal, where it suggested “best rates for the rooms” to enable hotel owners “to stay afloat” and not suffer further losses.
“This is throwing them (hotel owners) into a further loss situation, where firstly, they have no working capital due to zero liquidity and now due to housing doctors, etc, they are incurring additional expenses for which they have no means to pay and hence, may not be able to sustain the further burden of forced operation due to requisitioned housing of the BMC guests,” the letter said.
Following this, through a circular, the BMC announced revised rates for payment to hotels – Rs 1,500 per room to house two staffers, inclusive of their food, laundry and taxes for non-star hotels; Rs 2,000 for a room in three-star hotels; Rs 2,500 for a room in four-star hotels and Rs 3,500 for a room in five-star hotels.
According to the circular, the revised rates will have to be paid from June 18. Kohli, however, said that while they had agreed to the new rates, they had to be applied from April and not June. He added that despite requests, the hotel owners are yet to receive their dues – as per both old and revised rates.
Deputy Municipal Commissioner Parag Masurkar, however, said that dues are being paid. “We have processed many dues of those hotels that have submitted bills. Each ward is responsible for payments to be made to the hotels in its zone. Accordingly, payments are being made,” he added.
On the hotels demanding that the revised rates be paid from April, Masurkar said: “Payments are being made as per the revised rate from June 18. Prior to that old rates are being followed as per the circular.”
While last month, the state government had allowed hotels to reopen with 33 per cent occupancy, most have been reporting low occupancy.
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