Chennai: The demonetisation initiative may slow down the Indian hospitality sector initially and as per industry estimates, the Indian hotel industry revenues are likely to grow by 9-10 per cent during 2016-17 fiscal.
The booming hospitality sector, depending on discretionary spends, has been impacted in the short term due to demonetisation, leading to decrease in income in the week gone by, and home deliveries, which have dipped since Nov. 9.
According to the latest National Restaurant Association of India (NRAI) report, the food service industry is targeted to reach a revenue target of Rs 4.98 trillion by 2021. It also contributes a significant percentage to the Gross Domestic Product of the country.
Demonetisation allows genuine players to have a level-playing field. The black money scourge was affecting the hospitality industry by allowing short-term players to enter the market on long-term gains.
Branded chains, which invest in proper infrastructure, backend, logistics and employees, end up being affected by the price sensitivity of the market thanks to these new entrants, according to Rahul Singh, Founder & CEO, The Beer Café and Honorary Secretary of NRAI.
All said, small hotels and eateries stopped accepting the Rs 500 and Rs 1,000 notes denomination and those which earlier preferred the cash economy appeared to accept credit or debit cards for dining.
With the ATMs dispensing Rs 2,000 note many find it difficult to obtain small change and as a result there has been a decline in the eating habits too.
According to a hotelier the Centre’s decision has adversely affected the hotels and restaurants as people don’t have access to cash for spending.
