‘Hotel Industry Will Lose Half of Annual Revenue After Liquor Ban’

Central and state govts will lose around Rs 1 lakh crore of revenue from sale of licences, sales tax, among others.

In a slight modification of its 15 December 2016 order, the court said the ban will be within 220 metres of the highway in towns with population below 20,000. (Photo: iStock)

The food and beverages industry stands to lose half its yearly revenue as a result of the ban on sale of liquor along state and national highways, Kapil Chopra, President of The Oberoi Group told BloombergQuint after the hotel industry met on Sunday to assess the impact of the ban.

Citing data shared by the Federation of Hotel and Restaurant Associations of India, Chopra said the industry will take a hit of around $30 billion, out of an annual revenue of $60 billion, following the Supreme Court’s order.

The country’s top court on Friday ordered a ban on sale of alcohol in restaurants, hotels and liquor outlets within 500 metres from national and state highways.

In a slight modification of its 15 December 2016 order, the court said the ban will be within 220 metres of the highway in towns with population below 20,000.

The apex court’s judgement has the scope to be interpreted in different ways, Chopra said at the press briefing after the industry's meeting.

The spirit of the judgement is correct... but there are some fundamental points, like a liquor vend is about 300*500 square feet. A shop can be relocated. But how do you relocate a hotel, there are millions of dollars invested in it.

Kapil Chopra, President of The Oberoi Group

Also Read: Liquor Ban Could Be a ‘Highway to Hell’ for United Spirits: CLSA

How Will It Affect the Tourism Industry?

According to Arjun Sharma, co-chair of National Committee on Tourism for Confederation of Indian Industry, both the central and states governments will lose around Rs 1 lakh crore of revenue from the sale of licences, luxury tax, sales tax, among others.

The industry has no plan to approach the court, as of now, but has formed four to five groups which will meet state and centre ministers, including Tourism Minister Mahesh Sharma, he added.

A judgement like this will stall future foreign investments into India, said Dipak Deva, managing director of Travel Corporation India, adding that this will negatively impact the tourism industry as well.

The tourism industry, one of the largest job creators in India, will lose around 1 million jobs after the Supreme Court's verdict, Amitabh Kant, chief operating officer of government think-tank NITI Aayog said in a tweet on Sunday.

(Published in arrangement with BloombergQuint.)

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