HRAB Chairman Sonam Wangchuk

Hotels seek deferment of loan beyond June 2021 till the business bounces back

According to the Chairman of Hotel and Restaurant Association of Bhutan, Sonam Wangchuk, hoteliers will continue to seek support, assistance, and guidance from financial institutions, as well as the government, in obtaining loan deferments till the business bounces back.

He said that even if tourism begins, interest waivers, loan deferments, and EMI extensions should be granted as the hoteliers will not be able to pay anything like they would in normal times for at least the next two to three years.

“We’ve asked the TCB to assist the hotels in writing to RMA, requesting a loan deferment and interest waiver. We’ve also written some letters to financial institutions asking them to reconsider our loans and interest once we are out of March, because we’re paying 50% interest till now, so we’ll have to pay 100% in April, and we’ll have to pay EMI in July. Therefore, we’re seeking a waiver for the hotel and tourism industries in particular,” he said.

He added, “Secondly, we’re talking about employees in the hotel industry, who have taken out consumer and personal loans and are completely reliant on the hotel’s salary. Requiring employees to repay these loans would be a burden. So, we’ve asked for assistance for hotel employee as well.”

He said that they believe that the government and financial institution should look at it from an industry perspective, and while the pandemic has affected everybody, one must look at which industries have been particularly hard hit.

The only way forward is to open up tourism, but even with that, hoteliers are concerned about how many tourists can actually begin to arrive in the country. According to the Tourism Council of Bhutan’s survey, it will take another five years to return to the usual tourist pattern of 2019, so even if tourism opens tomorrow and the cases in neighboring countries increase, and the borders are opened, it will take another five years.

Hoteliers are grateful to His Majesty for granting relief.  “The Thrown has bestowed the interest wavier upon us as a blessing. It has been extremely beneficial to us because there is no tourism in place and the border is closed, preventing inbound flights and tours,” he said.

He also said that due to the hotels’ lack of business, the interest waiver has proven to be a lifesaver, allowing them to at least wait until the situation improves, the business recovers, and they are in a position to begin paying their loan installments.

“We are aware that providing us with an interest waiver has burdened the government and financial institutions. Even if this is not the case right now, hoteliers have been able to hold on to their companies, and we’ll wait for a better opportunity and circumstance to relaunch our products,” he said.

He said until now, deferment has been issued to the general public, but they don’t know what RMA and financial institutions can do now.

He said that there is a misconception that hotels profit from quarantine facilities.

“We must state unequivocally that we have decided to keep our hotels open as quarantine centers at a very low rate that was negotiated with the government, and the government has set the rate solely to cover the operating costs of the quarantine centers. However, at no point in time will this expense provide us with profit,” he said.

He added that this is simply to ensure that the hotel’s owners’ pockets are not emptied when it is used as a quarantine center. And, of the 500 hotels, only about 100 are used as quarantines, with the rest remaining closed.

“Just because some hotels are being used as quarantine and are thriving does not mean that everyone else is,” he added.

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