Operated by Nepal’s highly successful and bold woman tourism entrepreneur and president of Hotel Association Nepal, Shrijana Rana, Hotel Annapurna, Nepal’s premier five star hotel, has become the first to surrender before the COVID-19 pandemic.
With no sign of early recovery and revival of tourism industry any time soon and resistance from trade unions, Nepal’s hospitality industry has been facing a big financial burden. Given no relief and recovery packages from the government, more hotels will announce similar actions.
“Annapurna is just the beginning. Many other hotels will follow suit in the coming days. With resilient trade unions in no mood to compromise on their benefits, hoteliers have no option other than to shut down their shops,” said a renowned hotelier.
In the protracted lockdown following the COVID-19 crisis, Hotel Annapurna, the oldest of five star hotels of Nepal, has decided to shut down the hotel as it has not been able to afford for the employee’s expenses, according to sources.
Following the lockdown announced by the government in March due to the COVID-19 pandemic, hotels have been suffering badly.
“Many hotels in Thamel area have already been closed down and some more big hotels will close down like during the Maoist insurgency in 2005/06 given the uncertainty over the revival of tourism industry,” said a hotelier on condition of anonymity.
With the decline in tourist arrivals, the hotels cannot afford the expenses of the employees any more. During the last nine months, the hotel has not earned anything. As there is no regular income to pay the staff salary, the management has reportedly decided to lay off all the staffers and close the hotel.
The hotel has reportedly asked all the employees to tender their resignations and clear their accounts. Following the notice of hotel management some of the staffers have already resigned. “The management has asked employees to resign and clear our accounts.”
Out of 300 hundred staffs, more than 50 staffs reportedly tendered heir resignation and the management has already cleared their dues.
Shreejana Rana, executive director of the hotel, told The Himalayan Times that the hotel has been facing losses for the last nine months and there is no hope to recover the losses any time soon.
“There is no chance of any tourist coming during this pandemic and the hotel cannot keep bearing expenses and accrue losses. Thus, we have asked the staffers to resign,” she told the daily.
Rana further said that the hotel might be closed temporarily.
Since the hotel will not be in operation for a certain time, the management team will use that period to come up with new ideas to resume operations in the future. However, for now the hotel will remain closed.
Hotel Association Nepal (HAN) has stated that it is trying to sign an agreement with the workers’ union regarding layoffs as most of the hotels are unable to pay wages at the moment.
At a time when a skillful entrepreneur like Rana cannot run the hotel and compromise with labor to reduce the financial burden, there is a very little chance for other hotels to continue their business without income.