Gujarat: Hit hard by Covid lockdown, restaurants and hotels snap ties with Swiggy, Zomato

Representatives of over 122 hotels and restaurant owners met in Navsari on September 14 to discuss the commission charges of the delivery apps and resolved to discontinue their association with popular apps such as Swiggy and Zomato.

In a clear indication of the stress that the Covid-19 pandemic has caused restaurants, Hotels and Restaurant Association of Navsari has decided to discontinue listings on popular delivery apps such as Zomato and Swiggy.

The association claimed that the companies have raised commission charges, thus causing a dent to the earnings of the restaurants at an already fragile time — a charge denied by the delivery partners.

The move, however, is only a reflection of the struggle that the industry is going through with several restaurants shutting shop in major cities of the state.

It was in mid-May that the Union Ministry of Home Affairs (MHA) allowed restaurants to reopen, beginning with takeaways and gradually to full-fledged dining by July, with strict adherence to the safety protocols. However, months later, only 50% of restaurants in top cities in Gujarat have reopened.

Representatives of over 122 hotels and restaurant owners met in Navsari on September 14 to discuss the commission charges of the delivery apps and resolved to discontinue their association with popular apps such as Swiggy and Zomato.

Talking to the Indian Express, Navsari Hotel and Restaurant Association president Suresh Pandey said, “Both the companies should take our consent before raising the commission charges. They also delay transfer of payment, which earlier used to be done within 48 hours. The lockdown has hit us hard and we are down to 30 per cent business. Many hotels and restaurants are still shut. With 25 per cent commission charges by delivery apps, it would be difficult for us. We are seeking their explanation.”

Denying the allegation, an official of Zomato said, “We began delivering in Navsari in April 2019. We have a contract with more than 180 hotels, restaurants, hawkers and home kitchens. We raised commission charges by 2 per cent for restaurants and eateries who joined us post-lockdown and not for existing partners. The total commission with the raised amount is 22 per cent.”

The executive added that the initial commission amount was “subsidised” for three months during the launch and later increased to 20 per cent, without the taxes.

In Surat, Ahmedabad and Vadodara, there is no joint protest against the delivery apps as takeaways are big business avenues for restaurants right now. In all three cities, nearly 50 per cent of the hotels are yet to reopen, while many have shut down for the good and put up banners of the spaces being available for lease or rent.

As per the Southern Gujarat Hotels and Restaurants Association, there are 150 registered members with the association in Surat while over 400 exist in Surat city.

Association president Arun Shetty said, “Many hotels and restaurants run from rented premises, with monthly rent running upto Rs 1.5 lakh. Most of them are closed while few running from their own premises are functional. In South Gujarat, hotels and restaurants faced losses worth around Rs 400 crore due to the pandemic. They also face labour shortage. With no transport facility, workers from Uttar Pradesh, Bihar, Madhya Pradesh and Odisha are struggling to return to Surat.”

Shetty also blamed the increased inspection from administrative and police departments as part of the Covid-19 protocol a deterrent for restaurants to reopen.

A restaurant owner, who shut a prominent outlet on OP Road said, “I faced heavy losses and tried to reopen but gave up on the idea because the penalty for any mistake during this time is not worth the stress. My restaurant serves non-vegetarian food as well and I did not want to suffer further losses.”

In Vadodara, several prominent eateries have shut down, especially in high-end commercial complexes and malls. Owner of a celebrated Gujarati Thali outlet at Race Course said, “I have retained the property for a few more months as I can afford the rent as of now. Most of my staff have returned their hometowns… Also, we don’t think Covid-19 guidelines can be followed in a Thali outlet. People come in groups as the utensils are shared a lot and the serving staff is always in close proximity to people.”

Aftab Chakra, whose family has been running the Millennium Restaurant in Fatehgunj for over five decades has opened up to 70 per cent capacity and is joyous about “three great weekends”.

“We are big on takeaways right now. Dining in is also picking up with necessary precautions. We have regained almost 70 per cent of our pre-Covid clientele. I have hired helping hands for weekends as most of my staff has not returned yet,” said Chakra.

“Many of the restaurants that have closed were of people having other businesses as well… But for most of us, this is our bread. We have to have the courage to go through this phase because we are dependent on it,” he added.

For cloud kitchens, run mostly by the delivery apps, the lockdown has meant end of the story. Restaurant owners also speak of disassociation with Swiggy app, which decided to increase its commission but they have stayed on with Zomato.

A restaurant in Makarpura, known for its vegetarian delights, said, “We removed our listing from Swiggy because they were arm-twisting the restaurants citing that people prefer that app due to hefty discounts but it doesn’t work for the business.”

Chakra added, “I turned a Zomato exclusive partner after Swiggy created issues over commission rates.”

But for cuisine-specific hotels and takeaway shops, business has picked up from where they left off, almost. On Vadodara’s Salatwada street, the queue for shawarma, haleem and tandoori takeaways at local joints has returned. Same with the famous omlette joints or Vadodara’s signature Sev ussal outlets.

In Ahmedabad, 35 per cent of the restaurants that closed during lockdown have not yet reopened. “There are about 10,000 restaurants in Ahmedabad and 35 per cent of them are yet to reopen… If you look at the Sindhu Bhavan road, Gurukul or SG road, about half of the restaurants are still closed,” said Narendra Somani, president of Hotels and Restaurants Association (HRA), Gujarat.

Somani said the business has, however, improved for those who have reopened. “Business is much better than what it was in July and August. We are able to touch 60 per cent of our business that existed before the Covid lockdown. About 80 per cent customers opt for dine-in, while 20 per cent prefer takeaways,” Somani added.

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