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Here’s why India's biggest hotel chain operator, a large car maker and airline would like to lose 'elite' tag

May 19, 2020, 12:50 IST
Business Insider India
Spicejet counter at Jai Prakash Narayan International Airport in PatnaBCCL
  • Sitharaman on May 13 said that the definition of MSME will be changed to allow for relatively bigger companies to avail the benefits of cheaper and priority loans.
  • And now industry leaders want more ‘inclusions’ in the MSME segment.
  • From Spicejet to OYO to Mahindra, industry players are rooting for their partners to get the MSME tag.
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“Airlines should not be considered as an ‘elitist’ service. The way in which buses and trains are creating a safe environment, airlines can do too.” said Ajay Singh the owner of the ₹2,400 crore SpiceJet, one of India’s two publicly-listed airlines in a recent interview with India Today..

Singh desperately wants flights to be operational again and the poor prospects for the aviation industry has made him pine for more government support.

Having said that, Finance Minister Nirmala Sitharaman had announced initiatives for the aviation sector like shorter routes to save fuel, setting up a maintenance, repair and overhaul hub in India that will bring costs down for airlines like SpiceJet and IndiGo. But it’s not enough for the anxious Singh starting at the dire outlook for the entire aviation industry.

Singh is not alone in wanting the industry he represents to lose the ‘elite’ tag

Founder of India’s biggest hotel chain and startup unicorn OYO, Ritesh Agarwal in a recent discussion on a news channel asked Union Minister Nitin Gadkari to bring in small hotel operators and early stage startups under the micro, small and medium enterprises (MSME) segment.

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The tourism industry has been severely impacted from the coronavirus pandemic as travel has come to a complete standstill. The travel and tourism sector in India is expected to lose ₹5 lakh crore and see job cuts for over 4 crore people, according to Confederation of Indian Industry (CII).

The industry body also estimates that “branded hotel groups are set to lose as much as ₹1.1 lakh crore, online travel agencies ₹4,312 crore, tour operators (inbound and domestic) ₹25,000 crore, adventure tour operators ₹nearly 19,000 crore and cruise tourism ₹419 crore.”

OYO’s business thrives on how well the partner hotels perform— not just in terms of the number of guests but also how much money they can make. Sitharaman had also said that the definition of MSME will be changed to allow for relatively bigger establishments to avail the benefits of cheaper, priority-sector loans.

Similarly, Pawan Goenka, the Managing Director of Mahindra and Mahindra, one of India’s top five car makers sought to define smaller auto dealers as MSME, a demand earlier made by car dealers who make less than ₹100 crore a year.

As industries face the heat from the coronavirus pandemic, they are struggling to find ways to survive. And even though the travel, tourism and auto sector have been hit – Sitharaman’s 5-day, ₹20 lakh crore stimulus package failed to help out these industries.

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