A significant number of hotels and restaurants in Ernakulam district remain closed, unable to recover from a relentless surge in commercial liquefied petroleum gas (LPG) prices. According to the Kerala Hotel and Restaurants Association (KHRA), out of approximately 7,000 registered establishments in the district, around 1,750 shops have been completely unable to reopen.
Background of the Crisis
An unprecedented hike of Rs 993 per commercial cylinder on May 1 forced nearly 60% of hotel and restaurant owners across Kochi to temporarily shut shop. While over half of those businesses have managed to resume operations, a critical one-quarter of the industry remains frozen.
"Nearly 25% of the hotel owners are yet to reopen shops. While shortage of migrant labourers is a factor, sharp rise in daily operational expenditures is continuing to affect these establishments which remain closed," said KHRA Ernakulam district secretary Rahim K T.
Impact on Pricing and Customer Base
Hotel and restaurant owners are facing a difficult situation. They had adjusted their menus upward during earlier fuel hikes and fear that another increase will permanently drive away regular customers. "Even now we are selling a cup of tea for Rs 15. How can we increase it further?" said Shibin E K, a hotel owner.
The middle class, which forms the lion's share of the local customer base, has not seen a rise in disposable income, he pointed out. "Otherwise too, we notice a distinct pattern. Families dine out during the first half of the month, but business plummets by mid-month as household budgets deplete. Many hotels, located near railway and bus stations, rely on regular commuters and can't increase price and risk losing them," Shibin added.
Broader Cost Increases
The steep cost of gas is aggravated by a broader rise in essential ingredients. Vegetable and commodity prices have climbed steadily over the past month, compounded by a minimum Rs 4 hike on milk and dairy products.
On Monday, commercial LPG prices were hiked yet again, by Rs 46, driven by West Asia supply anxieties. This marks the fourth commercial hike this year. While domestic cooking gas remains subsidised, a commercial 19-kg cylinder now costs Rs 3,131.
Timeline of Price Hikes
- March 7: First hike of Rs 115 per cylinder
- April 1: Second hike of Rs 195.5 per cylinder
- May 1: Steep hike of Rs 993 per cylinder
- Recent: Additional hike of Rs 46 per cylinder
The cumulative effect has left many small and medium-sized establishments struggling to survive, with no immediate relief in sight.
