India’s hospitality industry has raised serious concerns over the latest increase in commercial LPG prices, warning that repeated hikes are pushing hotels and restaurants into a severe operational crisis.
According to Pradeep Shetty, the recent increase of Rs. 993 per 19-kg commercial LPG cylinder has come as a major setback for the sector, especially as it follows consecutive hikes of Rs. 195.50 in April and Rs. 144 in March.
With these revisions, commercial LPG prices have surged by a cumulative Rs. 1,332.50 in just three rounds of increases, significantly escalating operational costs for hospitality businesses already grappling with multiple challenges.
“The latest increase of Rs. 993 per 19-kg commercial LPG cylinder, coming immediately after hikes of Rs. 195.50 in April and Rs. 144 in March, has dealt a severe blow to the hospitality industry,” said Shetty, who also serves as Vice President of Federation of Hotel and Restaurant Associations of India and spokesperson for Hotel and Restaurant Association (Western India).
He said the hospitality industry is currently dealing with supply disruptions, reduced operational capacity and weakened cash flows, making the latest price revision particularly difficult to absorb.
“For an industry where energy costs form a major chunk of operational expenditure, this is nothing short of catastrophic,” he said.
Hotels, restaurants, caterers and large-scale food service operators are among the biggest users of commercial LPG, making them particularly vulnerable to rising fuel prices. Industry stakeholders say small and medium-sized businesses are likely to be hit the hardest.
Many establishments are already operating under pressure with curtailed working hours, reduced menu offerings and alternative cooking arrangements due to inconsistent fuel supply and rising operating expenses.
According to Shetty, the latest hike will further squeeze already-thin profit margins and make operations increasingly unsustainable for many businesses.
“Many have already shut down temporarily. This latest hike will accelerate closures and job losses,” he said.
The impact of rising LPG prices is expected to ripple across the broader hospitality ecosystem, affecting employment generation, food prices, tourism-linked services, events, banqueting operations and related supply chains.
Industry experts warn that consumers could soon feel the impact as restaurants may be forced to revise menu prices upward.
“Due to the recent rise in LPG prices, a 10 to 15 per cent hike in menu prices is imminent. But even that may not be enough to absorb the impact,” Shetty said.
The hospitality sector, which is one of India’s largest service industries and a significant employer, has been navigating a volatile operating environment marked by rising inflationary pressures, higher input costs and changing consumer demand patterns.
Industry bodies are now urging the government to intervene and provide immediate relief to prevent further disruption.
“We urge the government to urgently intervene, roll back this hike and stabilise LPG prices to give the sector some breathing space,” Shetty said.
He warned that without immediate support, the hospitality industry could face deeper financial distress.
“Without immediate relief, the hospitality industry, a key employment generator, faces an existential crisis,” he added.
The latest concerns come at a time when India’s tourism and hospitality sectors have been witnessing strong travel demand recovery. However, rising operating costs are emerging as a major challenge for businesses attempting to capitalise on growing domestic and international travel demand.
Industry stakeholders believe stabilising fuel costs will be critical to ensuring the long-term sustainability of hotels, restaurants and catering businesses across the country.