Party venues go under due to restrictionsThe government has not provided any relief packages to catering service providers, insiders say.
Suresh Lal Shrestha shut down his 20-year-old party venue after he couldn't pay the rent due to Covid-19 closures.
Aradhana Party Palace at Bagbazaar had a permanent staff of 15-16 and employed more than 50 extra persons whenever there was an event.
“Last year’s lockdown hit business hard; and on top of that, the landlord doubled the monthly rent to Rs500,000 just days before the stay-home order went into effect,” the 51-year-old party organiser said.
“He still charged rent when the place was shut down due to the lockdown last year,” Shrestha said.
Aradhana Party Palace flourished due to its prime location, and Shrestha ploughed back his profits to establish three more party palaces. Forced to liquidate his company, he saved barely Rs1.5 million by selling the equipment out of the Rs40 million he had invested initially.
Shrestha plans to shut down another of his party palaces as bank interest and rentals have been piling up while business is zilch. “I am negotiating the outstanding rent with my landlord, and will be closing down another party palace too,” Shrestha told the Post.
“As the wedding season is about to end, we will have to wait till mid-November for business to revive. With a third wave expected to break out during the same time, and the vaccination drive practically stalled, I am not sure about the fate of the other two party palaces either,” he said.
“I am stressed about repaying the bank loan with interest payments accumulating, and then there is the monthly rent for the other party palaces,” he said.
Shrestha said his friends who are engaged in the party palace business are too going through tough times. With no relief package from the government, party palace owners are experiencing the darkest days in their business.
Adequate space to accommodate a large number of friends and relatives at a time, freedom from the hassle of buying goods and arranging manpower, and ample parking space are the reasons why these party venues have been attracting more and more party hosts. As a result, these venues have been popping up everywhere in major cities, said entrepreneurs.
The use of party venues was on an upward trend along with a spreading party culture among the people to organise different ceremonies. The number of party venues had swelled in previous years before the pandemic hit the nation due to vanishing open spaces in one’s locality to organise parties.
The government ordered party palaces and caterers to shut down on April 21 to contain the second wave of the coronavirus by preventing close contact between people. It has been nearly two months, and the government has not issued any rules regarding reopening party palaces.
Last year too, these venues had remained shut for nearly eight months, and resumed operations from November at 40 percent of capacity.
Party palace entrepreneurs were hoping that the government would come up with provisions to allow their business to resume operations, said Krishna Prasad Pandey, spokesperson for the National Party Palace and Catering Federation. But the government retained the restrictions on the sector in the latest prohibitory order too.
"It is wrong to say that organising parties with a limited number of people in the party palace following health protocols will spread the virus as there are many people roaming around in department stores and other public places," Pandey said.
“Imposing restrictions is not the only option, and I don’t think that the virus will spread if we are allowed to do business by following health protocols,” he said.
"The government has placed party palaces under the service sector, but they do not know into which category they fall, especially in the eye of the government with the problems of party palace owners being neglected."
According to Pandey, 99 percent of major social ceremonies like weddings, receptions, upanayana, birthday parties and wedding anniversaries are being conducted in party palaces in recent years.
Besides social ceremonies, official seminars, general assemblies, farewell parties and annual office anniversaries are also being conducted at party palaces.
"A party palace used to conduct 10-12 to a maximum of 20-25 social functions during season with official programmes occupying them during the off season," he said.
Event organisers were using the profits earned during the peak season to offset losses during the off season. But as the party palace business has been down for more than a year, entrepreneurs are in big trouble as almost 95 percent of the party palaces are being operated on rented premises, and 70 percent of them have outstanding bank loans.
"Party palace owners say they have been incurring losses for more than a year now," Pandey said.
Authentic data is not available, but according to party palace operators, many of them have already gone bankrupt after last year’s lockdown. According to the federation, there are 7,000 party palaces associated with the federation which translates into 60,000 jobs.
"More than 100 venues have collapsed already," Pandey said. “The government has not provided any relief packages to party palace entrepreneurs, and we have not been able to help the workers engaged in party palace work,” Pandey said. "And the party palaces that are still in operation are also in a weak state,” he said.