Hospitality sector may see normalcy in 12-18 months

The hospitality industry expects normalcy to return in the next 12-18 months as hotels across the country are opening in a staggered manner.

The sector’s revival largely depends on the opening up of the travel and tourism industry and international travel.

Hotels across several states opened their doors for tourists on Monday even as the Covid-19 continue to wreak havoc on the lives throughout the country.

In the near term, the industry expects 30-50% occupancy levels.

“Not all states have allowed opening of hotels. It will take at three months for the industry to settle down. By September, if international air travel opens up, we can expect around 50% occupancy levels. In the month of June, the occupancy levels could be in the range of 5-10%,” Jyotsna Suri, Chairperson and Managing Director, The Lalit Suri Hospitality Group told DH.

She said the average occupancy rate before the pandemic hit the country was in the range o 75-80%.

“Normally, the fourth quarter of the year is a best quarter. But during the January-March quarter of fiscal 2020, we started witnessing room cancellations by February itself. To reach this kind of occupancy, it will take more than a year,” she said.

The absence of international air travel, advisories by several countries against travelling to India, usage of online meetings by the corporates and very low level of business trips are the reasons for drastic fall in room occupancy across hotels, she said.

Vineet Varma, Executive Director & CEO, Brigade Hospitality Services Limited said the company has opened six out of its seven hotels on Monday and witnessed lukewarm response from customers.

The company expects some business in the next two months. “We can expect decent business to happen only after the international air travel is opened up. The overseas travellers account for 60% of the customers for the hotel industry. With the business trips also not happening, we are banking on the domestic leisure travel to start,” he said.

Another major reason for the tepid response is night curfew and bars cannot be opened late night. The company is also not keeping its restaurants open and only coffee shops are functioning, he said.

As a result, the company will be going slow on its expansion, he said and added that its new hotel near Hoskote is ready for inauguration in August.

However, opening of its second hotel in Mysuru and another one near international airport will be pushed by a few months. Majority of the 160 general managers across branded hotels polled by HVS and Anarock stated that the occupancy will range between 40% and 50% during the fourth quarter. Business hotels are likely to see quicker recovery in occupancY.