No cheer for hospitality and travel industry this New Year

There is no Christmas cheer for the hospitality industry amidst the Covid-19 pandemic as almost 65 per cent of rooms at Indian hotels and resorts may remain unoccupied during the last week of December, according to industry estimates. Even for travel companies like MakeMyTrip, EaseMyTrip and Thomas Cook, travel bookings have been slashed by 50-70 per cent despite discounts. Currently, hotel bookings at MakeMyTrip for the Christmas and New Year period stand at a third of that in the same period last year, while Thomas Cook has been able to sell 65 per cent of its inventory. EaseMyTrip has seen a steep 35 per cent decline in bookings on a year-on-year basis.

Pavethra Ponniah, Vice President and Sector Head at ICRA, said “We may not even hit 50 per cent of occupancy on a year-on-year basis and ARRs (average room rents) in October were 30 per cent down. We expect it to remain the same for December as well.”

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The advance bookings for hotels like Lemon Tree “are weak” whereas for Sterling resorts, the occupancy is higher at resorts near metro cities. Oyo Rooms has been able to book only 40 per cent of its rooms for December.

Rattan Keswani, Deputy Managing Director, Lemon Tree, said that while demand at the moment for the hospitality sector is extremely weak, it was unfair to forecast if it would pick up or not because of the looming uncertainties.

“Even before Diwali, we had forecast that it would pick up to a certain extent but with the changing rules of quarantine for different states, and the second wave of Covid-19 in others, things became difficult for us. Now with several destinations having compulsory RT PCR test, it is again an uncertainty. However, we have seen a few green shoots in the leisure and staycation segments.”

Ajay Bakaya, Managing Director of Sarovar Hotels & Resorts, said business is down to 50 per cent of last year same time. However, he is confident of having an average of 60-65 per cent of Sarovar’s rooms occupied closer to New Year’s eve. “There isn’t a waiting list this year unlike earlier. So people are likely to book closer to date when they have clarity of plans at their end.”

The hospitality players may not even see a correction in the ARRs as they continue to remain 30 per cent lower compared to the same time last year.

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For Oyo, there has been a 20-25 per cent drop in rates of premium segments across business and leisure locations. According to Ramesh Ramanathan, CMD of Sterling Holiday Resorts Ltd, December has been a traditional holiday season and “we would expect a growth in December in the range of 15-17 per cent.”