Sarovar Hotels is expecting to achieve near pre-Covid level RevPar (revenue per rooms available) with the outlook for FY22 remaining “cautiously optimistic”.

The RevPar is calculated by dividing a hotel’s total room revenue by the total number of available rooms in the period.

A continuous upswing in domestic travel — post July — and an expected improvement in corporate travel January travel onwards are expected to be drivers towards pre-Covid level normalcy.

Occupancies, across the board, are currently at “20 per cent below pre-Covid levels”.

According to Ajay K Bakaya, Managing Director, Sarovar Hotels, RevPar is now at 80 per cent of pre-Covid levels with further improvements expected in the festival and winter seasons. However, absence of international travellers continue to be a drag down on.

Post reopening in July, after the second round of lockdowns and localised restrictions, there has been a month-on-month growth in bookings, with September being amongst the best. Preliminary indications point to “robust festive bookings” while wedding bookings too are witnessing an upswing.

Revival of corporate travel

Corporate travel is “re-happening”, especially in Tier-2/3/4 towns where Sarovar has a good presence. Corporate travel is at 50 per cent of pre-Covid levels; but is expected to “pick up further January onwards”. Offices are reopening, “client meetings are again happening”.

Corporate to leisure travel stood at 80:20 in terms of contribution to turnover for Sarovar Hotels.

RevPar improving

“For full recovery in hospitality sector international travel needs to restart. There is an upswing in demand post July and it is expected to continue. But we remain cautiously optimistic of FY22. RevPar is at 80 per cent of pre-Covid levels and should inch-up further if the current trend for leisure destinations persist. Trust me, in Tier 1 cities or places dependent on corporate travel, RevPar is still abysmally low and it is difficult to sustain such low room rates,” he told BusinessLine during an interview.

Leisure destinations, hill stations, resorts, and weekend getaways are major drivers; with staycations being the new demand driver in areas where room rates are low. Kerala and Bengaluru continue to be slow movers.

The Indian hospitality industry recorded a RevPar of ₹1,582 during FY21, the lowest in the last 22 years, according to a report by Hotelivate. This, according to firm, is a 60.8 per cent decline over the last year.

“I am expecting recoveries as a whole not before middle of CY2023 or towards early 2024 when international travel picks up. See these nations too faced brutal Covid waves and the magnification of Wave 2 in India must have dampened travel sentiments for them. So it will take some time for recover. Local designations in Europe will be first to pick up first,” Bakaya added.

Expansion plans

With 100-odd hotels under its belt — across “Sarovar” and “Golden Tulip” brands — the company will add four more being added by October. It has already opened three so far this calendar year. Two of the 100-odd properties are in Africa.

According to Bakaya, Golden Tulip and Sarovar will be prime growth drivers in the 4-star categories focussing on premium and mass-premium ranges.

“We continue to explore Africa as a probable international destination. Nepal is another place we are exploring actively. Some talks have happened in the neighbourhood that include Sri Lanka, Bangladesh and Bhutan, but nothing has materialised,” he added.

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