Covid wave two impact: Hotel sector sees little room for hope

Summer is a crucial period for the hotel industry as it earns a big chunk of revenues from the domestic leisure and wedding business. But with the country being hit by the second wave of Covid-19, the industry is on the back foot again. Even if trends start reversing from the second quarter, industry players believe that business will remain subdued throughout the current fiscal.

To cope with the situation, the industry has been asking State governments to give waivers on property tax, liquor licence fee, electricity charges and municipal taxes, among others, to help the sector tide over the current crisis. Experts pointed out that the smaller hotels have been more adversely impacted and it may take the hotel industry two years before it can see full recovery.

Learnings from last year

According to Gurbaxish Singh Kohli, Vice-President, the Federation of Hotel & Restaurant Associations of India, “The hotel industry had been witnessing occupancies in the range of 8-12 per cent over the past few months. In the case of restaurant industry, nearly 50 per cent recovery in business was seen by the players. However, nearly 30 per cent of the restaurants have already permanently shut down and due to the second pandemic wave we will see more restaurants shutting down. Employees associated with the hospitality industry are now looking at other options as they do not see it as a sustainable employment opportunity any more.”

Hard-hit hotel industry expected to touch pre-Covid levels in next 2-3 years : ICRA

Ajay Bakaya, Managing Director, Sarovar Hotels, said, “We were seeing some recovery in the November-February period. March was flat and April has been devastating. We believe April and May will be a complete washout. We are hoping trends reverse in June but it’s difficult to say when we might start seeing recovery. We are getting some revenues from small pockets such as Puducherry, Goa and Mashobra but all the city hotels are down and out.”

Unlike the national lockdown, hotels are continuing to operate but following safety protocols and local restrictions. They are also banking on learnings from last year in implementing strategies to mitigate the impact in terms of fixed costs. “One of the key learnings from last year has been that it is counterproductive to shut down a hotel as that leads to spiralling costs. Hence, our hotels are operational with some staff to keep the machinery running,” Bakaya added.

Hotel occupancy to remain low till FY24

“...The current situation will potentially cause deep and widespread loss of livelihoods amid mounting business disruption. We have ensured that learnings from last year are implemented with speed. These have become a permanent part of our business operations,” said Zubin Saxena, Managing Director and Vice-President Operations, South Asia, Radisson Hotel Group.

Online food delivery

Sarbendra Sarkar, Founder, Cygnett Hotels, added, “It has been over a year since the pandemic hit us! We were just slowly beginning to recover, and things were looking as it was the start of the holiday season and people were beginning to make vacation plans when the second Covid wave hit the country. However, we feel we are better prepared to deal with the situation than last year.”

Players like ITC Hotels have stepped up focus on the online food delivery business. Anil Chadha, COO-ITC Hotels, said, “While ITC Hotels’ “WeAssure” protocol brings elevated health and hygiene norms at the properties, our online food distribution initiative, “Gourmet Couch” continues to deliver wholesome food high on the goodness of local ingredients and seasonal produce, through food aggregator platforms.”

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