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The domestic hotel and hospitality sector was severely impacted by the Covid-19 outbreak, with all major 11 markets in the country recording a decline in the Revenue Per Available Room (RevPAR) in the first quarter of 2020.
Mumbai continues to be the RevPAR leader in absolute terms, despite the decline of RevPAR by 20 per cent in the first quarter of 2020 compared to the same quarter of previous year, according to a study by JLL.
However, Bengaluru saw the sharpest decline with a 28.5 per cent of RevPAR, compared to the same period in the previous year. Furthermore, Hyderabad witnessed a RevPAR decline of 13.6 per cent, Ahmedabad and Pune a drop by 13.2 per cent and 13.4 per cent, respectively, in this quarter.
The 11 markets are Ahmedabad, Bengaluru, Chennai, Delhi, Goa, Gurugram, Hyderabad, Jaipur, Kolkata, Mumbai and Pune.
“Glimpses of travel decline started in late February, and by March, the writing was on the wall that hotels would be facing their toughest test since global financial crisis. The high performance of hotel industry in 2019 was followed by a positive start in January of 2020, but the script would change diametrically within last two months,” Jaideep Dang, Managing Director, Hotels & Hospitality Group (India), JLL said.
“On back of halted travel, pressure on hotel occupancies will be felt through the year.”
Coming off a high-performance base in 2019, the Covid-19 outbreak and the containment measures introduced by the Government have resulted in a severe drop in foreign and domestic travel, across both business and leisure travel segments.
Domestic hotel operators dominated signings over international operators with the ratio of 59:41. In terms of inventory volume. Most of these signings took place in January and February 2020 and many of them were fall through from 2019. About 23 per cent of these new signings are conversions of old hotels, the report said.
Moving further, growth and development will be impacted with new hotel signings getting deferred or cancelled for the time being. However, for developers and investors who have cash reserves, the next couple of years will be an opportunist time to invest and build projects on back of reduced construction and finishing costs, it added.
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