Travel and hospitality industry expects growth recovery this year

The Indian aviation, travel, and hospitality industries are expecting a fast-paced recovery in travel by the second quarter of FY23 for domestic travel, even as they are cautious about the impact of the third wave of the coronavirus-induced travel restrictions.

After a two-month rally in the first week of 2022, domestic air passenger traffic fell below the 3,00,000-level for the first time since November last year. According to HVS Anarock’s report, the hotel industry’s occupancy grew only marginally on a year-on-year basis in November 2021. Credit rating agency ICRA too maintained a negative outlook on the industry. It had witnessed about 27 downgrades in the hospitality sector since the start of the pandemic.

‘Cautiously optimistic’

However, industry players continue to remain cautiously positive.

Vinod Kannan, Chief Excecutive Officer, Vistara believes that confidence in air travel had been steadily growing over the past six months resulting in a consistent return of demand, specifically in the domestic market.

Ronojoy Dutta, Chief Executive Officer, IndiGo, said that families in India are dispersed all over the country and the globe and Indian businesses are transacting business all over the world which is boosting domestic travel and interest in inbound travel for medical tourism or education tourism too seems to be on the cards.

But the new Omicron variant has brought back some uncertainty. Indian airlines have witnessed a slight dip in bookings, including cancellations.

According to Prashant Pitti, co-founder of EaseMyTrip, the decline is only marginal for now. “Whatever the sentiments are, numbers are the ultimate truth and from a data perspective, we see only a slight dip of 10-15 per cent in comparison to the last wave. So, people are scared but not as scared as wave one or two,” he explained.

He further added that provided the Omicron virus doesn’t flare up for a long period, he expects a decent growth in the gross booking revenues. In 2021, EaseMyTrip’s total gross booking revenue (GBR) was ₹2,100 crore. “Without the Omicron, we were looking at crossing a GBR of ₹3,500 crore.”

ClearTrip too has seen a recovery in the last few months 2021. “The pandemic has resulted in a large pent-up demand for travel. We expect this recovery in travel to continue into 2022 and believe that bookings will peak in the second and fourth quarter of next year. International travel may recover in the second half of the year depending on how the pandemic evolves,” Prahlad Krishnamurti, Chief Business Officer, Cleartrip said.

Other players echoed Krishnamurti’s thoughts on recovery.

However, industry bodies like Hotel & Restaurant Association Of Western India (HRAWI) and the Hotels Association of India said that the players are in a wait-and-watch situation.

HRAWI has high hopes from the Union Budget for reliefs, whereas the Hotel Association of India is banking on streamlined Covid-19-related SOPs.

On the upside, hotel industry experts are looking at consolidation. Whereas, the aviation industry is looking forward to Akasa, Jet Airways 2.0 and the privatisation of Air India.

Existing players like Vistara and IndiGo are looking at grabbing opportunities while keeping costs lower. SpiceJet is looking at some respite from the Boeing compensation and GoFirst is looking at its IPO.

OTAs like ClearTrip are looking at acquiring more customers, whereas players like EaseMyTrip are looking forward to acquiring companies to gain market share.

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