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India’s hospitality industry to reach 2019 levels by end of Q4 of 2021 fiscal, says report


NEW DELHI: India’shospitality industrywitnessed one of the lowest performing years during thecurrent fiscalof the decade and the country’shotelsare likely to reach 2019 occupancy levels by the end of fourth quarter of fiscal 2021, as per a report titled “Indian Hotels PerformanceH1 2020-2021″ byNoesis Capital AdvisorsandNgage Hospitality.

As per the report, rooms rates will take more time to reach the same levels of 2019 as the competition amongst the branded hotels is set to increase as more independent hotel owners and operators will resort to branded chains for operations of their properties.

As per a survey conducted by Noesis Capital Advisors, during the lockdown, 73% of customers were looking for a safe and hygienic environment for their next vacation for which they were ready to pay an additional 15-20% room rate for a safe and hygienic environment for themselves and their family. Looking at this opportunity and to beat the market sentiments, independent hotel owners are tying up with organized/branded chains to capture demand according to the report.

“We may witness many brownfield conversions across major cities of India as independent hotel owners have also realized the importance of tying up with a branded chain and the share of branded chains is set to increase from 16% in the pre-Covid era to 20-22% in the medium term,” the report stated.

The report stated that though travel restrictions have been lifted completely, the restrictions on room sales for hoteliers are still there. “The way government has eased the restriction on the industry, we can expect the restrictions on room sales also to be lifted soon,” it added.

Demand for staycations and weekend getaways is expect-ed to rise significantly over the next two quarters according to the report, with the work from home continuing and room demand across leisure destinations is expected to pick-up pace.

“The leisure destinations will not only cater to the rising demand from travelers but so-cial events and weddings are also expected to gain pace across these destinations. People who hosted events at standalone banquet spaces will also shift to branded hotels to cater their needs,” the report stated.

These events with restricted guests are expected to move to destinations which will provide them proper safety and hygiene standards.

Shutting down international borders and imposing restrictions to travel within the country following the Covid 19 pandemic is expected to lead a blow of $9 billion to $12 billion to the Indian tourism industry as per the report.

The report said with overall one million rooms of which 16% are organized, the average occupan-cy for India’s hotels in 2019 was 65%. However, with the imposed lockdown, restriction on weddings, and the MICE business shifting online, the demand saw a 50% decline over 2019.

With the relaxation of lockdown in India, the demand is expected to start picking up in the next two to three quarters.

Source

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