The Indian hospitality industry, which was the worst-hit by the pandemic, will take at least two to three years to go back to its pre-COVID level operations, according to a credit rating agency ICRA.
The pan-India lockdown led to mass closure of hotels across the country, it said, adding that ‘revenue per available room’ in the premium hotel category fell by over 80-90% in the first quarter with a largely equal fall in occupancy and average room rates. Companies reported an 86% decline in revenues, deep operating and net losses during the first quarter of FY2020 as demand petered off to below sustenance levels, limited to government-mandated quarantine travelers, medics, and some business-continuity workers. Pavithra Ponniah of ICRA said, “Occupancies in the premium hotel category fell by 30-40% to about 8-12% in first-quarter FY2021 while average room rates fell by 30-50% across various markets.’’
Though the central government allowed hotels to be reopened in June with considerable restrictions and safety checks, operations were opened up only in a staggered manner as the state governments took further time to formulate their SOPs.
“Several states have eased inter-state travel requirements like e-passes, mandatory quarantine, and COVID tests. Consequently, occupancies inched up to about 20% in July and August with some demand also originating from drive-to leisure,” the company said, adding that it expects pan-India occupancies for FY20-21 to hit 30-35% and the average room rates to correct by about 20%. But even post the initial phase, the unfolding economic crisis is likely to keep discretionary travel low for an extended period because of which ‘revenue per available room’ recovery is going to be gradual, it added.
News Courtesy: ET
