industry

Second coronavirus wave crashes hotel chains' recovery hopes


The ravaging second wave of Covid-19 has struck a body blow to the recovery hopes of the hospitality industry, disrupting business across the country just when things had started looking up for hotel chains after a devastating 2020.

Occupancy levels have plummeted to low single digits or nil – except for quarantine or other pandemic-related business – in many states that have imposed lockdowns, and have fallen drastically in other states where case counts are on the rise.

Many hotel chains, which had started unrolling growth plans on the back of rising domestic travel and some momentum in corporate travel, are now preparing for a tough summer. Many believe hoteliers will need direct government support to tide over the crisis.

“It’s like a game of snakes and ladders. And we are back to square one,” said Pradeep Shetty, joint honorary secretary, Federation of Hotel & Restaurant Associations of India (FHRAI).

States that have been generating most of leisure and corporate travel are imposing restrictions to check the virus. On Tuesday, Goa announced a lockdown till May 2. Karnataka is already in lockdown till May 12. Rajasthan has announced a lockdown till May 3. Himachal Pradesh has announced strict entry barriers, while Uttarakhand has imposed curfew in some districts and municipal areas.

Hotel chains that have multiple hotels in metros such as Mumbai, Delhi and Bengaluru, where lockdowns have been announced, are staring at big losses as costs mount with limited revenue.

“For the sector, 2020 was a bad year but 2021 is turning out to be worse,” Shetty said. “Last year, business started picking up after lockdown and drive down destinations did good business. But now with restrictions in place in many cities and states and fear psychosis gripping people due to severity of the second wave, occupancy levels have plummeted.”

Hoteliers said their business has gone back to the levels of the second quarter of 2020 when the country was under a lockdown.

“Our worst fears have come true,” said Rattan Keswani, deputy managing director at

. “Three months ago, we were thinking—what’s the worst that could happen? A second wave!”

Better prepared

The only silver lining for the industry is that it’s better prepared this time.

“Thankfully, we were prepared,” Keswani said. “We are keeping our hotels open and our budget tight.”

Hoteliers said the lessons they learnt in 2020 on managing costs, streamlining of operations and implementation of well-developed protocols to take care of safety concerns of guests will help them tide over this crisis, though a straight path to pre-Covid profitability seems unlikely.

“We will see a short-term impact,” said Rohit Kapoor, CEO, India and Southeast Asia, at Oyo Hotels & Homes. “But as a company we are in a good shape from a cost structure and operational point of view. We used last year to restructure ourselves and that has kept us in a good stead in the current crisis.”

Oyo is rolling out packages for Covid-positive patients who want to isolate at more than 100 hotels in 15 cities. It has partnered with healthcare companies for nursing and hospital care.

But it may take some time for the industry to get back to normal. A major worry for top hotel chains is that international travellers may stay away for some time as India’s image as a safe tourist destination has taken a severe beating during the second wave of the pandemic with foreign media painting a grim picture of human misery, gross mismanagement and misgovernance.

The industry wasn’t a direct beneficiary of the government’s stimulus package in 2020, and many hoteliers feel they might need one soon.

“Hotel chains have been paying all government charges, interest payments and licence fee and levies even at a time when they were making losses,” said Shetty of FHRAI. “It’s high time the government announces some relief measure for this sector.”



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