Category Archives: Hotels

India’s hospitality industry has declined sharply in the first quarter of 2020, as the COVID-19 outbreak impacts various segments of the sector. A recent report by JLL states, “Investment action will likely get deferred as the sector rebuilds itself after containment of COVID-19, however, we estimate that more assets may fall in the ring for sale in the latter half of the year.” While 2020 started with a strong deal pipeline estimated at about US$ 1 billion worth of tradeable assets, JLL’s findings reveal that growth and development is likely to slow down in the next two years and projects under development will likely get delayed and raising development finance will also become more challenging.

Anuraag Bhatnagar, COO, Leela Palaces, Hotels and Resorts, believes in the resilience of the hospitality industry. He says, “We are very lucky to be working in a country like India where we have extremely robust domestic economy. People in India fundamentally like to travel, experience new destinations and go to new resorts. They probably would want to ‘unlock’ themselves after this lockdown. We will see some business coming in July and August, we see a sense of ‘near normalcy’ coming in in Q4 (OCT-DEC).

InterContinental Hotels Group (IHG) has signed a management agreement to bring the Crowne Plaza brand to the historic city of Lucknow, in northern India. Pascal Gauvin, Managing Director, India, Middle East and Africa, IHG, explains, “The signing underscores confidence in the industry despite challenging times. In India, the sector is primarily driven by the domestic travel, which is expected to recover first once the crisis is behind us and it is safe to travel again. Domestic travel has remained a key growth driver for our business in India and we will continue to expand our presence meaningfully to cater to the needs of our guests in the country.”

In its latest General Manager’s Sentiment Survey, HVS ANAROCK has reported that over 60 per cent of the General Managers (GMs) are preparing to open their hotels as soon as the lockdown is lifted this month. The survey suggested that upscale business properties are expected to open sooner than others. The anonymous online survey captured responses of 160 GMs across branded hotels PAN India. 74 per cent of the responding GMs were from the business hotels while rest 26 per cent represent leisure hotels.

PP Khanna, President, Association of Domestic Tour Operators of India (ADTOI) during the 2nd TravTalk Digital Tourism Conclave said that it is important for states, hotels and travel agents to come together and do joint promotions for domestic tourism and boost it further. “Both states and hotels should look towards doing joint promotions with the travel agents to boost domestic tourism in India. M!CE is a big segment and according to 2018-19 data, this segment earned a revenue of Rs25,000 crore. With new ventures like banquet halls, trade fairs and facilities in cities like Delhi coming up, it is expected that by 2022, this revenue could double to the tune of Rs40,000-50,000 crore. All the states should consider opening new M!CE facilities.”

The recently-released HVS ANAROCK monthly newsletter titled ‘Hotels & Hospitality Overview’ reveals that among five key Asian markets – India, China, Malaysia, Thailand and Singapore – India had the lowest y-o-y decline in hotel occupancy for March at 52.9 per cent, while China witnessed the highest at 65.4 per cent. Malaysia, Thailand and Singapore witnessed occupancy declines of 64.7 per cent, 62.6 per cent and 53.6 per cent, respectively, for the said period. The report suggests that occupancies across hotels in key Indian cities witnessed a sharp decline, as travel restrictions intensified and India went into lockdown towards the end of March 2020.

Kerrie Hannaford, Vice President Commercial, Accor (India & South Asia), says that hotels should work along with travel agents as they are experts in packaging the right products, and together they shall strive towards offering a value proposition and unique experiences to customers. Speaking at the 2nd TravTalk Digital Conclave, she said, “What we need to do collectively, with our consultants, is to become absolute experts in offering something unique and bespoke. There must be those ‘surprise & delight’ moments for our customers. The perception of value for money is going to be crucial. It is also important to know what unique experiences we can give to consumers, whether they are from the same city or have travelled from another end of the country. How the travel agent community helps us to establish that uniqueness is important, so that we can sell something to a consumer. As we step towards that level of recovery, that’s what people are going to want. They want to be able to ‘feel’ the value and it doesn’t matter whether it is a $50 hotel or a $100 hotel. They only want to ensure if they are getting that connectedness, that personalisation and as an industry, we need to come together and build that confidence for consumers.”

As per HVS revised estimates, RevPARs in the organised hotels segment are expected to decline by 58% in 2020 due to COVID-19 shock. Mandeep Lamba, President- South Asia, HVS ANAROCK, says, “The industry has not witnessed such an unprecedented decline in RevPARs in the last two decades, since HVS has been recording this data. We should now use the learning from this disruption and plan for the new realities beyond COVID-19, keeping in mind that we need to better prepare ourselves for future events of a similar or even more vicious impact.”

Boutique advisory and analytics firm VIDEC has launched a Global Travel Staffing Barometer, an online resource to monitor the impact of COVID-19 coronavirus on the travel, tourism and hospitality industry. The free-to-use tracker offers industry insights on the state of terminations, furloughs and pay-cuts, across industry categories and countries, collated from various sources and updated on daily basis. Virendra Jain, Cofounder and CEO, VIDEC, says, “The travel industry is crumbling before our eyes with more than half a million lay-offs in less than a month. Amid the global spread of the pandemic, companies of all shapes and sizes – from the billion-dollar valued to start-ups – are trimming costs, disbanding, and letting go off their most precious asset, the workforce. The Global Travel Staffing Barometer quantifies the discharged staff and aims to become the central hub for tracking the loss of human resources, and in time offer the first glimpses for the road to recovery for the travel industry.” According to this tracker, more than 500,000 workers in the travel, tourism and hospitality industries have been furloughed in the last three weeks.

Taking measures to mitigate COVID-19 impacts on the industry, the Rajasthan Government has extended a helping hand to hotels and tour operators registered in the State. According to an order by the state government, it has been decided to reimburse State Tax due and deposited by hotels and tour operators registered under Rajasthan Goods and Services Tax Act, 2017. The order for a reimbursement of State Tax due and deposited to hotels and tour operators will come into effect from April 1 and will remain in force till June 30. ‘State Tax due and deposited’ means the amount of State Tax (SGST) paid through debit in the electronic cash ledger account maintained by the enterprise after complete utilisation of the available amount of input tax credit of the SGST and Integrated Goods & Services Tax (IGST). This order will be applicable for taxable persons registered under the category of hotels, heritage hotels, resorts and tour operators. However, it will not cover stand-alone restaurants and clubs. Beneficiaries will be entitled for reimbursement of State Tax due and deposited in the operative period in the manner as may be prescribed, provided no reimbursement under this order is available for SGST to be leviable and paid on rental or leasing services, including own or leased non-residential property.