Category Archives: Hotels

The Indian hotels sector has come to a standstill in the last one month, with most of the hotels partially or completely shut. HVS has revised previous estimates of the overall revenue loss that the industry will face in 2020. The overall revenue of the Indian hotels sector is expected to decline by approximately INR 90,000 cr in 2020, reflecting an erosion of 57% compared to last year. RevPARs in the organized segment are expected to decline by approximately 58%. Occupancy is expected to decline by 31.6 per cent. In the organised sector the loss is expected to be INR 40,309 cr; in the semi organised sector the loss is expected to be INR 8,379 cr and in the unorganised sector it is expected to be INR 41,126 cr. The source for the above data is HVS Research as on 17 April 2020. The industry has not witnessed such an unprecedented decline in RevPARs in the last 2 decades, since HVS has been recording this data. The unorganised segment, which is 10 times the size of the organized segment, is also anticipated to witness a similar quantum of decline. COVID-19 is a disruption that nobody anticipated, but it is now time to use the learnings from this disruption and plan for the new realities beyond COVD-19

In a bid to analyse the impact of the Covid-19 crisis on staff salaries across the industry, TravTalk has initiated the ‘Travel and Tourism Salary Survey 2020’. The 2-minute survey is anonymous can be taken by clicking on https://www.surveymonkey.com/r/3WP3JHM. Share your inputs without having to reveal your name or email. The survey would gauge how every sector is dealing with the crisis and possibly trigger discussions on best employment practices in the industry.

Going by a recent report from JLL, more than 60 per cent of organised hotels in India have already shut and several others are operational with single-digit occupancies. The report also estimates that at least 30 per cent of hotel and hospitality industry revenue could be impacted if the situation doesn’t improve by the end of June 2020. Industry estimates indicate that in India, branded and organised hotels annual revenue is INR 38,000 crore (US$ 5 bn). Corporate businesses will be left with less money to spend on travel, lodging and entertainment. Behavioural changes will lead to reduction in socialising, which in turn will impact F&B in hotels. All this will impact GOPs and further reduce yields to hotel owners.

Kerrie Hannaford, Vice President Commercial, Accor India & South Asia during the 2nd TravTalk Digital Conclave said that after the COVID-19 crisis is over, hotels will have to change how they function. “We will be coming out with new standard operating procedures (SOPs) wherein a health certificate will be needed by hotels. The hotels need to work closely with the travel agents, who are the source on which our consumers can rely to get information. Anyone who engages with the consumer needs to have a certificate of health. That’s our priority. The idea is to build consumer confidence, allowing them to check-in without any fear,” she added.

Showing the way forward, speaking at the 2nd session of the second Digital Conclave held by TravTalk, Arjun Sharma, Chairman, Select Group, said, “My suggestion to travel agents is to focus on packaging experiences, experiential travel can also be a luxury. Travel agents need to first build their database and then identify the potential clients and then create packages for them.” He also added that travel will not stop, but it will just take some time for it to build up again.

According to an HVS report, the overall revenue of the Indian hotel sector is set to decline by anywhere between $8.85 billion and $10 billion this year, reflecting an erosion of 39-45 per cent compared to the previous year. The report also shows that besides actual business loss, hotel owners will also incur losses due to fixed operating expenses, debt repayments, interest payments and several other compliances required to be undertaken. It is important to note that the magnitude of the impact can change drastically if the outbreak is not contained immediately. In such an event, these scenarios will turn invalid.  

According to Gurbaxish Singh Kohli, Vice President, FHRAI, the industry has witnessed a decline in revenues to the extent of 60-70 per cent as compared to the previous year’s figures. He says, “In stocks alone, the industry stocks have taken a beating of over 51 per cent. While retaining jobs of workers seems like a noble thing to do, job losses are inevitable. Almost 50 to 60 per cent of the total jobs are in danger if the sector is not revived.”

The Fern Hotels & Resorts spreads the message of being sensitive during trying times. Be it providing food to the needy during these times of national crisis or ensuring there will be no pay cuts across its 72 hotels or displaying light hearts on the facades of various hotels to exude positivity, The Fern Hotels & Resorts, India’s leading environmentally sensitive hotel chain is trying to spread the message of being sensitive.   From Mumbai to Pune, from Rajkot to Sarnath, the hotels are acting as good Samaritans and spreading the message of being sensitive. All the necessary precautions which include wearing gloves, masks and social distancing are taken care of when these exercises are on. The CEO of the company, Suhail Kannampilly said,” We as a company are doing our bit to contribute during this time of crisis. Quite a few hotels are offering food to the needy in Mumbai and other parts of the country.”   In other measures adopted by the company he said,” hotels are exhibiting light hearts on their facades as a symbolic gesture. The idea is to exude positivity, confidence and optimism among the society and express our gratitude towards the frontline fighters”. Expressing belief in the fundamentals of the company he said,” The Fern Hotels is strong enough to come out of any crisis. Our team members are some of the sincerest and focused individuals in the industry.   I believe in the long-term vision of the company as well as the strength of what India as a country has to offer. “ He assured his employees that the company will not be reducing any salaries. “the Labour ministry’s advice on not reducing any salaries is clear and we …

In a recent report by HVS, a few suggestions have been made to the government to battle the ongoing crisis which includes Policy support, Monetary support, Fiscal support and Direct support to revive demand. In ‘Fiscal support’, the report recommends to provide a 12-month corporate tax holiday to travel, tourism & hospitality sector. It also suggests to defer all statutory dues such as advance tax, custom duties, exercise duties, PF, bank charges etc at central and state level for 12 months.

The branded segment is expected to witness a revenue loss of US$ 3.55 billion to US$ 4.1 billion in 2020 and the second quarter of the year will be the worst hit, says Mandeep S Lamba, President – South Asia, HVS ANAROCK. “The overall revenue of the Indian hotel sector, including both organised and unorganised segments, is set to decline by anywhere between US$ 8.85 billion to US$ 10 billion, reflecting an erosion of 39-45 per cent compared to the previous year. Hotels will be unable to drive rates and may even seek to attract business at deep discounts,” he adds. With new confirmed cases being reported daily, the penetration of the COVID-19 virus in India has caused mass hysteria, the reverberations of which are expected to continue well into the second quarter of the calendar year 2020.