April 20, 2020 TnH Global

Over 60% of branded hotels across segments are shut: Report

Hotels & Tourism sector has been hit hard by COVID-19 impact, but long-term optimism remains high.

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• As of 10th April, more than 60% of branded hotels across various segments are shut
• The third week of March saw a 67% decline in occupancy levels year-on-year
• Many hotels across India are operating with a gross operating loss
• Sales and marketing strategies need to be programmed around the domestic traveller
• Focus on staycation demand
• Special focus on guest health and safety parameters
• Food & Beverage (F&B) should be re-aligned
• Discounting room rates will draw out the recovery period further

India’s hotel and hospitality industry has declined sharply in the first quarter of 2020, as the COVID-19 outbreak impacts various segments of the sector.

Coming off a high performance base in 2019, the COVID-19 outbreak and the containment measures introduced by the Government of India have resulted in a severe drop in foreign and domestic travel, across both the tourism and business traveler segments.
“In the third week of March 2020, at an all India level, the hotels sector witnessed a decline of more than 65% in occupancy levels as compared to the same period of the previous
year. As travel restrictions around the world intensified further, Q2 and Q3 of 2020 are likely to be similarly impacted,” says the “India Hospitality Industry Review 2019: “The Show must go on…” released by JLL, the largest real estate consultancy firm in
India.

The report estimates that at least 30% of hotel and hospitality industry revenue could be impacted if situation doesn’t improve by the end of June 2020. With more than 60% of organised hotels in India already shut and several others operational with single digit occupancies, a recovery will be gradual.
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. Behavioral changes will lead to reduction in socializing which in turn will impact F&B in hotels. All this will impact GOPs and furthe