All India occupancy rate for hotels was hovering around 24% on an average in the first week of September while revenue per available room (RevPAR) was just shy of Rs 1,000, as per data shared by industry tracker STR with ET.
Hotels had reported around 20% occupancy in June for about 60% operational inventory, according to hospitality consultancy HVS Anarock.
Various industry estimates pegged occupancy rates for July at around 23% and they were expected to be in a similar range for August.
In 2019, the Indian organized hotels sector recorded an occupancy rate of 66% at an average rate of nearly Rs 5,997, the highest in the last decade.
Demand for quarantine rooms – which had been aiding hotel occupancy growth across major markets in the country – is now slowing down, while despite Covid cases going up, chains including Indian Hotels Company (IHCL), Sarovar, Accor and Radisson, report leisure travel demand in some markets with people opting for staycation and drivecation to break the routine of work from home.
“Some leisure markets in India, especially in the North, have picked up in August in terms of weekend demand,” said Vidhi Godiawala, business development manager for central and South Asia at STR.
“We are seeing marginal, but visible weekend leisure spikes in markets such as Udaipur, Jaipur and Amritsar. Some movement is seen in the southern regional markets as well. However, occupancy for hotels in Goa has flatlined and is struggling in the single digits,” she said. “Each state has different response measures to tackle the virus, and, depending on the situation on the ground, travellers are choosing their destinations accordingly.”
Faring better than the national average are hotels in Mumbai, Delhi, Chennai, Gurgaon, and Hyderabad that reported 30-40% occupancy levels in the first week of September, as per STR. Occupancy in Bengaluru, however, is below 15%.
Ajay Bakaya, managing director of Sarovar Hotels, said average occupancy rate for his hotels was about 22% in August. “Recovery has been very slow; recovery in business hotels is slower,” he said. “Recovery in cities like Bengaluru which are dependent on tech is even slower.”
Out of 90 Sarovar hotels in the country, 75 were operating during most of August.
Parul Thakur-Senior area director sales and distribution, South Asia at Marriott International said the chain's hotels in India closed occupancies of 20% for the month of August. She said the chain sees recovery to pre-covid occupancies by 2022 and revenues by 2023.
Hoteliers are hopeful of demand picking up in the coming months.
“Leisure hotels in places where you can drive to or reach without any stringent travel restrictions are reporting better occupancies,” Bakaya said.
Renu Basu, senior vice president, global sales and marketing at IHCL said metros such as Delhi and Mumbai have done well and the chain is seeing some leisure demand in markets such as Nashik, Coorg and Udaipur with many guests taking staycations.
Kerrie Hannaford, VP, commercial, at Accor India & South Asia, expects occupancy rates to increase to 35% by the fourth quarter. “More and more travellers are looking to break the monotony of being confined at home and are looking to unwind by staying at their trusted hotel brands," she said.
Zubin Saxena, MD and VP, operations, South Asia, at Radisson Hotel Group, said quarantine stays continue to be a top contributor while leisure demand has also found its way back as people start venturing out for staycations and road trips. “Our estimate for recovery to pre-pandemic levels is about 12-16 months from this point,” he said.
Jaideep Dang, managing director, hotels and hospitality business (India), at real estate consultancy JLL, said, “Jaipur and Udaipur are witnessing a recovery in average daily rates and occupancies to some extent. This represents a trend of some amount of leisure travel out of hinterland Delhi/NCR and Gujarat whereby travellers are taking road journeys over weekends.”
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7 Comments on this Story
Mahesh Thorat42 days ago
Now every chain should work on prices as every one is in cost reduction mode, let it be individual or corporates..
Vk Singh42 days ago
Modi disturbs whole economy with hotels business.
Hemant Pisat42 days ago
The hotel properties have eaten massive liquid capital without returns since last few years and there's a debt service fatigue for large chains as well, which might further aggravate the situation. Price rationalisation could be one of the solutions.