Impact of the second wave of Covid: the hotel sector sees little room for hope

Summer is a critical time for the hospitality industry as it derives a large portion of the revenue from national leisure and wedding activities. But with the country affected by the second wave of Covid-19, the industry is once again in decline. Even if the trends start to reverse from the second quarter, industry players believe that activity will remain subdued throughout the current fiscal year.

To deal with the situation, the industry has called on state governments to grant exemptions to property taxes, liquor license fees, electricity fees, and municipal taxes, among others, to help the sector to overcome the current crisis. Experts have pointed out that smaller hotels have been hit hardest and it may take the hospitality industry two years before they can fully recover.

Lessons from last year

According to Gurbaxish Singh Kohli, vice president of the Federation of Hotel and Restaurant Associations of India, “The hotel industry has experienced occupancy rates in the range of 8-12% in recent months. In the case of the catering industry, nearly 50% of the recovery in activity has been observed by the players. However, almost 30% of restaurants have already closed permanently and due to the second pandemic wave we will see more restaurants close. Employees associated with the hospitality industry are now considering other options as they no longer see it as a sustainable employment opportunity. “

Hard-hit hospitality industry set to reach pre-Covid levels within next 2-3 years: ICRA

Ajay Bakaya, Managing Director of Sarovar Hotels, said: “We were seeing some recovery during the November-February period. March was flat and April was devastating. We believe April and May will be a full wash. We hope the trends reverse in June, but it’s hard to say when we might start to see a recovery. We make income from small pockets like Puducherry, Goa and Mashobra, but all the hotels in town are down.

Unlike the national lockdown, hotels continue to operate but following local security protocols and restrictions. They are also building on the lessons of the last year to implement impact mitigation strategies in terms of fixed costs. “One of the main lessons from the last year is that it is counterproductive to close a hotel because it increases costs. Therefore, our hotels are operational with staff to operate the machines, ”Bakaya added.

Hotel occupancy will remain low until FY24

“… The current situation will potentially lead to a profound and widespread loss of livelihoods amid increasing disruption to activities. We have ensured that the lessons of the last year are implemented quickly. These have become a permanent part of our business operations, ”said Zubin Saxena, Managing Director and Vice President of Operations, South Asia, Radisson Hotel Group.

Online meal delivery

Sarbendra Sarkar, Founder of Cygnett Hotels, added: “It’s been over a year since the pandemic hit us! We were just starting to slowly recover, and things were looking up as it was the start of the holiday season and people were starting to plan their vacations when the second wave of Covid hit the country. However, we believe we are better prepared to deal with the situation than last year. “

Players like ITC Hotels have focused on the online meal delivery industry. Anil Chadha, COO-ITC Hotels, said, “While ITC Hotels’ ‘WeAssure’ protocol brings high standards of health and hygiene to properties, our online food distribution initiative,” Couch Gourmet ”continues to provide healthy foods rich in local produce. ingredients and seasonal products, via food aggregation platforms.

Peter M. Doran