New Delhi: Underscoring the massive revenue losses caused by the covid-19 pandemic, hotels are likely to see only 30% occupancy till the start of 2021, a research by industry body Confederation of Indian Industry (CII) has found. Currently, hotels are seeing an 80-85% erosion in revenue with lack of events, room reservations and restricted travel, it added.
In April, after Prime Minister Narendra Modi announced nationwide lockdown from 25 March, the occupancy fell to 7% against 75% a year ago. The shutdown and slowdown was initially expected to affect revenue streams only till October but reports and surveys now indicate otherwise.
The CII-Hotelivate research stated that the hospitality industry, including branded and unbranded hotels, will incur a revenue loss of $19.31 billion. Branded hotels are expected to witness better recovery in terms of occupancy (32%) over unbranded hotels (27%) owing to consumer confidence in safety measures adopted by bigger properties.
Nakul Anand, executive director at ITC Limited which runs ITC chain of hotels and chairman of Federation of Associations in Indian Tourism & Hospitality (FAITH), said covid-19 is the worst crisis of the century that has hit the complete value chain of the tourism industry with nil to limited cash inflows for many.
“One of FAITH’s three suggestions has been met — the bank commitments can now be restructured under the resolution package. We are still pursuing and hopeful for the tourism survival fund for paying salaries and costs and waiver of statutory liabilities at both central & state government level. This is critical to ensure their survival,” he added.
Meanwhile, tour operators, including both online and offline as well as inbound and outbound, will lose $4.77 billion. CII maintained its revenue loss estimates for the entire value chain linked to travel & tourism at around $65.57 billion, with the organized sector alone likely to lose $25 billion. CII said, in the best-case scenario, industry revenue will improve but only by 10-15%.
Indian Association of Tour Operators (IATO), representing more than 1,700 inbound tour operators, said the lockdown has had a cascading impact on the tourism with millions associated directly or indirectly with tourism losing their livelihood. “We have lost trained employees who have worked with us for years together and tomorrow when we revive it will be difficult to find replacement of these employees. We expect government to consider our plight and give us some relief,” said IATO’s president Pronab Sarkar.
The travel and tourism industry in India accounts for 9.2% of the country’s GDP and employs 8.1% of the population, with the total contribution to forex approximately $28 billion.