India's hotels lost Rs 8,000 crore in revenues between March to June: STR Horwath HTL report

NEW DELHI: Indian chain affiliated hotels lost a staggering Rs 8,000 crore in revenues between March to June this year and these losses could increase by 180% to 200% if independent hotels are included, as per STR Horwath HTL's H1 2020 India Hotel Market Review report.
As per the report, the revenue loss estimates are based only on hotels participating with industry tracker STR (mostly chain affiliated hotels).

The report stated that if 2019 was the best performing year in the past decade for Indian hotels, 2020 has been the worst in living memory. Occupancies were at 38.3% in H1 2020, compared to 66.4% in H1 2019. In quarter two of the calender year, occupancies for Indian hotels were at 15.7% this year compared to 62.9% in the corresponding period last year. Revenue per available room (RevPAR) in quarter two was Rs 539 this year compared to Rs 3400 in quarter two of last year. In H1 2020, RevPAR was Rs 2200 compared to Rs 3900 in H1 2019.

Hotels in India sold 89,000 rooms per day in March and April 2019, and 85,000 and 88,000 rooms in May and June last year. The numbers shrank to 41,000 in March, 9,000 in April, 12,000 in May and 21,000 in June this year.

The report stated several hotels have temporarily closed down, while others have significantly scaled down operations. Full or partial closures continued as lockdowns were extended and divergent travel protocols inhibited resumption of operations even in June. According to the report, the expectation of demand for staycations and leisure has materialised only in August as varied travel regulations and state policies discouraged travel in June.

As per the report, F&B and other operating revenue decline in the period from March through end June is estimated at Rs 3200 crore.

"F&B and banqueting have been devastated during the lockdown period. The summer wedding season vanished. Conferencing and events demand disappeared, and F&B spends from leisure and entertainment have yet to reappear as governments disallow normal functioning of restaurants and bars," the report stated.

At the city level, H1 2020 demand for the six major metros declined 50-55% compared to H12019. Gurugram demand declined by 57%, Pune by 63% and Ahmedabad by 42%. Demand declined by 83% and 62% in leisure markets of Goa and Rajasthan respectively.

STR and Horwath HTL estimated room revenues losses for the luxury -upper upscale, upscale-upper midscale and midscale-economy segments at Rs 2700 crore, Rs 1500 crore, and Rs 600 crore respectively from March to June.

"Life blood is not flowing through the arteries of hotels- restricted by varied closure regulations, and lack of travel confidence. When the blood flow stops or drastically reduces, when oxygen levels decline precipitously, patients are normally put into good healthcare and ICU, for revival – they are cared for. They need support and timely attention, which has not been forthcoming," the report stated and added: On the other hand, one wonders how the pandemic containment programme would have worked if hotels were not around to support the varied needs."

STR and Horwath HTL stated in the report that there should also be significant concern about what happens to the large number of employees and graduating hotel students who are and will be stranded job-less because the industry faces multiple closures, lack of resources and cancellation of new projects.