October, November registered 31%, 36% occupancies for hotels: STR Data

Hotel occupancy crossed 30% in India in October, the first time in the Covid-19-hit year, and improved further the next month, according to data shared by industry tracker STR with ET.

While occupancy was 31% and 36% in the two months respectively, preliminary data for December 2020 indicated occupancy of more than 45%, driven mainly by leisure demand. Average daily rates (ADRs), however, fell 26-38% year-on-year from April to November, the data showed.

The top performing markets in October and November were Visakhapatnam, Lucknow, Goa, New Delhi and Mumbai. December saw Goa on top, with Rajasthan and Agra joining the top performing markets.

“The Indian hospitality sector is without doubt one of the worst impacted in the country,” said Karan Mahesh, account manager, Central and South Asia, STR. “There had been little respite with the unlocks that ensued, with nationwide occupancies struggling to surpass 25% up until October. Hoteliers are faced with the challenge of finding the sweet spot in price elasticity leading to the expected expansion in demand."

Bengaluru and Pune are two key markets that are yet to witness the level of recovery seen in the other markets. STR said this can be attributed to the two markets being predominantly driven by corporate demand.

Anil Chadha, chief operating officer, ITC Hotels said occupancies grew steadily at the chain in the quarter to December and peaked in the last month of the year due to holiday travel and big wedding dates. He said New Year's celebration was a big reason for the rise in staycations and occupancies across the chain’s properties.

“Most markets have picked up significantly, especially the leisure segment, driven by high occupancies at our Agra, Jaipur and Goa properties, as well as hill stations and celebration destinations such as Shimla, Mussoorie and Amritsar leading the way. Occupancies in city hotels have also shown significant traction, driven by a mix of business travel and staycations,” said Chadha.

An IHCL spokesperson said the Christmas and new year period saw very high occupancies, especially in leisure hotels. "Most of the leisure hotels in the portfolio were doing an occupancy of over 90%," the spokesperson added.

Wyndham Hotels & Resorts saw an increase in occupancies in the last quarter of the calendar year at its hotels in leisure destinations such as Rajasthan, Udaipur, Jaipur and Agra once the Taj Mahal was reopened to visitors from September, said Nikhil Sharma, regional director, Eurasia, Wyndham Hotels & Resorts EMEA.

Real estate consultancy JLL said on Tuesday that the revival of the sector has primarily been driven by leisure “revenge travel” during weekends and the festival season, weddings and food and beverages (F&B) demand.

“Domestic business travel is expected to pick up pace from March-April onwards, as employees return to workplaces and travel advisories by companies are softened. Additionally, domestic leisure will continue to drive occupancies across the country. F&B demand will continue to grow as eating out will increase, albeit cautiously,” said Jaideep Dang, managing director, hotels and hospitality group, South Asia, JLL.

In its Hotels and Hospitality Overview, hospitality consultancy HVS Anarock said India reported a 49-51% year-on-year decline in occupancy rates in November, much higher than in China (8-10%) and Singapore (11-13%) but lower than in Thailand (65-67%) and Malaysia (69-71%).