Picking up the pieces
Besides causing immense damage to people and property, the Easter bombings in Sri Lanka have severely impacted hospitality brands such as Shangri-La, Kingsbury and Cinnamon Grand that operate in Colombo. Hotels in Lanka are now witnessing a 40-50% drop in bookings and occupancy levels of below 40%.
Similarly, in December 2017, the volcanic eruption of Mt. Agung in Bali had led to a severe drop in the occupancy levels of hotels to 25%, from 80% a year ago.
Experts say natural and man-made disasters wreak tremendous havoc on hotel brands, which suffer on all fronts. Along with profitability, brand equity, legacy and customer loyalty may also get eroded. “There is a huge loss of business. What is important to remember here is that it is not really the hotel brand that people shy away from, but the market or the region where the tragedy has occurred. But even then the hotel brand suffers as people refrain from travelling to that region,” says Nandivardhan Jain, CEO, Noesis Capital Advisors.