Hotels Performance H1 2020-21
The Indian Hospitality sector has undergone severe changes over the last six months. The sector which was at its peak during 2019 witnessed a hard blow due to the outbreak of COVID-19 impacting the economic activities across the globe. The tourism sector which contributed around 9% to the global GDP was one of the worst impacted by this.
In India, approximately 1 million hotel rooms are catering to the varied needs of travelers excluding the rented accommodations which are listed with various other agencies. Of the total room supply, branded rooms contributed a mere 16% to the overall supply.
The induced lockdown has ensured we go back to our basics and draw a new strategy for the new normal. One of many outcomes which turned positive for the industry was unbranded hotel owners looking to rebrand their hotels by tying up with branded hotel chains for the operations in the new normal.
As per a survey conducted by Noesis Capital Advisors during the lockdown, nearly 73% of respondents said they are looking for branded hotels for their upcoming vacation plans and they are ready to pay a 15-20% premium in terms of room rents as they don’t want to compromise on the health and safety of themselves and their family workers.
As a result of the conversion, we can expect the share of branded hotels to rise from 16% to 20-22% in the medium term and branded hotels are expected to reach into tier-II and III cities through these brownfield conversions and look beyond the top metro and tier-I cities
The impact of COVID-19 on the Indian hotel industry was such that from occupancy of 65% in 2019, the average occupancy dropped to as low as 9% during the first half of fiscal 2021 impacting the industry overall performance significantly. With the lean performance, it has become difficult for the hotel owners to operate and service their debts with the subdued income.
No matter how hard the first half of fiscal 2021 has been for the industry, the second half is expected to witness a sharp revival of the industry. Staycations and weekend getaways have already started gaining traction amongst the millennial population. After being locked under the homes for 180 days, now the millennial population is seeking short vacations to change the environment around them. Not only this but by the end of the third quarter of the fiscal, we also anticipate the wedding business to come back to the hotels.
In the current report, “Indian Hotels Performance H1 2020-21- Dominance of Branded Hotels In the Hospitality Sector”, we have captured the performance of Indian hotels across the top business and leisure destinations in India and compared them with the performance of branded hotels. The report also covers the destination wise performance of branded hotels and gives a glance at the impact of lockdown on the hotel industry during the first half of the current fiscal.
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