Hotel occupancies show a spike in August as lockdown restrictions are lifted

Hotel room occupancies in August 2020 trebled in large gateway markets such as Mumbai and Delhi, while leisure destinations like Goa and Rajasthan showed marked improvement as tourists ventured out, seeking a relief from the six-month-long lockdown.

A tourist gateway (sometimes called a Tourism Gateway or Gateway City) is a place or settlement through which tourists typically first visit on their way to a tourist attraction or tourism region.

According to statistics provided by STR, a global data intelligence gathering company, Mumbai and Delhi recorded more than 30 percent occupancy during August. This is a huge jump, compared to less than 10 percent occupancy recorded by both cities during April-May.

While most of the demand was generated from quarantine stays over the last few months, this is the first time since lifting of the lockdown that hotels are witnessing demand generation from the leisure segment.

‘Revenge travel’, a term which gained popularity in China, is where people compulsively travel to beat boredom brought about by lockdown. Similar sentiments among travellers were noted by Indian hoteliers.

“Many leisure destinations began seeing weekend occupancy spikes in August. Markets with easy car access, such as Rajasthan, Punjab and Karnataka, were the first to attract domestic leisure guests. Goa, where occupancy was in a state of limbo and in single digits until August, has seen considerable upward movement with weekend leisure demand growing robustly, in addition to Kochi,” said the STR report.

Upscale and upper midscale hotels are leading the recovery, with luxury and upper upscale hotels following suit. As domestic leisure demand slowly inches upwards, STR anticipates the performance of luxury and upper upscale hotels to change the narrative, moving forward.

Upscale and upper upscale hotels are properties and brands that are just below the luxury segment, and, are, typically, priced Rs 8,000 and above per night. For instance, Vivanta by Taj is an upper upscale brand, while Taj is a luxury brand.

Zubin Saxena, Managing Director and Vice President, Operations, South Asia, Radisson Hotel Group, said, “Quarantine stays continue to be a top contributor while leisure demand has also found its way back as people start venturing out for staycations and road trips”.

Rattan Keswani, Deputy Managing Director, Lemon Tree Hotels, said: “People are going through fatigue on account of the stress and lack of mobility created by the pandemic, and road trip destinations like Goa, Manesar, Rishikesh, Jaipur, Corbett, etc., have seen a decent resurgence. Even Udaipur, as a driving destination from Gujarat, has done quite well. Guests are willing to travel to destinations easily reachable by road in the safety of their own vehicles”.

Wedding business comes roaring back

Following the relaxation of the cap on the number of people allowed as part of a wedding, hoteliers have reported a surge in bookings for banquets and open lawns for celebrations.

As per Unlock 4 guidelines announced in September, a wedding can have 100 guests, up from 50 earlier. This is aiding the rise in room occupancy as well.

Vikram Lalvani, chief of sales, revenue and destinations, Sterling Holidays, said: “While ‘drive-to’ destinations are preferred, we are also seeing an upward trend in the number of people arriving through flights and trains.

Pick-up in other major segments like MICE (meetings, incentives, conferences and exhibitions), weddings and leisure travel are also increasing, especially on weekdays. Our recent big surge came during the first long weekend of October 2-4, and there is also a spike in queries for the forthcoming holiday season”.

Corporate segment remains weak

Corporate business and groups, historically the largest contributors to hotel room demand in India, are, however, not yet back on the road to recovery — the hotel industry was initially anticipating corporate travel to pick up by the third quarter of 2020.

Most Indian corporations have issued travel restrictions and work-from-home guidelines through the end of the year, and the situation is subject to how the pandemic unfolds.

Corporate MICE events have all been pushed to 2021, but whether these events materialise in the first quarter of the calendar year remains to be seen. This has made hoteliers roll out packages for businesses and individuals.