Hospitality to return to pre-Covid levels by FY24, says ICRA

NEW DELHI:  The second Covid-19 wave has pushed back the recovery of the hospitality sector to pre-Covid levels by 6-8 months from previous estimates, ratings agency ICRA said, adding that revenue recovery of the sector to pre-Covid levels is now expected only by FY24. 

“The intensity of Covid 2.0 has been far steeper than the first and it has put a temporary brake on the industry’s recovery path. We expect a significant scale back in FY2022 pan-India RevPAR (revenue per available room) estimates to Rs 1,300-1,500, from an earlier estimated RevPAR of about Rs 2,500. FY22 RevPAR is likely to be at a 60-65 per cent discount to pre-Covid levels,” said Vinutaa S, Sector Head and Assistant Vice President, ICRA. 

He added, “Although this will be an improvement from the low base of FY21, the pandemic timelines pose downside risks to the estimates. The situation is still evolving and remains contingent on the pace of vaccination, efficacy of vaccines, high infection rates, and the possibility of a third covid wave. We expect a long road to recovery...” 

According to Federation of Hotel & Restaurant Associations of India (FHRAI), the industry’s total revenue in FY20 stood at Rs 1.82 lakh crore and in FY21, approximately 75 per cent, or Rs 1.30 lakh crore, got wiped off due to Covid-19 led lockdowns.