January hotel occupancy lowest since June 2021: Report
Premium- Except for critical and urgent travel, leisure and business travel plans were put on hold in January as people exercised caution
NEW DELHI: Rising Omicron cases and travel curbs across states wrecked fresh havoc on the Indian hospitality sector earlier this year. Except for critical and urgent travel, leisure and business travel plans were put on hold in January as people exercised caution, found a new report by HVS Anarock, a consulting firm that specialises in providing services to the hospitality industry.
As a result of the Omicron disruption, domestic air traffic also declined by 43% sequentially in January.
The hotel sector also reported a weaker performance, with occupancy falling to its lowest level since June 2021, the hospitality consultancy said.
Meanwhile, average daily room rates in January 2022 were down 15-17%, hovering around the ₹4900-5100 mark, the report said. Average hotel occupancies, too, were down by 23-25 percentage points and were at 35-37%. Revenue per available room, a metric hoteliers use, was down a staggering 49-51% in January as compared to December 2021.
Goa saw the maximum reduction in occupancy between 20% and 30% as compared to any other city. Chandigarh, Hyderabad, Mumbai, Bengaluru and Pune saw a much lower fall in occupancies of up to 10%. Delhi and Kolkata saw a decline of 10-20%.
Unlike the previous covid waves, this downturn has been short, given that travel demand has been returning at a significantly faster rate. Mandeep S. Lamba, President, South Asia, HVS, said 2022 started on a challenging note, and demand was subdued because of the rising Omicron cases. But he said that was a temporary stumbling block, and they expect a strong comeback in domestic travel as soon as the cases subside, and travel limitations are lifted.
"Following an abysmal performance in 2020, the Indian hotel sector found some much-needed hope in 2021, as it made steady headway on the road to recovery. The year began on a promising note with the commencement of the vaccination program, which, combined with a decrease in covid cases, improved travel sentiment in the country," he said.
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Domestic leisure travel drove the recovery throughout the year, with business travel also picking up as most businesses and organizations returned to a full or hybrid work-from-office model. Additionally, weddings and social events, as well as the resurgence of small-to-medium-sized domestic MICE events, helped stimulate hotel demand in 2021, added Lamba.
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