Hotels may again face tough time as infection rises

When international travel came to a screeching halt last year, business at Luxury Escapes India, which otherwise saw a huge traction from users looking for a good deal on five-star hotel properties, also came to a standstill. There weren’t enough customer care executives to handle the slew of cancellation and reschedule requests.Hotels lost travellers, and cinemas and malls lost visitors for a while. As the unlocking started, the hope of a faster bounce back grew. But now, the sector is grappling with the impact of another round of rising Covid cases. To their credit, businesses are being more fastidious and careful this time to mitigate the impact of the new wave. The stakeholders hope to see recovery by the second quarter ( July-September) of this financial year.Team Luxury Escapes, for example, is geared up with a stronger, more robust customer care team to handle any changes in holiday plans.81889959Like them, many businesses in the hospitality space say they hope to come out stronger, though circumstances are against them now. Before Covid, it wasn’t uncommon to see 50,000 visitors a day on weekends at malls like Select Citywalk in Delhi. The number is now around 35,000.The company’s CEO says this is a temporary hiccup. “Things were moving towards normalcy. But after the Maharashtra restrictions have come into place, there have been a lot of rumours on WhatsApp about a potential restriction or lockdown in Delhi. This has made customers nervous,” says Yogeshwar Sharma, Select Citywalk’s CEO.Business has grown in the electronics and athleisure space and sports division at the mall. Things that have not done so well are formals, shoes and Indian ethnic wear. Beauty as a segment has also bounced back quickly.81889963This is where Sharma sees a problem. The new Covid wave could throw timelines awry as companies like West Elm, Nike, Seiko and Paul Café are readying to open stores at the mall. “Many new businesses want to launch around the Diwali period. With this new wave, this could be a bit difficult. Our hope is for a bounce back by next quarter,” he adds.The story is no different at cinemas. Inox Leisure expects a huge pent-up demand, and is hoping a stellar lineup of movies in 2021 will help it move ahead faster. The industry has been taking steps to encourage visitors but the lack of new content is hampering its progress. While there have been some big launches in the south, we are still a fair distance from an upward swing from a national perspective, said an industry executive. Alok Tandon, CEO, Inox Leisure, says: “In the current situation, we have pinned our hopes on the rapid and widespread vaccination drive, which we hope would arrest the surge in cases.”81889971On the travel front, businesses say customers have been somewhat shaky with their plans. “People take holidays when everything is certain. The general confidence must return for a complete bounce back. Using sanitisers and masks all the time give you a pervasive fear,” says Manu Rishi Guptha, CEO of luxury hotel company Niraamaya Retreats.Many leisure businesses see an opportunity in the pandemic. Business travel could remain subdued in the next year or so and there might be a greater focus on leisure travel. Guptha says their marketing is now solely focused on staycations and healing packages.Niraamaya has shifted its strategy to suit the only clientele it gets now: Indians. “We have become much more competitive and value driven for our Indian traveller, who is very value conscious. We have become far more elastic in our pricing. We were not this way earlier. Time is a great teacher,” he adds.81889982The hospitality business has seen volatility even after the lockdown eased up, primarily due to swift changes in government policies about tests, quarantine and others.CGH Earth is hopeful that the dip in customers due to a new wave will improve in the coming months.Prior to covid, 70% of CGH’s customers were from abroad. But it was entirely dependent on the domestic clientele as the lockdown eased. Michael Dominic, CEO, says they had to relook at some of their offerings and rates to attract Indian travellers. “Some of our resorts did better than pre-Covid times.”Things became iffy when states started introducing separate Covid rules.81889987“The trend of business coming in from different states is cyclic now and it will be this way for some time. Many factors affect their decision to travel. Most guests have gotten used to the idea of getting tests done. But the uncertainty of new regulations and protocols has led to some hesitation to travel outside the state,” he adds.Many properties like theirs gained as people were ready to go on long drives and stay at resort-like places around December 2020. CGH is only operating at about 60-85% capacity across its resorts depending on the location and sees 50% occupancy on weekdays and about 80% on weekends.Dominic is confident of a rebound in August, driven by widespread vaccination. By December, he hopes to see some level of international travel, too.The story is no different for IHHR-run Ananda In The Himalayas.The hotel is operating at less than 50% capacity to ensure patrons feel socially-distanced and safe. The company is hopeful of business improving after the 45-year-plus age group starts getting vaccinated. “Till we get a fair indication that is happening, we will still keep occupancy at 50%,” says Mahesh Natarajan, senior vice president at IHHR Hospitality. 81890009“Safety is incredibly important to us. That’s the call we’ve decided to take.” Treehouse Resort saw encouraging signs in August 2020. They were operating at almost 80% of pre-Covid levels. The winter months and wedding season also gave business. But the past month has seen a dip in business.Jayant Singh, managing director, says, “That said, we do feel optimistic about business, as we have a few advantages, like being at drive-able distances from big cities. The wedding business should not see much of a lull despite the pandemic. We foresee brisk business in 4-5 months, once more vaccinations occur and the pandemic settles down,” says Singh.Companies are banking on more Indians travelling as the pace of vaccination accelerates. “We feel the vaccine and herd immunity will be an exit route for the hospitality industry,” says John Spence, founder of Karma Resorts, which recently acquired three resorts in India. The company functions as a private member’s club and has about 40,000 members globally.81890040“India has a challenge because it’s just so massive. But what has been done so far in terms of vaccinating is impressive. We believe people will holiday like never before since they have saved money and want to reward themselves,” adds Spence.Leisure hotels have had a great time these last few months, says Arun Ashok, regional head, India and Middle East, Luxury Escapes. Any resort that was within two or three hours drive from a major city saw its fortunes change overnight. In fact, most resorts in Coorg, Kabini and Chikmagalur in Karnataka were sold out in January and February. Most such hotel businesses use companies like Luxury Escapes to sell unsold inventory during tougher periods.81890043There is also a change in travel patterns. The lead time for travel or the time between booking and taking the holiday has reduced a lot. Stakeholders hope business will grow as vaccination becomes common. They point out that Phuket may open up for vaccinated foreign visitors from July. By then a significant majority of India’s over-45 population should have gotten their shots, too.So Indian entertainment and hospitality sector could gain from both domestic and foreign tourists. Until then, hotels and malls are using their learnings from the first wave to barricade themselves from a heavy hit.
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