Indian hospitality firms are gearing up to feel the pinch after Omicron, the new Covid-19 variant that is spreading fast globally, was recently found in India.
While hotels that get substantial international bookings run the risk of getting impacted by travel restrictions, companies expect domestic bookings to remain unaffected due to decent vaccination coverage and consumers’ ability to better deal with the virus.
For example, Novotel Mumbai Juhu Beach was initially estimating full-year business to touch about 65% of pre-pandemic levels. Although it has not seen a substantial dip in bookings so far, it anticipates consumers to rejig their Christmas and New Year travel plans, leading to some short-term loss in business. “With the present restrictions on international travel, the number of international travelers will be less than expected and we will shift our focus to domestic travel,” says General Manager Gorav Arora. Joyjit Chakravorty, General Manager at New Delhi’s Hilton Garden Inn, echoes a similar concern. The hospitality company expects some cancellations in international bookings for January. “We do get international travellers for medical tourism that makes up almost 10% of our business. That remains an uncertainty going forward,” says Chakravorty. Besides, MNCs will relook at their travel plans. If cases rise in India, very soon, domestic bookings will also get hit, says Chakravorty.
The pandemic, which has been around for nearly two years now, has battered the hospitality industry. The lockdowns and intermittent restrictions have crippled many businesses, especially the small and mid-sized ones, and triggered job losses. According to estimates given by the Federation of Hotel & Restaurant Associations of India (FHRAI), over 20-30% hotels and restaurants in the country have permanently shut down since the outbreak of the pandemic and more than 20% of hotels and restaurants have not opened since the imposition of the first lockdown. Another Covid wave will derail recovery of the sector that has seen some uptick in business over the past few months.
For Tarika Hotels, which primarily hosts international travellers, revenues have plummeted by up to 50% as the new variant has led to a decline in number of bookings. “The new variant has severely impacted consumer sentiment. We had initially expected the holiday season to go well but the emergence of Omicron is posing a big challenge again,” says owner and director Tarika Batra. Manoj Agarwal, head, Asset Management at InterGlobe Hotels, expects a drop in number of international guests in the near term. Domestic travel, though, is expected to remain stable considering that authorities are better prepared this time and have been taking swift measures to check the spread of the new variant.
Conrad Hotels & Resorts, Bengaluru, has seen a minor dip in domestic bookings. However, general manager Srijan Vadhera is unfazed. Vadhera says the hotel’s customers prefer long staycation experiences and the brand’s newly launched Christmas and New Year packages will attract local tourists. In fact, Woods at Sasan, which is located amidst Gujarat’s Gir Forest, expects to host more patrons in the coming days as, given the concern around the new Covid strain, consumers are likely to opt for quiet outdoor retreats, away from commercial centres. “With new Covid strain, we see that people are more informed and prepared than they were previously, and they will continue to prefer domestic tourism in remote locations. People are opting for modern wellbeing retreats with healings, such as reiki, tai chi, sound wellness and yoga,” says founder Maulik Bhagat. Novotel Mumbai Juhu Beach’s Arora is hopeful that the firm’s business recovery will be strong due to its prime location and varied clientele.