Ajay K. Bakaya, MD, Sarovar Hotels and Resorts, shares how his city hotels are performing better than the resort ones and why.
What is the impact of this lockdown extension on the hotel industry?
Due to COVID-19, our resort hotels have taken the worst hit. City hotels are performing better. We have two unique cases where our hotels are performing exceptionally well. One is Baddi in Himachal Pradesh, which is a pharma and medicine manufacturing hub. The local administration has supported business and kept factory production going and encouraged hotels to provide full facilities while taking all precautions. The second is Kakinada in Andhra Pradesh where shipping related business has brought in good revenue. Both hotels are operating at 90 per cent occupancies. The impact on all categories is the same. Corona is classification and category neutral.
A recent study has shown it will take a while for the hotel and travel industry to bounce back. What is your prediction?
The recovery will take over a year post full opening of the skies, and removal of all restrictions. Resorts will bounce back only from October 2020. Foreign travel will very likely take a big beating for the next 12 months or more. The domestic market will respond faster to fuel recovery. I have no doubt that recovery will be gradual, especially for M!CE. Once again, business hotels will recover faster. Mid-market hotels will be better placed to reap recovery benefits as bleeding businesses will be forced to cut all costs.
You have hotels in India and Africa. Do you have a revival plan in place for both these countries? How different these strategies are owing to the geography?
Yes, we have our revival strategies in place, which will take place in phases. Coming weeks are crucial. We will move forward as the situation develops.
Can you tell us in figures about the decline in occupancy and RevPAR in your hotels?
We experienced a 50 per cent drop in business in March, despite a good first half. We expect a 90 per cent drop in April. It is too early to predict May or June. It’ll depend on when the country emerges from the current lockdown.
What kind of government support are you looking for?
We expect larger loan and interest deferrals from the Centre. From states and UTs we expect electricity billing on actual usage and not on minimum contracted demand. We also expect one quarter waivers or deferrals on property/municipal taxes, liquor and other licenses.