The coronavirus pandemic may have punctured travel plans of everyone for the time being, however reservations done for September onwards have not been touched yet, a top executive of a luxury hotel chain said.
Coronavirus, which has infected more than 31,000 and claimed over 1,000 lives in India, is expected to hit its peak in May in India and, thereafter, start its retreat. This has, perhaps, become a primary reason behind the hesitation of guests to withdraw their plans.
Kallol Kundu, Executive Vice President and Chief Financial Officer - The Oberoi Group, said, “Cancellations of bookings have been extremely high in April and May except for long stays who have continued to stay with us. Reservations of September, October onwards have seen no cancellations and neither have there been any indications from the bookers about any cancellation possibility.”
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Kundu was speaking to analysts to highlight the impact of the pandemic on the company’s business operation. Oberoi Group operates 22 hotels in India and seven overseas under the Oberoi and Trident brands along with two Nile cruisers and a motor vessel in the backwaters of Kerala.
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“As of now people are expecting some kind of normalcy before the first half of the year and therefore it is possible that those reservations could fructify. The current situation will likely continue till June and from July onwards there will be some increase in business. We hope to reach a more decent level around September. This is, of course, if everything goes well, and there is no recurrence of the virus,” Kundu added.
Due to travel and business restrictions (lockdown) imposed by the Centre, the hotel industry has faced the brunt of the loss in business. Room occupancies have slumped to near zero pushing several establishments especially smaller hotel companies on the brink of a collapse, a newly formed association of the industry called FAITH informed last week.
“These are extremely stressful and unprecedented times. The hotel business has been severely affected. This slide started from March 14, and then it accelerated. Some of our hotels continue to have guests. These guests have been stuck in the city or have been long stayers with us or some corporates have made some arrangements. Other than that, at leisure locations, either the occupancy is in single digit or zero,” Kundu added.
For the Group Mumbai is recording occupancy of 15-20 percent, the highest in its portfolio, followed by Chennai, Kolkata and Hyderabad. Delhi and Bengaluru have slipped to single digit occupancy. The average occupancy till December 2019 for the Group stood at 74 percent.
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While foreigners coming to India on business or leisure trips will take a massive backseat given the uncertainty over resumption of international flights to India even domestic corporate travel will be discouraged for several months.
“Resumption in business travel may take longer as corporates may cut down on travel spends, MICE (meetings, incentives, conferences and exhibitions) business would moderate as large gatherings would be avoided and leisure travel would be deferred/canceled as a precautionary measure. Additionally, some business travel demand would also be lost as people accustomed to video conferencing would now travel only when of utmost need,” warned a report by brokerage firm Motilal Oswal.
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