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Surge in travel and stay as vaccination drive picks up sparks optimism for hoteliers

Leisure travel has been on the rise since June as Covid-19 restrictions were eased in various states. Business travel is expected to pick up in September-October

August 21, 2021 / 01:18 PM IST
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Relaxed travel norms and accelerated vaccination drives have led to a marked improvement in hotel occupancy and tariff rates as eager vacationers rush to the top leisure destinations.

With the second wave of the pandemic subsiding, there’s been a spurt in hotel bookings in August, an otherwise dull month in the hospitality sector. Even in the months ahead, bookings are picking up, hoteliers and tour operators noted.

From an average room rate of Rs 1,691 and an occupancy level of 36 percent in June, InterGlobe Hotels expects tariffs to rise 30 percent to Rs 2200 and occupancy to reach 59 percent this month. InterGlobe Hotels (IGH) operates 17 properties with more than 3,000 rooms under the Ibis brand.

“July presented a robust recovery for IGH, even without any festive period or long weekdays. In August, IGH witnessed a strong start to the month with the onset of festivities such as Janmashtami, Raksha Bandhan and the 15th of August weekend,” Manoj Agarwal, Head- Asset Management, IGH said.

Timeshare segment leader Mahindra Holidays & Resorts India said occupancy crossed the halfway mark in the June quarter itself and with more people getting vaccinated, occupancy is expected at 70 percent in the September quarter.

“I do expect the trend to continue and I am extremely confident about that,” said Kavinder Singh, managing director and CEO of Mahindra Holidays. “Between quarter three and quarter four last year, we hit 75 percent and 85 percent occupancies even when the vaccine wasn’t there. And now with vaccine rollouts, I don’t see any reason why we should not be climbing well beyond 70 percent even in the quarter we are in,” Singh added.

Travel to key destinations such as Goa, Ooty, Lonavala, Mahabaleshwar, Shimla and Manali has climbed almost 35 percent, according to operators. More people are travelling in groups or families than solo travellers.

“We are seeing an extremely healthy build-up in demand and consumption that is strengthening on a week-by-week basis from June onwards,” said Patanjali Keswani, chairman and managing director of Lemon Tree Hotels.

Corporate demand, which has been muted since March 2020, has started to revive. According to HVS Anarock, Mumbai witnessed occupancy of 51-53 percent, higher than any other city, in June.

“Conversations by our sales teams with large corporates indicate – and this is an indication – that they will start resuming travel from September or October. Small, medium and micro enterprises have improved further and in large corporates, we are seeing green shoots,” Keswani added.

Analysts said the possibility of the third Covid-19 wave hitting the economy is greatly reduced because of the substantially improved levels of vaccination.

The occupancy rate during the upcoming festive season is expected to inch closer to 60 percent, Agarwal added.

Swaraj Baggonkar
Swaraj Baggonkar
first published: Aug 20, 2021 04:26 pm