Weddings, leisure travel help hotels record steady rise in occupancy

For the first time since the start of the financial year, room occupancy at hotels nearly trebled by the end of October to cross the 30 percent mark, following the resumption of leisure travel and the start of the wedding season, said a top market research company.

Occupancy climbed to settle between 29 to 31 percent by the end of October, up from 11.7 percent in April, according to data shared by HVS Anarock, a hospitality consulting and transaction advisory firm.

The average daily rate (ADR: the average rental revenue earned for an occupied room per day) by the end of October, however, was steady in the Rs 3,700-3,900 range, since supply is outstripping demand and expected to remain that way for the rest of the year. In April, the ADR stood at Rs 4,113.

Wedding and leisure stays

Chandigarh and Goa topped the charts with over 40 percent occupancy in October, riding on demand from wedding events and leisure travellers, respectively. Shimla, Uttarakhand, Kerala, Rajasthan and Ooty also witnessed a sharp pick-up in demand.

Domestic air passenger traffic has also improved by over 33 percent from September, the report stated.

“In October we hosted five weddings across two properties in the North. In November we did something like eight and the bookings are looking even better for December,” a mid-level executive at one of the top hotel brands in India told Moneycontrol.

Mandeep Lamba, President (South Asia), HVS Anarock, said: “The outbound Indian luxury traveller will also be on the lookout for exclusive domestic vacations within the country as uncertainties about international travel continue to loom large. To tap this demand, most domestic hotels have curated special Staycation, ‘work-from-hotel’ and F&B packages, which have sparked some recovery in the sector.”

Midscale, upscale and upper upscale segment hotels have been witnessing the maximum traction since the lifting of the ban on movement within the country. Market watchers say that these segments are preferred because of the sanitisation level offered and the discounted rate such properties come at.

Virtual meetings hit hospitality industry

Corporate travel, however, remains disappointingly low. Revenue per available room or RevPar in Mumbai, Pune, Hyderabad, New Delhi, Chennai and Bengaluru was down 60-80 percent in October compared to the same month last year. Bengaluru and Pune continue to witness low occupancy due to limited corporate travel, especially by the IT-ITES sector, added HVS Anarock.

“While domestic leisure travel is picking up, corporate demand is still subdued and will remain constrained at least for the short term due to companies’ cost-cutting measures. Most corporates are now using virtual meetings, events and webinars to connect with their stakeholders”, Lamba added.

The overall Indian hospitality sector (organised, unorganised and semi-organised operators) is estimated to have incurred an estimated total revenue loss of Rs 90,000 crore due to the pandemic. Occupancy and ADR are expected to reach pre-Covid-19 levels by 2022 and 2023, respectively — assuming that a vaccine is in place by early 2021, the HVS Anarock report said.