Hospitality sector prepares for biz uptick after three waves of pandemic

Led by weddings, hotels see surge in bookings across segments

After braving three waves of the pandemic which brought sporadic changes to occupancy and average daily rates and uncertainty, hospitality firms are now looking to make the most of an uptick in the business cycle.

With restrictions easing and curbs removed, hotels are seeing robust bookings across the segments including weddings, business travel—particularly from small and medium enterprises and leisure. This will help them get back to the pre-Covid levels by the first half of FY23, points out Patu Keswani, chairman and managing director at Lemon Tree Hotels.

Social and corporate events will lead the recovery, said Vineet Verma, director, Brigade Hospitality, the asset owner for Sheraton, Four Points, Holiday Inn, among other brands in Bengaluru. “With 50-plus wedding dates this year, we anticipate this segment to be extremely busy along with a lot of pharmaceutical, association and corporates sending queries and working towards closures for events,” said Verma.

Lemon Tree has seen retail bookings (the ones done by individuals independently) reach 1.5 times the pre-Covid levels. However, business from the large corporates is still only half of what it was in the pre-Covid days, said Keswani. He expects it to improve from April onwards. Meanwhile, bookings from the small and medium enterprises have already reached 80 per cent of pre-Covid.

“High value domestic leisure business, a segment that has been driving the retail business, will get re-distributed,” he added, attributing the trend to a pent up demand for outbound travel.”

Manav Thadani, co-founder, Hotelivate—a consulting firm, agreed. “The prices had gone through the roof. We expect it to drop by at least 20-25 per cent as Indians resume choosing international holiday destinations over domestic ones,” he said.

The demand from across the segments is making hospitality firms optimistic of the road ahead. Sangeeta Mohan- director, asset management at SAMHI Hotels points out that group cancellations of Jan’22 have been reinstated for February and March of 2022.

“The growth in the corporate, social and retail segments will aid in recovering the volumes to pre-Covid levels and temporary rate dislocation will be corrected within the first half of the year,” said Mohan. She expects RFP (request for proposal) corporate accounts, which typically indicate a quotation for events, to resume from Q2 of calendar year 2022 with growing confidence in travel.

Interestingly, the bounce back for the hospitality firms after each wave has been getting shorter.  The first wave and the ensuing lockdown had brought the hotel industry to its knees and took them almost a year to get back to business. The industry bounced back in six months after the Delta and in four weeks after the Omicron wave.

Others echoed the optimism. Puneet Dhawan, Senior Vice President-Operations, Accor India & South Asia said there’s a positive upward trend in occupancies and bookings across most Accor properties in the network. “With guests indulging in last-minute, spontaneous travel plans, the booking window has significantly reduced,” said Dhawan. Corporate bookings corporate bookings and weddings have seen a notable uptick, he added.

To be sure, the hospitality sector that has its fate linked to air travel, is drawing comfort from higher projection of air traffic. The Centre for Asia Pacific Aviation (CAPA) India, in a report titled India Airline Outlook 2022, has indicated that 2022 is expected to see a surge of 52 per cent in domestic and 60 per cent in international air traffic.

Zubin Saxena, managing director and vice president operations - South Asia, Radisson Hotel Groups expects the RevPar to reach pre-Covid levels by Q1 2023. His confidence stems from weddings and social functions making a comeback.

“Given the relaxed curbs on social gatherings we expect this demand to continue in the coming months,” said Saxena. Radisson has also seen a 10 per cent increase in February compared to January.

SUNNY DAYS

Most firms expect occupancy to touch pre-Covid levels in FY2023

Weddings, SMEs lead the booking surge, large corporates to comeback in April

2022 to see surge of 52% in domestic and 60% international air traffic:CAPA

High value domestic leisure segment to see moderation in growth