Airlines, hotels stare at uncertain future amid new curbs in Maharashtra

Tightening of travel restrictions and introduction of RT-PCR tests by more states had led to a near flat air traffic growth in Feb and demand will be dented further due to new curbs in Maharashtra.

Just when airlines and hotels—battered by year-long Covid restrictions--were preparing to get back to normal business, the weekend lockdown announcement in Maharashtra  threw their plans out of gear. While aviation and hospitality firms could face a significant slump in bookings, the retail industry may head for an uncertain future as well.               

Tightening of travel restrictions and introduction of RT-PCR tests by more states had led to a near flat air traffic growth in February and demand will be dented further due to new curbs in Maharashtra.

“It will be a tough time for airlines. Average seat occupancy on flights to/from Maharashtra was around 60-65 per cent. I will not be surprised if it falls below 60 per cent now. Travel sentiment has turned negative. People will not be confident about travelling to Maharashtra now,” said a senior executive from a private airline.

While public transport will function with caps on seating, airline executives fear that the night curfew and weekend lockdown would deter people from travelling to the state.  Airlines may also cancel or club some flights depending on loads.

“Owing to the latest restrictions imposed in Maharashtra, we do expect some decline in demand for air travel to and from the state as was the case when similar measures were introduced in the past due to the rise in Covid-19 cases. We are closely monitoring the market and shall remain nimble in adjusting capacity if required,” said a Vistara spokesperson.

But, there’s optimism too. “The share of bookings to locations in Maharashtra has declined slightly in the last few weeks owing to restrictions by multiple states… This trend will ease out with the reduction in case numbers, lifting of restrictions and accelerated vaccinations,” said Rajiv Subramanian, vice president of Cleartrip.com.

Maharashtra currently has nine operational airports with two of those – Shirdi and Nanded-- being heavily dependent on religious tourism. With curbs on religious places till the end of April, there will be an impact on travel plans. Pune airport will be closed for 15 days starting April 26 for runway recarpeting work and this will further impact traffic.

On Sunday, the Maharashtra government announced a weekend lockdown and closure of malls, multiplexes and markets. Restaurants have been allowed only parcel services. On Monday, restaurants, shopping centres, malls and multiplexes wore a deserted look in Mumbai as shoppers stayed away.

"There were no footfalls at all in our restaurants during the day,’’ said Riyaaz Amlani, chief executive officer (CEO) and managing director, Impresario Entertainment and Hospitality. The night curfew has wiped away the evening business, according to Amlani. ‘’So why are we in business at all?," he said.

Retailers, mall developers, multiplex operators and restaurant owners argue that limited lockdowns, night curfews and random rapid antigen testing have hurt their operations over the last one month, even as standalone shops, marketplaces, stations and bus-stops continue to remain crowded.

Mukesh Kumar, CEO, Infiniti Malls, said formal retail spaces had followed the Covid-19 guidelines issued from time-to-time by the state government. "There is a need to identify the super-spreaders rather than subjecting formal retail spaces to guidelines and restrictions.

How do you regulate vegetable and fruit markets, for instance? People continue to throng these places," he pointed out.

The restaurant industry has said that the new set of curbs will result in another 30 per cent of eateries shutting shop forever. "Last year, some 30 per cent of restaurants had permanently shut down. This year, another 30 per cent of eateries will shut down due to these curbs.

This hardly bodes well for an industry that employs over 5 million people," Gurbaxish Singh Kohli, vice-president, Federation of Hotels and Restaurants Association of India, said Suhail Kannampilly – CEO, Concept Hospitality which owns Ferns & Hospitality brand of hotels, said on an average, the all India occupancy dipped to 50 per cent in March from 56 per cent in February especially in the wedding and banqueting segments.  The cancellations are not confined to one city, it’s all across. “We have seen huge cancellations in Gujarat, and even as far as Gangtok,” he said. We had bookings for 900 rooms in Gangtok for April and by now bookings for 300 have been cancelled.  Except for weddings, Maharashtra hasn’t seen huge cancellations. There weren’t many bookings in the first place as people were wary.”

“This (restrictions related to Covid) will add to our sufferings. While saving life is a priority, one wonders what impact the lockdown will have on the economy,” said KB Kachru-- VP, Hotel Association of India & Chairman Emeritus & Principal Advisor, South Asia, Radisson Hotel Group- Hotels in the region.