Covid-19 second wave: Hotels in exotic locations dodge pandemic blow

Leisure destination travel is likely to be the future as large chains bear brunt of restrictions

In the hospitality industry battered by the Covid-19 pandemic, large hot­el chains bore the brunt of last year’s lockdown as inbound travel of over­seas guests was halted and curbs were imposed on banquets, con­fer­ences and festivities. One segment of the sector, however, braved the dark clouds with greater resilience. This was the segment operating in exotic locations, which saw business rebound strongly in the past six months — though the last few weeks have dampened the enthusiasm to some extent.
 
The Elgin Group of Hotels and Resorts, which operates five prem­ium old-world heritage properties in Darjeeling, Kalimpong, Kolkata and Sikkim and collectively has 200-plus rooms, is one such entity. From March to around September 2020, business came to a near standstill, says Diamond Oberoi, chairman, Elgin Group. “Travellers who come from Britain and Europe specifically for the Himalayan experience and the tea trail had stopped going out of their countries,” he says.

 
Rates plummeted, with the average tariff for Oberoi’s locations crashing to around Rs 5,000 from Rs 10,000 a day and occupancy hovering between 10 and 15 per cent. By October, however, occupancy climbed up to 85 per cent and stayed up until recently with an average of between 75 and 80 per cent.
 

The tide turned gradually as peo­ple began to recognise ways to mana­ge the pandemic through social dis­tancing and sanitisation measures and started venturing out, especially to areas with low population density.
 
“Darjeeling and Sikkim especially were doing extremely well, because many tourists from cities wanted to fly out to regions they thought were safe, easily accessible and had plenty of fresh air,” says Oberoi, who cut staff salaries when the pandemic broke out but has managed to retain his entire 400-strong workforce.

 
Rates, however, continue to remain low — at around 35 per cent less than top market prices. Oberoi says that almost all bookings are happening online instead of through travel agencies and tour operators.
 
Leisure tourism will likely be the future of tourism as opposed to business travel, at least for the next two years. As will staycation.
 
There might be a lesson in this for bigger players to figure out a survival plan.
 
Much of the steep increase in occupancy levels for smaller players has also been on account of distance from crowded metros. This is also true in the case of locations near Mumbai with properties such as the Dukes Retreat in Lonavala being sold out for months during the festive season and Radisson Blu in Alibaug faring particularly well on weekends.

 
Other operators that run hotels in offshore markets adjoining India have seen similar trends. Carissa Nimah, chief commercial officer for Soneva, which runs resorts in Thailand and the Maldives, says that the resort chain has seen continual growth over the past 12 months with high occupancies across properties.
 
The Maldives has been a quar­antine-free destination since July 2020. Though the Maldives recently issued an advisory for those travel­ling to and from India, the country’s health protection agency has speci­f­ied that only those islands that are in­habited by Maldivians will be out of bounds. Standalone islands and the hotels and resorts located on them remain open to travellers from India.

 
Not surprisingly, the Maldives has seen high traffic from many European countries, especially Russia, and also India and the Gulf states. The Maldivian government has been proactive in enforcing strict testing measures for all guests arriving into Male and the outlying islands that make it a highly sought-after destination.
 
Soneva was also the first resort in the Maldives to conduct RT-PCR tests on arrival and build its own testing lab. It is still testing guests, including those already vaccinated.
 
“On the back of this, our rates have not been affected at all, as the demand for the luxury segment in the Maldives has been very strong,” Nimah says. “We are also predicting strong pickup over the coming summer months with high occupancies throughout July and August already on the books.”

 
That has also been helped by the fact that the duration preference for getaways has changed. As Oberoi says, “Visitors are tending to stay longer now, with trips that range from four to six days versus two to three earlier.”