IndiGo crisis: Flight cuts likely to disrupt December hotel bookings

Chains hope for revival as stabilisation measures kick in

Hotel chains are bracing for a 10-15 per cent drop in December forecasts after thousands of IndiGo flights were cancelled over the past week following a government-mandated 10 per cent cut in flight operations. The turbulence in the sector over the IndiGo crisis has led to a spree of hotel room cancellations at the start of what is usually a peak month for the industry.

 

“Typically, cancellations in these markets hover around 2 per cent, but during the peak of the disruption this climbed to roughly 10-15 per cent for a short period,” said Rahul Deb Banerjee, chief operating officer at The Clarks Hotels and Resorts, a mid-scale brand with more than 135 properties across India, Sri Lanka and The Maldives. Firms operating the chain were recently acquired by Indian Hotels Company Ltd.  “Since IndiGo is the largest airline in the country, the meltdown has had quite a negative impact on the business, especially considering this is the peak season for the hospitality industry,” said another senior industry executive wishing not to be named.

 

Another executive said flight disruptions have dented traveller sentiment and short-term domestic travel demand. As a result, some leisure destinations are likely to see reduced demand and bookings this month, the executive added.

 

“We saw cancellations of roughly 1,600 room nights in the first week, but we recovered about 30 per cent through extensions and other adjustments,” Jatin Khanna, chief executive officer at Sarovar Hotels.

 

Khanna said the impact has eased in the past couple of days, but cancellations are still trickling in. “We have revised our forecast downward by around 4–5 per cent and are monitoring the situation,” he added.

 

Sarovar operates around150 hotels across India, Nepal and Africa through its Sarovar Premiere, Sarovar Portico, and Hometel brands, and also manages international brands such as Golden Tulip, Royal Tulip and Tulip Inn in India.

 

Clarks Hotels’ Banerjee said the chain had seen an increase in cancellations and rescheduling directly linked to the IndiGo disruptions, particularly in Tier-I cities where air connectivity is critical. “A significant portion of these were not outright cancellations but rescheduled stays, which reflects strong guest trust in our brand and policies,” he added.

 

A senior executive with a mid-scale brand, who did not want to be identified, said December is crucial for the industry, as corporate travellers make up a good share of early-month occupancies and leisure travellers dominate bookings for winter vacations, Christmas and year-end holidays, alongside a rise in wedding-related travel.

 

“It is hard to quantify the extent of losses, but such a large-scale disruption has a wide impact. There’s a sense of paranoia among travellers, which causes a large segment of demand to remain in limbo and never fully formalise,” the executive said.

 

Amit Kumar, analyst at HDFC Securities, emphasised that while a few hotels may face temporary disruptions, the impact on quarterly revenues of listed companies is likely to be limited. Some business trips are expected to be rescheduled by a week, while leisure travel is set to peak in the second half of December. By then, Kumar expects current travel disruptions to have eased, and hotel executives anticipate rationalised airfares to support domestic travel.

 

Banerjee, however, added that at the portfolio level, the overall impact has been moderated by steady performance in drive-to leisure and regional markets, where guests have continued to travel by road and rail. He expects the industry to recover relatively quickly once flight operations are stabilised and communication from airlines is clear and consistent.