Monsoon fury in North: Hospitality sector stares at revenue wipeout

Industry hopeful of revival, full festive season may not get impacted

Unprecedented levels of rainfall in J&K, Himachal Pradesh and Uttarakhand, have brought infrastructure in the areas to the ground and caused flood-like situation in several areas in Northern India, primarily Jammu, adversely impacting residents and tourists.

 

With several instances of landslides and road cave-ins reported, state governments are advising against travel to affected areas.

 

Hotel owners and hospitality executives said that the industry was staring at a potential wipeout of the gains they were to make during the initial days of the festival season, starting September, as prediction of heavy rainfall continuing for the coming days or weeks has prompted travellers to venture elsewhere.

 

“There is no connectivity in the city, especially in Old Manali. The Manali highway has also been severely damaged, impacting travel connectivity. In such a scenario, we have suspended bookings at the property for at least 15-20 days until roads can be mended,” said Saurabh Bhandari, marketing manager at Nirvana Hamta Retreat in Sethan, Manali.

 

Bhandari further said that they expect to clock a revenue of just ₹1 lakh in the month of September. “This is a lean period for travel to the mountains, but the heavy rains have further impacted our occupancies,” he said. 

 

Rajiv Mehra, general secretary of the Federation of Associations in Indian Tourism and Hospitality (FAITH), said, “The travel sentiment was strong, keeping in mind the recent Independence Day long weekend, but monsoon time is not the best time to visit states like Himachal Pradesh and Uttarakhand. We generally advise people to avoid travelling to these states during Monsoon season.”

 

Keeping passenger safety in mind, the Northern Railway announced on Wednesday that it has cancelled 45 trains, while short-terminating over 25 due to heavy rains in the Jammu region.

 

Several travellers have been forced to tweak their itineraries midway. Inderjeet Gambhir, a 68-year-old homemaker from Delhi was diverted to Siliguri on August 20 due to heavy landslides and rain. She was originally supposed to travel to Darjeeling from Gangtok. 

 

 

Simrran Gill, a 28-year-old writer from Delhi, also had to cancel her trip to Dehradun. “We had planned to visit the city during the Independence-day long weekend, but the Airbnb host cautioned us about visiting the mountains during such heavy rains, and we ultimately decided to play it safe and not travel,” she said.

 

Ojus Khurrana, a 29-year-old consultant from Delhi, who was planning to travel to Manali this week, has now flown to Puducherry for a small break.

 

This year, monsoon has not just been heavy, but arrived earlier too, impacting the June quarter this year, said a recent report by HVS Anarock.

 

According to the Meteorological Department, regions like Leh have received 300 per cent surplus rains this season so far.

 

A senior hotel executive, who did not want to be named, said that while some travellers and hotels in North India are currently cautious due to floods, it is not expected to impact bookings for the festival period, especially around Diwali.

 

“Travellers are cautious about specific regions in North India, but we are still seeing inquiries for advance bookings in north regions for October to December period,” the executive added. 

 

Arjun Baljee, president, Royal Orchid Hotels, said that the current situation of floods in northern India is localised to specific regions, but he added that other alternative tourism spots could potentially fill the void so that the whole industry continues to observe an upwards trajectory in the coming months.

 

The upside for the industry may come from the rest of the festival season going up till December-end, emanating from a combination of weekend getaways, weddings and live events from global performers.

 

Industry executives are expecting a rise in room rates of up to 10 per cent on a year-on-year (Y-o-Y) basis, with some like EaseMyTrip expecting occupancy rate of premium hotel brands to be around 70 to 75 per cent from September to December. The average room rates (ARR) may climb to around ₹8,000 to ₹8,500 on the back of preference for premium or luxury stays.

 

“The August long weekends gave us an early glimpse, with airfares and hotel rates in places like Goa surging and platforms reporting around a 30 per cent rise in bookings compared to last year,” said Rikant Pittie, chief executive officer (CEO) and co-founder, EaseMyTrip.

 

“This demand usually carries into the September to December festive corridor,” he added.

 

Domestically, strong demand for cultural and spiritual hubs is expected for destinations like Varanasi, Kolkata during Durga Puja, and Pushkar for the camel fair, besides leisure destinations like Goa, Udaipur, Jaipur and Coorg. A strong preference for short-haul and visa-friendly destinations like Dubai, Bali, Thailand, Vietnam, and Sri Lanka is also on the rise.

 

Rayan Aranha, vice-president, Brigade Hotel Ventures, told Business Standard that in the October to December window, a period which typically sees rise in demand, the industry is likely to witness an increase in room rates of about 10 to 11 per cent, with occupancies rising by four to five per cent on a Y-o-Y basis, in markets like Bengaluru and Chennai.

 

Occupancies across most ITC Hotels in key metros and leading leisure destinations are trending higher than last year, said Anil Chadha, managing director (MD), ITC Hotels. “The momentum (in advance bookings) is widespread but led strongly by our hotels in metro cities such as ITC Maurya in Delhi, ITC Maratha, and ITC Grand Central in Mumbai, ITC Gardenia and ITC Windsor in Bengaluru, and ITC Kohenur in Hyderabad,” he said.

 

Meanwhile, Animesh Kumar, commercial head at ibis and ibis Styles India, said that every year, there is a pattern in terms of room rates as they increase between 5 to 10 per cent. ibis Hotels is expecting a rise between two to five per cent in its occupancy, depending on the region of its hotels.

 

States	Monsoon As % Departure From Normal From June 1-August 26
Uttar Pradesh	0
Uttarakhand	15
Haryana	22
Chandigarh	0
Delhi	38
Punjab	22
Himachal Pradesh	30
Jammu and Kashmir	9
Ladakh	298
Rajasthan	56
Goa	-6
Kerala	-15
*As % departure from LPA. LPA is the normal rains in a state in the last 30 years i.e 1961-2010

                                 

Source: India Metereological Department (IMD)