Business hotels start seeing signs of recovery after protracted lull

Amy Stewart


Encouraged by a steady recovery seen in the first two weeks of February, hospitality firms expect the business hotels in metros including Mumbai, Bengaluru, Chennai, Kolkata and Hyderabad that have been lagging the leisure hotels in terms of revenue per available room (RevPar) to catch up in the coming months.


Huge pent-up demand for MICE (meetings, incentives, conference and exhibitions) as companies slowly return to hosting physical events coupled with easing of the recently announced restrictions on international travel, will also help in getting closer to pre-Covid levels of revenue, they said. The Omicron wave that peaked in January had derailed the strong month-on-month recovery seen by the hotels since August.





“We are seeing a promising and sharp recovery trend in hotel occupancy and business travel,” said Sanjay Sethi, managing director and chief executive at Chalet Hotels. The K Raheja Group’s hospitality arm is the asset owner of Marriott International brands in Mumbai Metropolitan Region, Pune Bengaluru and Hyderabad.


The month of January saw a drop in pan India occupancy because of the third wave. However, the drop wasn’t as bad as in the previous waves.


Occupancy at the Chalet portfolio was at 38 per cent compared to 17 per cent during the peak of the first wave. The occupancy in January was supported by business travel, he said.


“From late January and into February, the pick-up has been robust” said Sethi. Business travel trends are particularly pronounced among companies and industries that are “hungry for growth,” he said, citing instances of automobile, consultancy, finance.


Mid segment hotel brands too are seeing traction in bookings and occupancy. J.B Singh president and chief executive at InterGlobe Hotels that owns and operates the Ibis brand of hotels—joint venture with Accor Group said, “Starting February, the business is showing strong growth 50 per cent plus levels across portfolio, and 60 per cent-70 per cent levels in selected city centric locations and changing on a weekly basis.”


Meanwhile, even as normalcy is getting restored gradually after the third wave, hotels aren’t seeing bookings for the large scale corporate events just yet. Chalet’s Sethi expects it to kick in the next few weeks.


However, small and medium-sized events including social / weddings etc are back again and forward queries are growing, said Singh. “The booking window is fairly short for MICE as well, with queries coming in 7-14 days before the event,” he added.


To be sure, an improvement in occupancy and average daily rates at hotel properties in the metros hold the key to a broad base recovery in the overall sector. On account of the sheer size and scale of the properties, these account for a major share in the overall revenue profit pool of hospitality firms.


“Going by the current trend, we expect occupancy at the business hotels to touch 60 percent in March. This is similar to the levels seen in the last quarter of calendar year 2021,” Nandivardhan Jain, chief executive at Noesis Capital Advisors.


In an investor call earlier this month, Puneet Chhatwal, MD and CEO at Indian Hotel Co too indicated a similar trend. Delhi Mumbai and Bengaluru, the three most important markets for IHCL’s business hotels saw a RevPar of 70-75 per cent of the pre-Covid levels in the December quarter. The day they get close to 95-100 per cent of pre-Covid levels– which should happen in the next few months, the Tata Group’s hospitality arm at a portfolio level (all brands) will reach 100 per cent of pre-Covid, said Chhatwal.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor


https://www.business-standard.com/article/companies/business-hotels-start-seeing-signs-of-recovery-after-protracted-lull-122021300548_1.html

Next Post

Travel agents reveal the top 10 holiday destinations this half term

Due to Covid-19 and travel restrictions, many of us haven’t been able to travel for the past couple of years. With the half term holidays coming up next week, this provides the perfect opportunity for families to get away on holiday, many for the first time since 2019. Travel agents […]