Home >Companies >News >Hotels may bounce back to pre-covid business levels in up to two years: Report

MUMBAI : Almost 60% hotel operators expect their business to bounce back in 2019 levels between 13-24 months, says a survey by real estate consultancy firm JLL, released Tuesday. The covid-19 pandemic has brought the world to a standstill, with hospitality, travel and tourism sectors being the most affected due to travel restrictions across the world and within India.

According to the survey, just 20% of the operators believe that their hotels could bounce back to 2019 Revenue Per Available Room or RevPAR levels within 6 to 12 months.

As the sector continues to build contingency plans to alleviate the fallout of the crisis, hotel operators are extending the hand of solidarity to their owners by providing certain relief measures. As many as 67% of the operators surveyed confirmed that they are being approached by the hotel owners for financial assistance or relief, for example, deferring management fees, fixed system charges etc. providing much needed relief to hotel owners.

Currently, 47% of the operators expect to re-open their hotels for operation within 2 weeks of lifting of lockdown / travel restrictions by the respective state governments and 33% of operators expect to open within a week. Importantly, almost all operators believe that most hotels in their portfolio would need working capital infusion to continue or re-start their operations because the reserves have almost dried.

“The standard operating procedures will be significantly transformed to promote enhanced hygiene standards and to adopt technology to support social distancing policies. However, with the slowdown of hotel developments, capital assistance is needed to help hotels sustain until demand returns," said Jaideep Dang, Managing Director, Hotels & Hospitality Group (India), JLL.

From repurposing a property to adapting new strategies and approaches to secure a strong come-back for hotel assets once the industry restarts, a multitude of things have to be considered from operational changes to strict hygiene measures. Hotel developments have slowed down, and most hotel openings are likely to be deferred by at least 6 months.

Luxury hotel operators are expected to ramp-up much slower with some expecting that their portfolio may take more than 2 years to reach 2019 performance levels. Qualitatively, the survey also indicated that business travel is expected to reduce in the post covid-19 world as companies will rationalize spending on travel, which could, in a way, benefit branded economy and midscale hotels.

Though unlock 1.0 has allowed hotels to open in a few cities, ride ahead seems bumpy with limited demand offtake for rooms, Food and beverage and other recreational business. Hotels could rather earn better revenues serving as covid support facilities in more affected cities such as Delhi and Mumbai, found the report. Over 60% of respondents have up to 10% of their total hotels serving as quarantine facilities predominantly in key markets, with some of these hotels providing rooms for the “Vande Bharat Mission"

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