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Wednesday, July 28, 2021

COVID-19 Delta Variant: Another Threat To The Indian Hospitality Industry

Indian hotel industry has taken a hit of over Rs 1.30 lakh crore in revenue for the fiscal year 2020-21 due to Covid-19.

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Priya sharma
Priya sharma
Priya Sharma is a freelance journalist at Transcontinental Times and passionately writes about Business, Lifestyle, startups, and Technology.

INDIA: India has been battling with the challenges imposed by Covid-19 and it’s impact on industries and businesses. Tourism and hospitality are one of the worst impacted sectors It is reported that Indian hotel industry has taken a hit of over Rs. 1.30 lakh crore in revenue for the fiscal year 2020-21 due to Covid-19. The hospitality industry was in the process of recovering after second wave of Covid-19. Indian hoteliers were gearing up for a bustling opening. India has now classified a new variant of Covid, Delta variant and with this new ‘Variant of concern’, the future for hotel industry is full of uncertainty.

The government of India imposed travel restrictions for foreign travelers and Indian Tourists which left a dreadful impact on the industry.  The situation has already put nations at loggerheads over travel guidelines as the government fret about contentment and the recent progress in fighting the virus could be incomplete.

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A hindered reopening of the hospitality segment due to concerns about the Delta variant would have a “calamitous” impact, associates of the industry shared with Transcontinental Times.

Recovering from the ruthless second wave

Jaideep Dang, Managing Director, Hotels and Hospitality Group, South Asia, JLL explained “History always provides us an insight into the pattern of how hotel business may get further impacted if we unfortunately get a third wave of Covid-19. After the first wave that we experienced between November 2020 and March 2021, Indian hospitality sector witnessed strong recovery. Leisure markets performed exceptionally well with Goa and destinations nears the Himalayas leading the way. So much so that the resort business matched the high-level performance of 2019 with high ARRs and robust occupancies. But with the second wave in April 2021, India witnessed a decline of circa 40% in RevPAR (Revenue Per Available Room – which is a metric of hotel performance) as compared to March 2021. Goa witnessed the sharpest fall at 54% of RevPAR decline just within a month.”

Jaideep Dang, Managing Director, Hotels and Hospitality Group, South Asia, JLL
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“Business cities, which were yet to recover from the first wave, got more impacted. Furthermore, between April and May 2021, the hotel sector witnessed a month on month decline of more than 12 percentage point in occupancy levels across the country”, he added.

As per the Indian Government, over 50% of delta variant cases have been found in twelve states. “There are a very limited number of cases of this mutation (DeltaPlus) has been seen in India as of now said Sujeet Singh, Director of the National Centre for Disease Control (NCDC)

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“A possibility of a third wave given the news around Delta plus variant will further take the wind out of the business hotels, which are already grappling with low business travel volumes. The timing of the emergence of a third wave due to the Delta variant can be very detrimental for the industry as India gets into the wedding and the festival seasons towards the third quarter of the year. Social business, which is anyways deeply impacted, can further get decimated and that will unfortunately hit the cash flows very hard. Similarly, this will have a bearing on F&B dining business, which is thankfully picking up as we are slowly reviving from the ruthless second wave” Mr. Dang further added.

Too early to predict the impact of Delta variant

Aviral Gupta, Chief Strategy Officer and HR Head at Zostel said “The Indian hospitality industry was hopeful of substantial recoveries in the current holiday season and was expecting around 75-80% return of pre-covid business, driven by a number of factors including, the opening of the economy and lockdown relaxations, customer confidence boosted by decreasing covid positivity percent, increased vaccination drive, and an all-time high desire for travel both for leisure and workations. While it is still a bit early to accurately predict the impact the delta variant will have on the industry, the most likely the scenario looks to push the recovery period by at least one quarter”

“Travel and tourism is expected to rise in the short term, driven by increased domestic travel, before plateauing and experiencing a subsequent short dip by mid-Oct to late Nov, when the third wave because of the mutations is expected to peak, post which we expect international travel to pick up again in the country” Mr. Gupta added.

Ashok Kumar Sharma, Senior Sous Chef at The All-American Diner

Ashok Kumar Sharma, Senior Sous Chef at The All-American Diner said “It’s been more than two decades into this industry I have never seen this much decline in the sector. After the second wave, the hospitality industry had some hope to see a rise but seems unlikely due to the delta variant. Businesses are presently in planning with regards to rostering, staffing, restocking and preparing to reopen considering the financial impact on the business. However, indoor dining has open but the rise of delta variant has caused concern.”

Highly Problematic

On the new delta variant, Nikhil Arora, Co-Founder, Tummy Section shared his view “The expected impact of the delta variant could be a 50-50 thing. It may make things really bad or maybe it does not affect the market that badly.”

Read Also: Dubai’s F&B Industry On Speedy Recovery Path

“What I have noticed lately is the fact that the overall industry learned to tackle the pandemic and has been taking all the necessary precautions and sincerely following all the laid protocols to make sure that the customers feel safe in our environment. But at the same time from the consumers’ point of view, the overall sales have been down and the numbers start to crunch due to the Lockdown scenarios. It affects the hospitality industry quite badly. The hotels and the tourism industry are still suffering and they are not any close to recovering.”

Jaideep Singh Anand Owner Tamasha Restaurant Connaught Place stated “It looks like that the hospitality industry is still not out of the curse and instead is just diving deeper into the virus hole. Now, that COVID seemed to be in control and the vaccination drive going at a smooth pace, the delta variant is coming into play and ruining the one nice moment we were yet to enjoy. The Delta variant is undoubtedly leading to uncertainty as we are unaware of the efficacy of the current vaccines available in India against this variant. If reports are to be believed, the current vaccinations may not even be as effective against the variant. This is causing uncertainty about the future customer behavior / Govt actions”.

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