At least 30% of hotel and hospitality industry revenue could be impacted if situation does not improve by the end of June 2020 in India, JLL said in a report on the sector.
With more than 60% of organised hotels in India already shut and several others operational with single-digit occupancies, a recovery will be gradual, it said.
“In the third week of March 2020, at an all India level, the hotels sector witnessed a decline of more than 65% in occupancy levels as compared to the same period of the previous year. As travel restrictions around the world intensified further, Q2 and Q3 of 2020 are likely to be similarly impacted,” said JLL.
The pre COVID-19 annual revenue of branded and organised hotels is estimated at ₹38,000 crore ($5 billion)
JLL said now corporate businesses would be left with less money to spend on travel, lodging and entertainment.
“Behavioural changes will lead to reduction in socialising which, in turn, will impact F&B [food and beverages] in hotels. Cost optimisation at all operational levels will be the key,” it said.
“As the sector navigates turbulent times through the pandemic, growth and development of hotels in India is also likely to be impacted in the next two years. Any dry powder that is available today will focus more on buying operating assets rather than building new ones,” said Ramesh Nair, CEO and Country Head, JLL India.
