Year Ender 2021: A mixed bag for Covid-hit hospitality sector
The devastating second wave resulted in subdued demand, but it also provided an opportunity for hoteliers to think out of the box.
- Dec 31, 2021,
- Updated Dec 31, 2021 8:33 PM IST
The year 2021 was a mixed bag for the hotel industry in the country. It began on a high note with a sharp revival in the leisure sector, leading to industry-wide occupancy to reach nearly 50 per cent in the first quarter, the highest since the pandemic started.
However, the devastating second wave resulted in subdued demand, but it also provided an opportunity for hoteliers to think out of the box and proactively focus on alternative customer segments and ancillary revenue streams – think signature meals and laundry services. While the Taj group of hotels launched Qmin, a food delivery service in 2020, it expanded it significantly in 2021 to 19 cities. It plans to open 15 new Qmin outlets – gourmet stores in select hotels.
Similarly, ITC Hotels food delivery model -- Gourmet Couch – that was launched in 2020, was expanded to more cities in 2021. In addition, it also launched the Biryani and Pulao collection. “In some ways Covid-19 pressed the re-set button and ushered in new business models that are definitely here to stay and will continue to play a huge role in 2022," says Anil Chaddha CEO, ITC Hotels. Adding that digitisation has actually led and redefined the way we work.
“Workcaytion and Petcaytion packages along with safe Staycations at ITC Hotels saw a huge rise as people chose to travel at motorable distances,” he says.
According the to the JLL Hotel Momentum India report, India’s hospitality industry witnessed a growth of 169.4 per cent in RevPAR (revenue per available room) from July to September 2021 (Q3) over the same period last year due to a low base of Q3 2020. Furthermore, the sector saw a 122.9 per cent q-o-q growth in RevPAR in Q3 2021 as compared to Q2 2021, because of the strong recovery in leisure demand as travel restrictions were eased post the second wave of the pandemic.
Total number of signings in Q3 of 2021 stood at 32 hotels comprising 2,624 keys, recording a growth of 13.4 per cent compared to the same period last year. Fifteen of the new signings (47% of total properties signed) are conversions of old hotels. Domestic operators dominated signings over international operators with the ratio of 57:43 in terms of inventory volume.
The country saw many new hotels opening their doors. Among these were the Raffles Udaipur, Novotel Chandigarh and Ibis Mumbai Vikhroli from the Accor group and the Six Senses Resort in Sawai Madhopur, Holiday Inn Zirakhpur Chandigarh, and Holiday Inn Goa Candolim from the IHG group. ITC Hotels experienced great expansion in Brand Welcomhotel. Starting with the launch of Welcomhotel Shimla in December 2020, it soon opened Welcomhotel Chail and Welcomhotel Katra and then Welcomhotel Bhubaneswar. “Steering the asset right strategy across the length and breadth of the country, ITC Hotels announced launch of two new brands in 2021.
Mementos by ITC Hotels is the latest luxury brand which brings together a collection of unique hotels across varied destinations. Brand Storii in the premium segment is a collection of handpicked properties steeped in history. Each Storii is different by character, design or service. Mementos Udaipur and Jaipur have already been announced,” says Chaddha.
According to the Hotelivate Trends and Opportunities Report 2021, majority of the hotel brands are now entering tier 2, tier 3 and tier 4 markets, “identifying the unaccommodated demand prevalent in these cities. Consequently, 40 per cent of the hotels under active development are in these cities.” “By 2025/26, we anticipate an addition of approximately 36,599 branded rooms (under active development), taking the total supply to 1,80,646 (across the country) and growing the existing supply base by 25 per cent,” the report further adds.
Post Diwali and the wedding season, things were looking up for the hotel sector, but now with the threat of Omicron, the hotel sector has again been hit. Also the government has deferred the resumption of scheduled international flights to January 31, from December 15th.
“We don’t expect any business in the first quarter of 2022. Only if the threat starts receding by mid-Feb will we some hope in the summer months,” says Madhav Oza, Director of Mumbai-based travel company Blue Star Travels.
However, hoteliers are still being optimistic. “In 2022, we expect new trends and patterns to emerge. We've seen the horizons of the hospitality industry expand, giving us hope for a new year with better prospects. Domestic travel has been a key demand driver, and the primary source of business for hotels across categories ranging from economy to luxury in 2021, and we can expect this trend to continue in 2022 with people showing preference towards value-driven travel through trusted partners and branded hospitality chains,” says Puneet Dhawan, Senior VP Operations, Accor, India & South Asia.
Accor will open four new hotels in 2022. “Growth of ARRs (average room rent) will be a collective goal for the industry in 2022. We sense proclivity towards personalization of experiences, staycations at untapped leisure destinations, hybrid models for business and corporate meetings, inclination towards intimate weddings, and small-scale, cozy social events to continue," adds Dhawan.
Also Read: High commodity prices to push current account deficit to 1.5% of GDP in FY22
Also Read: Trade gap widens to record high in November; CAD set to widen sharply
The year 2021 was a mixed bag for the hotel industry in the country. It began on a high note with a sharp revival in the leisure sector, leading to industry-wide occupancy to reach nearly 50 per cent in the first quarter, the highest since the pandemic started.
However, the devastating second wave resulted in subdued demand, but it also provided an opportunity for hoteliers to think out of the box and proactively focus on alternative customer segments and ancillary revenue streams – think signature meals and laundry services. While the Taj group of hotels launched Qmin, a food delivery service in 2020, it expanded it significantly in 2021 to 19 cities. It plans to open 15 new Qmin outlets – gourmet stores in select hotels.
Similarly, ITC Hotels food delivery model -- Gourmet Couch – that was launched in 2020, was expanded to more cities in 2021. In addition, it also launched the Biryani and Pulao collection. “In some ways Covid-19 pressed the re-set button and ushered in new business models that are definitely here to stay and will continue to play a huge role in 2022," says Anil Chaddha CEO, ITC Hotels. Adding that digitisation has actually led and redefined the way we work.
“Workcaytion and Petcaytion packages along with safe Staycations at ITC Hotels saw a huge rise as people chose to travel at motorable distances,” he says.
According the to the JLL Hotel Momentum India report, India’s hospitality industry witnessed a growth of 169.4 per cent in RevPAR (revenue per available room) from July to September 2021 (Q3) over the same period last year due to a low base of Q3 2020. Furthermore, the sector saw a 122.9 per cent q-o-q growth in RevPAR in Q3 2021 as compared to Q2 2021, because of the strong recovery in leisure demand as travel restrictions were eased post the second wave of the pandemic.
Total number of signings in Q3 of 2021 stood at 32 hotels comprising 2,624 keys, recording a growth of 13.4 per cent compared to the same period last year. Fifteen of the new signings (47% of total properties signed) are conversions of old hotels. Domestic operators dominated signings over international operators with the ratio of 57:43 in terms of inventory volume.
The country saw many new hotels opening their doors. Among these were the Raffles Udaipur, Novotel Chandigarh and Ibis Mumbai Vikhroli from the Accor group and the Six Senses Resort in Sawai Madhopur, Holiday Inn Zirakhpur Chandigarh, and Holiday Inn Goa Candolim from the IHG group. ITC Hotels experienced great expansion in Brand Welcomhotel. Starting with the launch of Welcomhotel Shimla in December 2020, it soon opened Welcomhotel Chail and Welcomhotel Katra and then Welcomhotel Bhubaneswar. “Steering the asset right strategy across the length and breadth of the country, ITC Hotels announced launch of two new brands in 2021.
Mementos by ITC Hotels is the latest luxury brand which brings together a collection of unique hotels across varied destinations. Brand Storii in the premium segment is a collection of handpicked properties steeped in history. Each Storii is different by character, design or service. Mementos Udaipur and Jaipur have already been announced,” says Chaddha.
According to the Hotelivate Trends and Opportunities Report 2021, majority of the hotel brands are now entering tier 2, tier 3 and tier 4 markets, “identifying the unaccommodated demand prevalent in these cities. Consequently, 40 per cent of the hotels under active development are in these cities.” “By 2025/26, we anticipate an addition of approximately 36,599 branded rooms (under active development), taking the total supply to 1,80,646 (across the country) and growing the existing supply base by 25 per cent,” the report further adds.
Post Diwali and the wedding season, things were looking up for the hotel sector, but now with the threat of Omicron, the hotel sector has again been hit. Also the government has deferred the resumption of scheduled international flights to January 31, from December 15th.
“We don’t expect any business in the first quarter of 2022. Only if the threat starts receding by mid-Feb will we some hope in the summer months,” says Madhav Oza, Director of Mumbai-based travel company Blue Star Travels.
However, hoteliers are still being optimistic. “In 2022, we expect new trends and patterns to emerge. We've seen the horizons of the hospitality industry expand, giving us hope for a new year with better prospects. Domestic travel has been a key demand driver, and the primary source of business for hotels across categories ranging from economy to luxury in 2021, and we can expect this trend to continue in 2022 with people showing preference towards value-driven travel through trusted partners and branded hospitality chains,” says Puneet Dhawan, Senior VP Operations, Accor, India & South Asia.
Accor will open four new hotels in 2022. “Growth of ARRs (average room rent) will be a collective goal for the industry in 2022. We sense proclivity towards personalization of experiences, staycations at untapped leisure destinations, hybrid models for business and corporate meetings, inclination towards intimate weddings, and small-scale, cozy social events to continue," adds Dhawan.
Also Read: High commodity prices to push current account deficit to 1.5% of GDP in FY22
Also Read: Trade gap widens to record high in November; CAD set to widen sharply