Coronavirus impact: Hotels to incur Rs 90,000 crore revenue loss in 2020, says report

Occupancy across hotels in key cities witnessed a sharp decline, as travel restrictions intensified and India entered a nationwide lockdown towards the end of March 2020. The April edition of HVS ANAROCK hotels & hospitality report showed occupancy in India declining by more than half, close to 53 per cent, in March 2020 compared to the corresponding period last year.

However, the fall was less steep compared to key Asian markets, which fell 65.4 per cent in China, 64.7 per cent in Malaysia, 62.6 per cent in Thailand and 53.6 per cent in Singapore, during the same period.  With this, other key metrics, the average daily rate (ADR) and revenue per available room (RevPAR) of the top 13 markets in India too showed signs of distress. The ADR, which indicates the average realised room rentals per day, saw a month-on-month (m-o-m) drop of 14 per cent and a year-on year (y-o-y) drop of 6.8 per cent in March. The RevPAR, on the other hand, collapsed significantly by 64 per cent, m-o-m and 56 per cent on a y-o-y basis.

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The report expects the overall revenue of the Indian hotel sector to decline approximately by Rs 90,000 crore in 2020, reflecting an erosion of 57 per cent compared to last year. "Given the evolving scenario, we have revisited our assumptions and revised our previous estimates of the overall revenue loss that the industry will face in 2020," it added. The revenue loss in the organised segment is expected to be around Rs 40,309 crore in 2020 with a tad higher revenue loss of Rs 41,126 crore in the unorganised category, as per the revised estimates as on April 17, 2020. The revenue of the semi-organised segment is expected to decline by Rs 8,379 crore. Moreover, the organised segment is expected to witness a 47.9 per cent reduction in occupancy and 57.8 per cent drop in ReVPAr in 2020.

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