Hotel Sector In India Shrinks By 47%; Worst-Hit Segment Of The Economy

by Suchismita Pal
Hotel Sector In India Shrinks By 47%; Worst-Hit Segment Of The Economy

The travel and hospitality industry has faced a massive blow due to the coronavirus pandemic. Restaurants, hotels, airlines and many other industries are facing the brunt of the lockdown. With inter-state and international borders closed for a prolonged period, the revenue earnings of the hotels have dropped drastically. A luxury resort in Kerala even converted its 500 feet swimming pool into a fish pond to recover the losses.  Ever since the nationwide lockdown, most of the hotels in India had been with almost zero income for a period of nearly five months. The hotel sector in India is one of the worst-hit segments in the economy.

Hotel SectorAccording to the recent data of National Statistical Office (NSO), the Indian hotel industry has shrunk by 47 percent in the April-June quarter. A year ago, the sector had witnessed a growth of 3.5 percent during the same period. The tourism industry had contributed nearly 9 percent to India’s GDP in 2019 and created about 87 million jobs.

The Hotels Had To Increase Their Functional Costs To Maintain The Heightened Safety Standards

Hotels in some Indian states had reopened as part of Unlock 3 of the nationwide lockdown. However, with border restrictions in place and ban on international travel, most of these hotels and lodges had been receiving only a few number of tourists. Even in places where the restrictions have been lifted, people are not travelling owing to the virus scare. Also, limited operational capacity and increased functional costs to maintain the heightened safety standards are posing challenges for the hotels after their reopening.

Hotel SectorThe Hotel Sector Might Have Job Losses As High As 40 Million: WTTC

The country’s economy declined by 23.9 percent in June quarter. This year, the country’s hotel sector faced a decline of 47 percent in April-June quarter, as amid the lockdown, people were forced to stay at home. World Travel and Tourism Council (WTTC) has stated that the coming year is going to be extremely difficult for the travel and tourism industry in India, with estimated revenue and job losses at $17 billion ( 12,42,06,33,50,000.00) and 40 million.

Also Read: Tourism & Hospitality Industry Face Major Loss Amidst Covid-19

COVID-19 Has Impacted Hotel Occupancy In 11 Major Cities

According to a report by JLL India, the COVID-19 pandemic has impacted the occupancy in hotels across 11 major cities, namely, Delhi, Gurugram, Mumbai, Goa, Kolkata, Hyderabad, Pune, Jaipur, Chennai, Bangalore and Ahmedabad. The occupancy rate of the hotels in these cities dropped by 5 to 17 percentage points. The revenue per available room (RevPAR) declined by 13 to 29 percent.  The occupancy level shrunk maximum in Delhi by 16.9 percentage points during January-March 2020, followed by Jaipur at 16.4 percentage points.

Hotel Sector

Also Read: Priests In Uttarakhand Now Working As Factory Workers As Religious Tourism Takes Hit

Travel Responsibly, Help The Local Economies Grow

If you’re travelling within the country post-pandemic, you can help the local economies revive in various ways. You can stay at homestays and local hotels instead of putting up at luxury hotels run by foreign companies. You can hire a local guide, shop from local markets and gorge on regional food. After all, apart from the compulsion to follow the social distancing guidelines, travelling should now include a lot of responsibility. Here are 6 simple ways in which you can assist in the growth of the Indian tourism industry: