CHENNAI: With international borders still sealed and no travellers in sight, the hospitality sector has taken a major hit during the pandemic.
The hotels are finding it difficult to stay afloat and occupancy levels across the State is barely 10 per cent. In Chennai city, it is a little better with 35 per cent.
The sector in State is staring at a loss close to Rs 8,000 by year-end, said Tamil Nadu Hotel Association President M Venkadasubbu.Even though some people are travelling within the country, the fear of Covid is keeping most of them away from hotels.
As a result, the hotels are offering as much as 50 per cent discount. Yet, there are hardly any takers.T Natarajan, CEO, GRT Hotels and Resorts and secretary of South India Hotels and Restaurants Association (SIHRA) says business travel has not yet started.
“The bookings in hotels are done by quarantine doctors and individual businesses which accounts to 10 to 12 per cent occupancy. However, resorts are doing well in the weekends, wherein the occupancy is 30 to 35 per cent. Interestingly, the major setback for hotels is meetings through online apps."
“Usually, business meetings used are held in hotels, but the situation has changed,” he said.
Only solace are the weddings, but it also comes with restrictions. “Only 100 persons are allowed to attend the functions,” says Venkadasubbu. Restaurants are fairing poorly too as most of the tables are empty on most day, says Natarajan.
According to Mandeep Lamba, President (South Asia) HVS ANAROCK, the sector is likely to incur an estimated revenue loss of approximately Rs 90,000 crore in 2020.
Occupancy and average daily rate (ADR) are expected to reach pre-COVID levels by 2022 and 2023 respectively - assuming that a vaccine is in place by early 2021 and becomes widely available before the end of year.
Most hotels have curated special packages like ‘work-from-hotel’ and food and beverages packages for workers from IT sector. But this has not sparked much enthusiasm, says Venkadasubbu.
In an effort to cut losses, many star hotels have started delivering food at doorstep and some are making Rs 30,000-Rs 40,000 a day.
“On an average a customer would prefer a food package at the rate of Rs 250, but this is not feasible,” says Natarajan.“The sector provides livelihood to around 10 million people and the government should help us withstand the pandemic,” says Venkadasubbu.
“The government should reduce the GST to eight per cent for hotels,” says Natarajan. It can follow the London model by giving incentives.
“In hotels in United Kingdon, the government pays up 50 per cent of the expenses incurred by customer. In Thailand it is 40 per cent,” says Venkadasubbu.
Natarajan claims life is worse for tour operators and agents and some have taken to selling vegetables to survive.