HOSPITALITY WILL HAVE TO BE NIMBLE-FOOTED AND VISIONARY

The JLL report looks at how the hospitality industry will be required to strategise and hold on to the room rates, instead of discounting them, to deal with a world changed by the pandemic

The year 2020 started on a sombre note for the tourism industry with the spread of the COVID-19, which first emerged on a wide scale in China, before engulfing Asia Pacific and spreading to the entire world.

There has been a sharp decline in travel across the region, as many companies have imposed travel restrictions on their employees. This has also led to additional declines in leisure travel across the world. Significant flight and hotel cancellations have been witnessed across major markets for both February and March 2020. If there is no improvement in the current scenario over the next month, this could be a difficult year for tourism in India and globally.

India has a strong domestic base, which we feel would continue to be the key driver of growth in this sector, this year. With continued emphasis on enhancing affordable air connectivity, development of tourism circuits under government schemes and expansion of hotel and tourism infrastructure, we hope the country will be able to push through various setbacks of the first quarter of the year and drive tourism activity.

In 2020, the hotel development pipeline is likely to be impacted. Real estate developers and investors would prefer to secure cash flows to see off the current global crises triggered by the pandemic.

The focus shifts to Tier-1 cities

Focus on development could again shift towards Tier-1 cities, which are fundamentally stronger business-driven markets. On the debt side, new hotel development will be impacted as there will be limited lender appetite, particularly in more volatile resort markets.