Effect of COVID-19 on Hospitality Industry

The economic damage caused by COVID-19 novel corona virus pandemic is difficult to predict. However, there is widespread agreement among economists that it will have severe negative impacts on global economy. The hospitality and leisure clients were the first ones that experienced bad weather conditions but they are moving quickly and remain focused to understand and quantify the operational and financial impact for their business. The hospitality industry showing maturity, by working together, is showing true hospitality commitments by helping the society, where it can. With the Mission Begin again and the subsequent unlocks, the hotels were allowed to open, with SOPs. Ashok Malkani tries to gauge the impact of the lockdown on the hotel industry and how it is meeting the challenge of keeping the properties’ environment safe for the clients.

- Ashok Malkani

The cascading effect of coronavirus pandemic has hit the hospitality industry and both, the hotel chains as well as the stand alone hotels are facing a difficult time. According to Hotelivate, a hospitality consultancy firm founded by the erstwhile team of HVS India, the Indian hospitality industry is staring at losses of over Rs.130-155 crore, whereas the alternate accommodation segment is likely to make losses of over Rs. 420-470 crore. According to the report, “March has borne the brunt of many large-scale cancellations across the corporate, MICE and leisure segments. Notably, the extent of this lost business has primarily been seen across the top eight markets. Various Tier Two and Tier Three hotel markets in India continue to witness a small erosion in business and occupancies, in at least the first half of March, were only partially lower despite the spread of the virus in some states.”

Vineet Verma, Executive Director & CEO, Brigade Hospitality Services Limited says, “COVID 19 has literally crippled economies worldwide and there are no signs of an early recovery. The hospitality sector has been the worst hit, with occupancies since March having crashed to near Zero in many cases. Several hotels have been compelled to shut down and we fear many more will follow if the situation is not brought under control soon. The owners are beset with problems. There are bank loans to discharge, statutory payments to make whereas our revenues are literally non-existent. We are anxiously waiting for some relief packages to be announced by the Government that can help the hospitality sector somehow tide over the crisis.”