Omicron Dampens Sentiments For Hotel Industry: ICRA
Hotelier India|February 2022
Prolonged lockdowns will impact Q4 FY2022 operating metrics
Omicron Dampens Sentiments For Hotel Industry: ICRA

The hotel industry demand has recovered at a sharp pace post COVID 2.0, aided by easing restrictions, high pace of vaccination and pent-up demand. The demand for hotel stays in the last few months has come primarily from staycations, weddings, travel to driveable leisure destinations, and special purpose groups. Biscations (working from a resort) also saw traction in Q2 and the early part of Q3 FY2022.

Business travel pickup, mainly to project sites/manufacturing locations, was also seen in specific sectors, although it remained low compared to pre-COVID levels. However, demand will be curtailed in Q4 FY2022, at least in January 2022, because of the COVID-19 wave.

Said Vinutaa S, Assistant VP and Sector Head, ICRA, “The pan-India premium hotel occupancy picked up from July 2021 post relaxation of lockdown and was 50%+ in Q3 FY2022, better than our earlier expectations. The QoQ revenue improvement was ~117% in Q2 FY2022 and is expected to improve by another 15% sequentially in Q3 FY2022, supported by the healthy festive season travel witnessed. For 9M FY2022, the estimated the pan-India premium hotel occupancy was ~40-42% (up from ~20-22% in 9M FY2021).

The pan-India ARRs were at a 25-30% discount to pre-COVID levels, although some highend hotels and leisure destinations have reported pre- COVID ARRs in the last few months. The Pan-India RevPAR remained 50-55% lower than pre- COVID levels and at ~60-65% discount to the FY2009 peak for the said period.

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