As we entered the national lockdown, the effect of the global coronavirus pandemic on India’s hospitality segment became even more severe. Closed hotels meant idle staff, direct impact on revenues, earnings and cash flows, debt service challenges and stalled projects. The hotel sector creates a huge multiplier benefit through indirect employment. That reverses sharply when hotels are shut and there is no purchase of goods or services, when there is no sale to be made.
Horwath HTL conducted a Sentiment Survey to understand the depth of the crisis, the mitigating measures applied and the areas requiring supportive measures. The findings.
India’s historical international visitor arrivals
Foreign tourist arrivals are an important element for the nation’s economy and hotel sectors. The pace of growth has slackened in the last two years. Numbers will decline substantially through 2020, as cross-border travel remains severely monitored over the next quarter and maybe longer.
Assessing the influence of COVID-19
It is heartening to see that at least a third of the respondents expect the influence to last only for a quarter. What is worrisome is that another one-third see the impact lasting through 2020 and possibly into Q1 of 2021. We will soon enter a traditionally slower business period, in Q2 2020 and more so in Q3 2020. That may have influenced the thinking of 35% of respondents who see the impact spread over a 4-6 month period.
The effect on a hotel’s performance
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