THE BIG BANG ‘REVIVAL’

With the travel bug biting more and more people as the Covid fears wane the hospitality and tourism sector is seeing a major turnaround in its fortunes. This is aptly reflected in the strong financial performance reported by almost all listed hotels

The travel and hospitality sector in the country is back in business. After being hobbled for almost two years by closures, lockdowns, lay-offs and losses, the hotel industry seems to be jogging back towards profitability. All key operating metrics like revenue per available room (RevPAR), average room rate (ARR) and occupancy room rate (ORR) are way ahead of pre-pandemic levels during the first quarter ended June 30, 2022. With international travel set to pick up further in the second, third and fourth quarter, the second half of financial year 2022-23 is looking much healthier.

“While the occupancy room rate (ORR) remained above pre-pandemic level throughout Q1FY23 at around 65 per cent (up about 2 percentage points versus Q1FY20), ARR was on a rise in April (4 per cent)/ May (9  per cent)/ June 2022 (10 per cent) versus April/ May/ June 2019, respectively,” said a Motilal Oswal Financial Services report dated August 24.

The stock prices of some of the major listed hotels such as The Indian Hotels Company (Taj Group), Lemon Tree Hotels and Chalet Hotels have risen 50-55 per cent in the first seven months of 2022 suggesting active investors interest, according to a senior market analyst.

Boosting the recovery trends, the Union Cabinet recently enhanced the corpus of sovereign-guaranteed credit facility for small enterprises, Emergency Credit Line Guarantee Scheme (ECLGS), from Rs 4.5 lakh crore to Rs 5 lakh crore, exclusively for the hospitality sector. “The Cabinet has approved the proposal to raise the limit of Emergency Credit Line Guarantee Scheme for travel, tourism and hospitality sectors,” Anurag Thakur, Union minister for Information and Broadcasting said.