The country’s hotel industry is staring at a $2 billion shortfall in revenues in the current fiscal – that’s about 30 per cent below the previous year – as India copes with a double whammy of terror attacks and a global economic downturn.
“This has caused massive cancellations of hotel bookings throughout the country. It is estimated that the Indian hotel industry is to face a consolidated revenue decline of around Rs 9,731 crore between 2008/09 and 2009/10, from 2007/08 revenues,” M.P. Purushothaman, president of the Federation of Hotel and Restaurant Associations of India (FHRAI) said in a letter to Finance Minister Pranab Mukherjee that demanded concessions to aid the industry including an infrastructure status.
Industry executives say revenues in 2008/09 are estimated to have held steady around Rs 33,000 crore compared with the previous year, thanks mainly to advance bookings, but the scars of the 26/11 attacks in Mumbai are showing, with cancellations and poor bookings hitting the business.
They say inbound traffic of overseas visitors dropped by 10 to 18 per cent in the January-March quarter. “Occupancy levels for our group have shown a decrease of 10-15 per cent, mostly as a result of the global economic downturn and post 26/11,” said Jyotsna Suri, CMD at The Lalit Suri Hospitality Group. “Even though the situation is stabilising, we expect decline of 6-8 per cent in 2009-10.” “Losses are huge and both our revenue and occupancy declined at least 20 per cent and bookings for the upcoming winter season do not look great as of now,” said Anil Madhok, MD, Sarovar Hotels and Resorts Ltd.
“Occupancy dropped 15-20 per cent but we used this opportunity for upgrading and renovating properties,” said Rajiv Makin, director, commercial and marketing, Ashok Group.