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Hotel occupancy to touch 50% by year end, says Vilas Pawar

The lockdown due to COVID-19 impacted the hotel industry severely. Business were totally shut and hotels had to close its door. However, with drop in cases and availability of vaccines supported people’s desire to travel as part of the revenge tourism, Indian hotels are witnessing a gradual improvement in occupancies at pan-India level.

“There is a definite improvement which we have already started witnessing in our hotels. We are seeing occupancy improving to 30-35 per cent in most of our hotels. We expect occupancy to reach 50 to 60 per cent by end of the year,” Vilas Pawar, CEO, Choice Hotels India, said. He added that while occupancies are improving, the ARRs for the industry is stressed and it will take time to come back to the pre COVID level. “We used to command ARR of Rs 3500 in pre-COVID era across our hotels. The current ARR is Rs 2800,” he mentioned.

Replying to a question over the lower occupancies in hotels in metros, Pawar said that most of the companies across industry have adopted various cost cutting measures like reducing the office spaces, downsizing the team, restricting travel and others. He also mentioned that hotels having higher ARRs in metros are not getting good response from the market. While city hotels are stressed out, most of the resort hotels are performing better than earlier.

Commenting on the prospect for business travel to come back, the work from home culture is going to stay. “COVID -19 has made the company learn that the business can be run by curtailing travel. They have adopted virtual meetings. I think business travel will take a while to bounce back and it will not be at the pre-COVID level in the near future. And, this is a worrying point for the hotel industry,” Pawar opined.

He said that the industry reacted to the change induced by the pandemic by adopting various innovative measure to counter the impact. Hotels have adopted new SOPs to instill confidence among travelers. These SOPs are backed by technologies. “We had to reinvent ourselves. We had to cut down on staff, services and others. Adoption of health, safety and other security measures also increased the operating costs. We had to close few floors and rooms to cut the maintenance cost. The entire industry has faced severe situation,” he added.

On Choice Hotels India, he said that Choice Hotels India maintained its portfolio despite the lockdown. “We have currently 35 hotels in operation. We did not lose any hotel and kept on adding hotels in our portfolio. We opened 3 hotels in 2020 and are expecting to add 8-10 hotels in 2021. These hotels will be opened in Goa, Bodhgaya, Indore, Lucknow and other cities,” he revealed.

He said that like other hotels, Choice Hotels India is also adopting digital for marketing, promotion, and other brand building activities. “Our plan is to use social media and other digital platforms for expanding our reach in the market,” Pawar added. 

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