The recent terror attacks have hurt the business prospects of the hospitality sector, with occupancy levels set to dip 55%, states a recent research report by Centrum Broking. Tourist inflows for the calendar year are expected to be 4.8% at 5.27 million as compared to an earlier estimate of 9.8% arrivals. The report also states that three major players like Indian Hotels, Hotel Leela and East Indian hotels (EIH) will be impacted by lower occupancies and leaner average rate per room (ARR).
Consequently, there will be an occupancy dip of nearly 55% at major locations across India. However, on a positive note, the report suggests that there will be a correction of nearly 15% on the ARR after the current calendar year comes to a close.
The report foresees Indian Hotels directly getting impacted to the tune of Rs 65 crore with 565 (Taj Mahal Palace and Towers, Mumbai) going out of business in the peak season. Also, Indian Hotels, along with other players, will see a 20-30% correction in ARRs amidst slowing demand, higher cancellation and low occupancy levels.
However, a spokesperson from the Taj Group of Hotels maintains that they do not disclose the occupancy levels at any point of time. Similarly, other renowned players in the hospitality sector did not comment on whether their occupancy levels were impacted by the recent terror attacks in Mumbai. The report also reveals that since the Trident hotel run by the EIH will be operational soon, it will limit its losses to Rs 45 crore.