How hotels are betting on staycation

By: |
September 7, 2020 7:11 AM

According to Euromonitor International, the hospitality sector in India, is expected to shrink to $4,628.8 million in 2020

 Industry estimates peg the demand for city hotels to be around 25% of pre-Covid levels, and the overall demand to be less than 10%.Industry estimates peg the demand for city hotels to be around 25% of pre-Covid levels, and the overall demand to be less than 10%.

India’s travel and hospitality sector has steered its focus on domestic travel to revive the business. After the pandemic-induced lull, hotel chains have launched staycation and workation packages to woo consumers who have been locked up in their homes since mid-March.

According to Euromonitor International, the hospitality sector in India (lodging, hotels, short-term rentals and other lodging), which was worth $8,306 million in 2019, is expected to shrink to $4,628.8 million in 2020. As per a study by JLL, the revenue per available room declined by 43% in Delhi in July 2020, in comparison to the same period last year. Industry estimates peg the demand for city hotels to be around 25% of pre-Covid levels, and the overall demand to be less than 10%.

The path to recovery for the sector is expected to be longer than some other non-essential categories. Domestic leisure and domestic business travel will be the first two to recover, while international leisure, international business travel and MICE (meetings, incentives, conferences and events) will take a few more months.

Work and stay

The latest unlock guidelines indicate that states have eased restrictions on hotels and allowed them to function at full capacity, but their impact on the industry could be limited. “While there could be a slight uptick in demand, it will remain muted compared to pre-Covid levels. Consumers continue to be cautious and avoid any non-essential travel,” says Vishnu Vardhan, consultant, Euromonitor. Staycations and workations could be the most lucrative avenues for hotels to focus on in the short term, he adds.

The Indian Hotels Company Limited is offering its premium hotels located in cities for staycations. The Park, too, has introduced special staycation and daycation packages across its hotels. The Park’s daycation package caters to professionals looking for space to conduct business meetings. “This offer includes the use of a boardroom for a few hours once during the stay for organising meetings attended by not more than five people,” informs Yazad Marfatia, area director and head of sales, Apeejay Surrendra Park Hotels Limited.

SaffronStays, an aggregator of private vacation homes, is receiving enquiries for high-speed Wi-Fi at its homes from travellers who want to work away from home. Amanpreet Bajaj, GM, Airbnb – India, Southeast Asia, Hong Kong and Taiwan, says he has observed two trends. “The first is that of people booking homes for longer stays to work from. The second is a shift towards trips that are closer to home — many now prefer to stay within a day’s drive for the first trips out of their homes.”

Devendra Parulekar, founder, SaffronStays, points out that the biggest challenge for the revival of the industry has been the lack of uniformity and consistency in intra-state travel regulations. Now that the government has lifted all restrictions on intra-state travel, the hope is that domestic leisure travel will slowly bounce back.

Wooing guests

India is yet to open all its nature parks, public monuments and local attractions; yet to lift restrictions on swimming pools and spas. In such a scenario, the hospitality sector has the tough task of reviving domestic travel with limited entertainment and unwinding options. To address this lacuna, The Park is organising special dining experiences for its guests that allow them to interact and learn from the chefs preparing their meals.

Given that the sector is under substantial financial strain, hotels are not discounting room rates to attract customers, say industry executives. “However, they are offering lucrative freebies. For example, hotels are providing packages that may include all meals, waiving cancellation fees, and giving vouchers that could be redeemed later,” says Jaideep Dang, MD, hotels and hospitality group (India), JLL.

Read Also: How the Indian coffee industry is poised for revival

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