Indian hotel chains are seeing a sudden reversal in business as escalating tensions in West Asia disrupt international travel, triggering a wave of room cancellations in key markets such as Mumbai and Delhi.
Hospitality executives told FE that leading chains, including Indian Hotels Company (IHCL), which operates the Taj Hotels brand, and ITC Hotels have recorded 80-100 room cancellations a day in these cities since the conflict escalated at the start of the month.
The cancellations are translating into a daily revenue loss of roughly Rs 15-20 lakh per property in the two markets. Across multiple properties run by large chains, the industry estimates the combined loss could run up to about Rs 10 crore a day.
Travel Turbulence
The disruption marks a sharp shift from the strong demand hotels saw earlier this month when room rates surged during large events such as the ICC Men’s T20 World Cup knockout matches and major business gatherings including the India AI Summit.
Mumbai and the Delhi National Capital Region host a large concentration of premium hotels run by domestic and global chains. Under the Taj brand, IHCL operates eight properties in Mumbai, including Navi Mumbai, and six in the NCR region. ITC Hotels has two properties in Mumbai and three in NCR. International chains such as Marriott International operate 11 hotels in Mumbai and 13 in NCR, while Hyatt Hotels Corporation has two properties in Mumbai and four in NCR. The cities also house hotels run by the Oberoi Group and Accor, which operates brands such as Fairmont Hotels & Resorts, Sofitel, Novotel and Ibis Hotels.
Email queries sent to IHCL and ITC Hotels remained unanswered till the time of going to the press.
“With inbound traffic, both business and leisure, from the region virtually at a standstill, hotels across categories are dealing with a wave of cancellations,” a senior executive with a leading hotel chain said.
The disruption comes at a time when domestic travel demand is typically subdued. March is the last month of the financial year and coincides with school examinations in many states, resulting in lower occupancy from domestic business and leisure travellers.
“This year the month of Ramzaan also falls in March, which has further tempered domestic travel. That makes international traffic even more important for hotels. The disruption in travel from West Asia has therefore had a bigger impact,” another industry executive said.
Operational Gridlock
Mumbai and Delhi remain the core revenue markets for most hotel chains, followed by Bengaluru, Hyderabad, Chennai and Kolkata.
Executives said the impact is uneven across locations within cities. “For tourists from West Asia, South Mumbai is a preferred stay location, so hotels in that belt are seeing a sharper impact. Airport hotels are witnessing cancellations linked to business travel disruptions,” an executive with a homegrown luxury hotel chain said.
Delhi saw relatively stronger business in the first week of March because of scheduled events and conferences, but bookings have weakened since then, industry executives said.
Apart from the travel disruption, some smaller resorts and hotels are also facing operational constraints due to shortages in LPG supply. Several properties have informed guests that bookings may need to be cancelled if restaurant services cannot be maintained.
“The only cushion is that the first week of the month saw major events in several cities, including the T20 World Cup matches and large business conferences in Delhi,” the hospitality executive said. “But that surge may not be enough to offset the losses we are now seeing.”