Full revival in demand for hospitality industry in key metros by May: IHCL CEO

By: |
March 9, 2021 3:51 AM

“It (demand from 10 big cities) is already coming back. It is not at the same level of leisure travel, which is normal. Corporate India has started moving. Now for corporate, there is a movement in middle and lower management levels,” IHCL MD & CEO Puneet Chhatwal said.

The company is India's largest hospitality player with 148 hotels in the country. Chhatwal is also the president of the Hotel Association of India.

While leisure travel is doing well at present, a full revival in demand for the hospitality industry in top metro cities is likely to take place by May on the back of improving corporate travel, according to Indian Hotels Company (IHCL), a Tata group hospitality arm.

“It (demand from 10 big cities) is already coming back. It is not at the same level of leisure travel, which is normal. Corporate India has started moving. Now for corporate, there is a movement in middle and lower management levels,” IHCL MD & CEO Puneet Chhatwal said.

The company is India’s largest hospitality player with 148 hotels in the country. Chhatwal is also the president of the Hotel Association of India.

Leisure travel is doing well at present as people are visiting popular domestic destinations like Goa, Rajasthan, Rishikesh and parts of Kerala during holidays and vacations after easing of the long Covid-19-induced travel restrictions. “In another three months — March, April and May — I think there will be full revival in demand from metros, subject to no mutation of virus in India, no big waves and the speed of vaccination,” Chhatwal told FE.

He said metros like Delhi, Mumbai and Bengaluru are good markets for IHCL and it is important that these markets do well in terms of business. During the pre-Covid time, around 40% of the business used to come from 10 big cities. A full revival of corporate travel is very crucial for the domestic hospitality industry as around 60% of the business used to come from this segment before the Covid-19 outbreak. Currently, corporate travel accounts for around 40% of the business while around 60% is from leisure travel.

“We have definitely seen good recoveries in December, January and February. The outlook is more positive than it was a few months ago. Travel is definitely related to the level of vaccination,” Chhatwal said.

After declaring its results for the third quarter in February, IHCL said its business has been impacted during the period on account of Covid-19. “The Group witnessed softer revenues due to the lockdown imposed during the first six months of the year and a significant number of the Group’s hotels had to be shut down. With the unlocking of restrictions, all the Group’s hotels have been opened and business is expected to gradually improve across all hotels. During the current quarter, the Group witnessed some signs of recovery of demand, especially in leisure destinations as compared to previous quarter,” he said.

Consolidated revenue from operations of the company, which has hotels under the Taj, SeleQtions, Vivanta and Ginger brands, for October-December last year fell to `559.86 crore from `1,372.72 crore for the same period last year.

The hospitality major, however, is going ahead with its expansion plans. There are 51 properties in the pipeline — 13 Taj, 3 SeleQtions, 11 Vivanta and 24 Ginger.

IHCL, in December last year, announced the opening of Taj Chia Kutir Resort & Spa, Darjeeling, in West Bengal. The resort is situated in the Makaibari Tea Estate. This new hotel has been developed by Kolkata-based Ambuja Neotia Group while the Tata group hospitality arm is managing it.

IHCL, in partnership with Ambuja Neotia Group, will open four more hotels in the East– two in West Bengal, and one each in Sikkim and Bihar. They are under construction. “One property in Kolkata will partially open in three months, then another hotel will open up. Next year, we will open Gangtok and Patna hotels. East is a very important region for us,” Chhatwal said.

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