ARRs Remain at a 20-25% Discount to pre-Covid levels: ICRA
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The Omicron variant and the fear of an intense third wave of the pandemic has been a sentiment dampener over the last one week or so; and some cut down in discretionary business travel has been witnessed, opines Vinutaa S, Assistant Vice President & Sector Head, ICRA.
However, hoteliers have not witnessed any major cancellations of retail/leisure bookings or events thus far. The situation is evolving, and demand will depend on the efficacy of vaccines and a further Covid wave, she adds.
According to ICRA, while the first few months of FY2022 were impacted because of Covid 2.0, the hotel industry witnessed faster-than-expected ramp up in Q2 and Q3 FY2022. This was because of easing restrictions, high pace of vaccination and pent-up demand, which has resulted in leisure travel within the country. Domestic business travel also started picking up, mainly to project sites/manufacturing locations from specific sectors.
The demand upswing resulted in pickup in occupancies, with 50%+ occupancy in Oct and Nov-21. Some premium hotels, especially at leisure destinations, also witnessed ARRs bounce back to pre-Covid levels in the recent weeks. However, on a pan-India basis, ARRs still remain at a 20-25% discount to pre-Covid levels as international and business-oriented traffic is yet to come back/recover in a meaningful manner, Vinutaa S, informs.