Hotels, hospitality sectors severely impacted by COVID-19 pandemic: JLL

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NEW DELHI: The hotels and hospitality sector in India has declined sharply in the first quarter of 2020, as the COVID-19 outbreak impacts various segments of the sector, according to global real estate consultant JLL.

Coming off a high performance base in 2019, the COVID-19 outbreak and the containment measures introduced by the government have resulted in a severe drop in foreign and domestic travel, across both the tourism and business traveller segments, the report ‘India Hospitality Industry Review 2019’ has said.

“In the third week of March 2020, at an all-India level, the hotels sector witnessed a decline of more than 65 per cent in occupancy levels as compared to the same period of the previous year,” it added.

As travel restrictions around the world intensified further, second and third quarters of 2020 are likely to be similarly impacted, it added.

At least 30 per cent of hotel and hospitality industry revenue could be impacted if situation doesn’t improve by the end of June 2020. With more than 60 per cent of organised hotels in India already shut and several others operational with single digit occupancies, a recovery will be gradual, the report said.

Industry estimates indicate that in India, branded and organised hotels annual revenue is Rs 38,000 crore, it added.

“As the sector navigates turbulent times through the pandemic, growth and development of hotels in India is also likely to be impacted in the next two years. Any dry powder that is available today will focus more on buying operating assets rather than building new ones,” JLL India CEO and Country Head Ramesh Nair said.

The strong performance of the office sector was the key to robust hotel market performance across the top 7 business cities of India, the report said.

Source: Press Trust of India