Hotels reeling from the outbreak of the coronavirus are cutting room rates and starting to reduce staff, an effort to stabilise the business after plunging revenue, canceled group events and sharp declines in corporate travel. As booking cancellations over coronavirus concerns rock the hospitality industry, some luxury hotels in India are slashing room rates, introducing cost-cutting measures and shutting down many of their properties to weather the crisis.
Some hotels are shutting down floors that are not occupied, cutting down on staff in hotels and encouraging them to go on leave, and reducing the number of buffet spreads in restaurants to keep costs down, as guest cut back on travel and events to minimise chances of being infected.
The tourist visa ban has added to their woes. Several governments have issued travel advisories and gone into lockdown mode to contain the spread of Covid-19. Worldwide, hotels have taken a massive hit on business as countries impose restrictions and curbs on travel.
For the immediate quarter and probably the next, growth numbers are likely to get impacted as most witness a dip in occupancies and revenues this month following the Coronavirus outbreak in China. But the impact has been far more acute for the luxury segment where a large percentage of clients are foreigners.
Kanika Hasrat – General Manager, Taj City Centre Gurugram says, “India is experiencing a decline in the number of foreign tourists and business travellers. Hotels have seen a decline in international arrivals, too, and companies are postponing events and conferences in the wake of this deadly outbreak.”
The tourism industry is still trying to assess the gravity and damage of the ongoing situation, particularly after the new restrictions on travel regulations between China and India, as well as other badly affected countries such as Iran, Singapore, Dubai and Italy.
Big industry players in the hospitality segment are, for now, shutting their hotels in China to safeguard the health of existing employees in the organisation. Hilton has closed 150 of its hotels, accounting for a total of 33,000 rooms, owing to travellers’ concerns over contracting coronavirus. This step was announced by Hilton’sCEO Christopher Nassetta on the company’s post-earnings conference call.
The tourism sector is considered to be one of the main contributors to both the hospitality and the FMCG industries. Amit Khare, General Manager, Trident Gurgaon says, “With the fall in the number of travellers, the FMCG industry, along with tourism, witnessed an adverse effect on their revenues.”
Business and leisure trips, not just to China but across the Asian continent, are being cancelled and travel agents and operators are bearing the brunt of it. Hasrat says, “The hospitality industry can expect the impact to last anywhere between six to nine months as international bookings at hotels are either being deferred or postponed.”
