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Unlock 2.0 To Resurrect The Ailing Hospitality Industry

Innovative options like wellness travel in non-metros have led to a surge in demand amongst tourists

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The Indian hospital industry experienced its darkest phase in 2020 witnessing massive losses due to the spread of corona pandemic. The burgeoning tourism industry was swivelling at break-neck speed before the Sars-Cov-19 pandemic brought it to an abrupt halt. Federation of Hotel & Restaurant Associations of India (FHRAI) has estimated that the Indian hotel industry took a hit of over Rs.1.30 lakh crore in revenues for the fiscal year 2020-21.

As the economic fallout of the pandemic post the second wave continues, it has impacted the long-term viability of many businesses. As per ICRA report, the intensity of 'Covid 2.0' applied temporary brakes on the industry's recovery pathderailing it by 6-8 months, and a return to the pre-pandemic levels is now expected only by FY24. However, the hospitality industry has been tirelessly trying to claw back to resurrect the sector as the government initiates the ‘Unlock 2.0’. 

Many states that opened up in Q3/Q4 FY 2021 and welcomed tourists were forced to shut down due to the second wave which was a setback to the hospitality industry. However, this time around the lockdowns and restrictions were more localised. Many hotels across India operated at a reduced occupancy rate or had become Covid-19 centres for travellers who had to undergo a mandatory quarantine at rates stipulated by the government. 

The impact was also deeply felt by lakhs of employees who were awarded the pink slips, cut in salaries and even leave without pay. Even the allied industries like Airlines and Railways had to bear the burnt. Whilst Railways is a public concern and equity is infused by the government, the private airline industry which gives a fillip to the hospitality sector had to restrict its operations overseas and also within India. 


The Hotel Association of India (HAI) released discouraging figures which stated that more than 40 per cent of hotels had to either shut or are on the brink of closure, which has affected 70 per cent of its staffers. As part of resurrecting the hospitality sector, HAI urged the government to initiate measures and infuse liquidity through moratorium, restructuring and changes to the Emergency Credit Line Guarantee Scheme. Also, making the hospitality industry part of the priority lending sector will help tame further financial hazards and make monetary infusion easier. These steps will ensure respite to the bleeding industry and initiate a possible recovery to this sector. 


While major cities were caught in the Covid radar, there were still a plethora of options for travellers who opted for staycations and wanted to experience the countryside. Many opted for wellness resorts like Atmantan near Pune which is located away from the hustle and bustle of metropolitan life to relax, detox and de-stress. The serene calm of Atamantan-like resorts ensures continuity to the sector with the sole purpose of rejuvenation. Many such centres have witnessed high capacity owing to the stressful 18-months of work from home. It has also allowed non-regular patrons to experience a different form of ‘wellness’ vacation with their families.  Offbeat resorts have their tryst with nature and are in great demand as it is at a distance from population and closer to nature. 


With the diminishing coronavirus cases and push to vaccination drive, states like Maharashtra, Karnataka, Uttarakhand, among others have initiated measures to unlock to give a fillip to the hospitality industry. With the unlocking of most states, one can expect high degree of pan-India travel as aspiring Indians would want to move out of their dwellings and explore newer horizons. They have become innovative with their choices and locations and are ready to explore India’s lesser-seen segments. While performance of business hotels has not yet fully recovered, leisure markets led by domestic travellers have showcased some resilience both after the first and second wave of pandemic. Accordingly, it is expected that in the short term, those Indians who can afford to travel will choose destinations within India where in spread of COVID-19 is under control. This will augur well for India’s resurgence and help the ailing sector back to its feet.


However threat of delayed recovery on account of second Covid wave remains as various states imposed partial/full lockdown from Feb’21 onwards, which started un-locking from mid-June’21. The State/Central Governments are still imposing restrictions on domestic & international travels, size of gatherings, cap on occupancy etc. which are likely to adversely impact the recovery in the hospitality segment. Accordingly demand revival in the hospitality segment will depend upon the intensity of second wave of Covid, speed of vaccination drive, demand recovery in corporate segment etc.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Charu Singh

President, TFCI

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