Business travel has come to the rescue of the hotel industry crawling its way out of economic slump. Not only have the top luxury hotels
reported occupancy of 50-75% but they have also seen an improvement of 85% in their revenue position.
A Ficci study on the impact of the economic slowdown on the hotel industry -- ‘Survey on Hotel Industry: Putting the Tourism Downturn Behind' -- has found that with the global economy showing signs of improvement, foreign tourist arrivals, particularly those who travel on business, are once again picking up. Corporate travel too has shown signs of revival. Significantly, within the leisure, business and leisure and business hotel categories, it is the business segment where a large proportion of hotels have seen occupancy of about 50%-75% over the last six months.
The survey — based on responses from 100 hotels in different categories of turnover from Rs 1 crore to Rs 1,400 crore -- shows that a majority of the five-star and five-star deluxe hotels have reported an occupancy level of about 50%-75% over the last six months. In terms of revenue position, players largely from the five-star and five-star deluxe category hotels have reported improvement over the last six months. While close to 40% of the hotels from the five-star category have seen an improvement in the revenue position, a whopping 85% of the hotels from the five-star deluxe segment have seen an improvement in revenues over the last two quarters.
In comparison, budget hotels (two-star and three-star) are still waiting to see some improvement in their performance as these depend largely on domestic tourists and a different segment of income earning foreign tourist.
The study reveals hotel industry is now on a recovery path. While 40% of hoteliers said performance of their industry is moderately to substantially better vis-a-vis the last six months, nearly 75% feel that the hotel industry's performance would improve in the next six months.
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