Hotels may see 20-40% fall in occupancy rates in Mar-May due to COVID-19

Hotels in India are staring at a steep 20 to 40 per cent fall in occupancy rates during the three months ending May as lockdowns due to COVID-19 (Coronavirus)

While the plunge in occupancy could be 30-40 per cent for mid-scale and two-star hotels, the same for four-star hotels and above categories could be 20-25 per cent for the next three months beginning March -- which is peak season due to summer holidays and weddings,citing the increasing number of cities going under full or partial lockdowns.

On revenue side, hotels under the four-star or above categories could see 65-70 per cent fall in revenue per available room, while for two-star hotels it could be 50-60 per cent.

During the global financial crisis, the average absolute occupancy rates fell by over 9 per cent, with the highest fall being 10.40 per cent for four-star and above hotels, followed by three-stars at 8.5 per cent.

Markets like Singapore, Indonesia and Hong Kong, where the outbreak began in January, have seen sharp decline in occupancy rates -- much higher than seen during the SARS outbreak in 2003 when it fell to sub-20 per cent from around 70 per cent in China.