Impact of COVID-19 on hotel industry: How the pandemic has affected the hotels in Vizag

The COVID-19 outbreak has adversely affected the global economy. From shutting down operations to bearing huge losses, several industries across the globe have been facing the brunt of the ongoing health crisis. And reeling from the unprecedented crisis is the hospitality sector in the country. With the nation-wide lockdown forcing the shutdown of hotels and restaurants, the sector has been incurring huge losses of revenue. The situation for hotel industry in Vizag is no different either. In a bid to understand how the hotels and small-scale food enterprises in Vizag are coping with the same, Yo! interacted with a few individuals from the hotel industry.

Talking about how the status quo has changed, Director of the Daspalla Group of Hotels, Mr. Venkat Krishna Gannamaneni, says, “The current times are challenging and have made the service industry rethink its hygiene practices. For events like weddings, we arrange a banquet hall that can accommodate around 300-400 people. However, the same hall will no longer be able to facilitate such large numbers, given the current scenario and the need to maintain physical distancing.”

Throwing light on how the business will be affected in Vizag he says, “Prior to the lockdown, a good season would have ensured a decent business for every hotel in the city. However, after the relaxation of the lockdown, I expect the hotel industry in Vizag to take at least 4 to 6 months before finding its feet again. Before the pandemic broke out, the room occupancy used to be 70-80% but it is likely to only be 20-25% after the lockdown. Similarly, a restaurant’s turnover might be reduced by at least 70%. It will slowly pick up once people feel more comfortable to come out .”

With regard to handling the staff and the challenges he has been facing at the management level, Mr. Gannamaneni adds, “Educating the staff to follow the safety guidelines has been no easy task either. Though they understand the gravity of the situation to some extent, we need to counsel them and reiterate the safety procedures so that the practice of hygiene becomes customary.” Once the hotel is fully operational, he plans to conduct training sessions for the staff. Additionally, the management is also putting together a special COVID-19 team that will keep an eye on the staff’s activities and the hotel’s safety practices to make sure the guidelines are followed.”

Sharing insights into how small-scale food businesses in Vizag have been faring during the lockdown, the chef/owner of Upland Bistro, Mr. Kalyan admits that he is concerned about his restaurant and other restauranteurs who are in a similar situation. He opines that big businesses and hotels that have already been doing well in Vizag before the lockdown have the capacity to survive through an event like this. However, small and independent businesses are in danger as the amount of income is low.

“I’m currently struggling to pay the rent for the restaurant space and the salaries of my staff,” he says. This issue is further exacerbated by the fact that he was supposed to move into a new and bigger location in an adjacent building. “There is an unspoken fear among all my peers as to how people will take to dining right after the lockdown, owing to several apprehensions. However, I hope that the government will take some action about the rent situation for all restaurant enterprises in general,” the chef shares.

D Manik Raj, Managing Director at Hotel Vivana too shares that the going has been challenging over the past few months. “Over the past two months, we’ve incurred a hefty loss. Paying electricity bills and salaries to employees is an added burden. In situations like these, taking care of the employees’ needs is our responsibility,” he shares. Saying that once the lockdown is lifted, the loss is likely to increase, Mr. Raj points out that the running and maintenance costs will certainly be high, considering the fact that people might be scared to travel, even after the normalcy is restored. “Extensive disinfection activities need to be carried out across the property, even in the future. Added to that, running banquet halls will turn equally challenging in accordance with the new restrictions,” he added.

Stating that the hotel has been shut ever since the announcement of lockdown, he informs that they’ve begun takeaway orders from 10 May with a few staff, to observe the inflow of orders. Sharing that the future of the hotel industry in Vizag in looks promising, despite the global pandemic, Mr. Raj expects the occupancy rate of hotels in Vizag to pick up by August or September. “If another COVID-19 wave doesn’t hit us, I believe things will be back to normal by December,” he quotes.

Sharing insights on how COVID-19 has impacted the hotel industry in Vizag, Pavan Kartheek MV, Vice-President of Hotel & Restaurant Association of Andhra Pradesh (HRAAP) says that the overall occupancy in the branded hotels segment in 2020 is estimated to decline by 16.7% – 20.5% as compared to 2019. The Average Daily Rates (ADRs) are estimated to decline by 7% to 8% in 2020, he added. Expecting that the industry might take at least 10 months from the crisis once the lockdown is lifted, he assured that the association is working towards helping the industry to recover faster.