COVID-19 batters Bengaluru hotels’ occupancy, tariffs

Bengaluru: Bengaluru five-star hotels occupancy rate has plummeted to single digits in the past two months due to the havoc that COVID-19 wreaked on their business amid the lockdown, an official said on Sunday.

“For the past two months, occupancy in Bengaluru five star hotels has plummeted to single digits in the range of 5-10 percent,” a city-based senior hotel executive told.

From trending at 75-80 percent occupancy in normal times, the occupancy has fallen drastically because of coronavirus and travel restrictions.

“With extremely low occupancy, room rents which used to rule at Rs 7,000-8,000 per day have been reduced to around Rs 2,000-3,000 in five-star hotels, including luxury properties such as Leela, Taj, Marriott and others,” said a hospitality industry source, quoting a few big industry players.

With five-star hotels themselves discounting their room tariffs by such a huge amount, budget hotels like Ginger, which operate in the range of Rs 2,000-3000 normally have been compelled to reduce their tariffs further.

“Because five-star hotels themselves are quoting such less room tariff, many guests are not visiting budget hotels,” the source said.

Incidentally, several large IT companies which used to lodge some of their employees in the hotels, and contribute major business to the hotels stopped that practice to tie up with local paying guest (PGs) accommodations and local hotels.

According to the hotel executive, accommodating an IT employee for a week in a hotel would cost the same for a month in the PG accommodation, thereby achieving significant savings.

“Some of the companies which have resorted to this PG strategy include Accenture, TCS and Cap Gemini which are mostly accommodating their unmarried employees,” said the source.

Emphasising on the intensity of the Covid blow, the official said hotels are not even in a position to recoup the operational costs.

Considering the costs incurred in providing water, electricity, new linen every day and laundry, the hotels are not able to recover even the costs incurred providing these services.

“This is not the case with PG accommodation. You don’t have to change the linen daily. Most people wash their own clothes. Hotels have to provide towels, soaps, shampoo and several other amenities,” the source said.

Not just the impact on room tariff, most hotels have also shut their in-house restaurants and bars for the past two months.

“All restaurants and bars have closed down in the past two months, except a trickle of orders in the room service department of hotels,” said the executive.

Reportedly, no layoffs have occurred in the lockdown but salaries have been slashed for some employees in hotels such as Hyatt, Leela and Lemon Tree.

Other Covid effects on Bengaluru hotels included some properties refraining from serving meat, fish and poultry to go just vegetarian.

Interestingly, to run the operations without exposing employees to the virus, most hotels are accommodating their employees in the rooms of the same hotel where they are working.

Airport hotel Taj Bangalore, near the Kempegowda International Airport, Ginger budget hotel at Whitefield and most other properties are following this practice.

“To ensure employees are not exposed to the virus when they go out, we are accommodating the employees in our hotel rooms itself,” said the source.

Meanwhile, the Karnataka government has procured 6,068 hotel rooms from 84 hotels, including five-star, three-star, and budget category hotels where returnees can afford to spend their 14-day compulsory quarantine.

Notable hotels which supplied rooms for quarantining included some Indian Hotels Company Ltd (IHCL) properties, the parent company of Taj Group of Hotels.

Five Bengaluru Taj hotels, Taj Yeshwantpur, Taj MG Road, Taj Whitefield, Taj Vivanta and Taj Westend supplied 805 rooms.

Other major contributors in the five-star category are Courtyard by Marriot Hotel at Hebbal and Marathalli, Royal Orchid, Old Airport Road, Novotel Bengaluru Outer Ring Road, Sheraton, Whitefield and others.

Amid the lockdown, 18 five-star hotels offering 2,565 rooms have been set aside for quarantining returnees at government fixed tariffs.

In the three-star category, 26 hotels are supplying 1,927 rooms.

Under the budget hotel category, properties such as Fab, Oyo, Treebo, Double Tree Suites and others have set aside 1,576 rooms.

Bruhat Bengaluru Mahanagara Palike (BBMP) Special Commissioner Ravikumar Surpur has fixed the room tariffs in the hotels, ranging from Rs 1,200 per day to around Rs 4,000.

According to a source from airport hotel Taj Bangalore, many international returnees from Vande Bharat flights are bargaining with the hotels.

“Many returnees are taking a fortnight quarantine package from the hotels, bargaining for a lesser room tariff,” the source told.

It remains to be seen how long the hotels have to wait to see normal times for regular business to resume.