Foreign guests likely to stay away from India next year as well, says PRS Oberoi

Foreign guests will likely stay away from India not just this year but the next as well, EIH executive chairman PRS Oberoi has said. EIH is the listed entity of The Oberoi Group that runs hotels under Oberoi and Trident brands in the country.

The travel industry was among the first to be affected by the pandemic and will, in all probability, be the last to recover, Oberoi said in his address to shareholders in the latest annual report.

“Due to the COVID- 19 pandemic, we expect very few foreign travellers to visit India in the current year and in the next year. The hospitality industry must, therefore, concentrate on domestic travellers,” he said.

In 2019, 11 million foreigners visited India. More than 2.5 million of them came through the tourist e-visa scheme, a growth of 24% over the previous year. Visitors from the US accounted for 9% of the travellers, the United Kingdom 6% and Canada and Australia 2% each, says a report by Moneycontrol.

Over the years, domestic travellers have outstripped foreign visitors, even in the luxury hotel segments but overseas guests still account for around 30-35% of the guests, as per industry estimates.

For the Taj Hotels Group, one of India’s biggest hotel chains, the composition of foreign guests varies from as little as 1% (Ginger Hotels) going up to 50% (Taj Hotels), the Moneycontrol report observes.

Oberoi Hotels operate only in the premium and luxury segments, with the Trident and Oberoi brands spread across cities like Delhi, Mumbai and Udaipur. A significant percentage of revenue comes from foreign travellers for the Oberoi Group.

“The contribution of international guests is 20 to 25%. When it comes to palaces, international travellers make up almost 50%. But the palaces are not that large in numbers. International business is very important for us because it is high paying but it’s not the biggest volume driver for us,” Puneet Chhatwal, managing director and chief executive of Tata Group-promoted Indian Hotels Company, said in a recent analyst call, the Moneycontrol report says.

About 10 years ago, the foreign guest composition staying in hotels in India stood at as high as 70%. Several of India’s neighbours such as Sri Lanka, Bhutan, Maldives, Mauritius and Nepal depend on foreign travellers for revenue generation, the report adds.