Hospitality sector to take a hit amid new COVID-19 fears, stocks react

The hospitality sectors are most vulnerable to lockdown, it looks apprehensively towards the future as the cases spike in China.

The hike in COVID-19 cases in China has sounded alarm bells for the hospitality sector in India. Reportedly, the sector had touched an occupancy of 70%, reviving from the pandemic levels. Further, the number of tourists visiting Goa, too, exceeded the pre-covid levels in September, according to ICRA. More than 30.5 billion International visitors are expected to visit the country by 2028, bringing home more than 59 billion in revenue, according to estimates.

The COVID-19 has affected the hospitality sector in China too. The average occupancy rate in China fell from 70% to 40% due to the Delta variant. China’s hotel market declined from 671 yuan in 2019 to 460 in 2020. The hospitality sector is most vulnerable to losses as COVID-19 cases spike.


In India, the restrictions on travel may prove to be a deterrent for the hospitality sector, which is looking for further expansion, riding on G20 meetings. India is looking cautiously as the cases rise in China and other parts of the world. On December 21, India recorded less than two hundred cases and the number of active cases has come down to under five thousand.

Amid worries of an upcoming wave and a possible slowdown in the hospitality sector, investors heavily offloaded shares of Lemon Tree Hotels and India Hotels today. The stocks of Indian hotels saw a decline of 4.5% on Wednesday, while that of Lemon Tree Hotels saw a decline of 4.8%.

Addressing the situation, Rajesh Chawla, Senior Consultant Pulmonology and Critical Care, Indraprastha Apollo Hospitals, said ”We should follow COVID-19 appropriate behaviour. This is an indication that we may have to go back to wearing masks.”

Meanwhile, Union Health Minister Mansukh Mandaviya conducted a review meeting on Wednesday. The minister said that India is able to manage any situation. He urged the states to keep a vigil on the rising cases.