The COVID-19 situation remains fluid and uncertainty still looms on the possible economic impact of the outbreak, according to Samantak Das, Executive Director and Head of Research, REIS, JLL.
“Given that the real estate sector contributes significantly to India’s economic growth, it is important to analyse how the outbreak will influence this sector. We are already seeing a slump in the hotel and hospitality sector due to the cancellation of flights and closure of borders. The retail sector too will be challenged due to sourcing disruptions. Moreover, the slowdown is already being reflected in the delayed decisions by retailers to lease spaces. While the commercial sector has been on a strong foothold, investors and businesses will adopt a wait-and-see approach that we’re witnessing in other global markets.”
Says Jaideep Dang, Managing Director-Hotels & Hospitality Group, JLL: “It will likely have an impact on the hospitality sector, especially on luxury hotels. Luxury chains have about 60-65% foreign travellers in their total guest composition and a large chunk of their business will potentially be impacted this season. Luxury hotel rates are also likely to decline in both quarter one and two as result. A full rebound may take time but we could see some recovery signs in the third quarter depending on the wider situation. Mid-scale brands on the other hand, derive more business from local tourists but even for those chains two quarters are going to be challenging as domestic travel restrictions come into force. Occupancies will be hit for sure but given the fluidity of this global situation, assessing the impact is a challenging proposition.”
