How may Omicron affect the recovery of the hospitality sector?

India’s Omicron case tally reached 578 on Monday, although no death has been reported so far. And the active cases stood at 75,841. The trend is similar, and the period too. The end of 2020 was also marked under the shadow of Covid-19, which took a deadly turn by March-April, claiming lakhs of lives.   

So, as the world is venturing into another unknown territory, nations are taking steps to avert what is known to all now -- the havoc that the pandemic can cause. The WHO chief Tedros Adhanom Ghebreyesus has summed it well: ‘An event cancelled is better than a life cancelled.’

But amid all this, businesses and the livelihood of crores of people are also being affected. The Federation of Hotel & Restaurant Associations of India (FHRAI) estimates that over 20-30% of establishments in the organised sector comprising around 60,000 hotels and 5 lakh restaurants have already shut shop since the outbreak of the pandemic.

On Monday, the Centre issued another set of advisory to all the states and UTs, saying that they may consider imposing need based, local curbs and restrictions, to control the crowd during the festive season.

Several states including Delhi, UP and Maharashtra have already imposed night curfew. Mumbai civic authorities have banned New Year celebrations in closed or open spaces. Starting January 1, Haryana is banning access to public places for both the unvaccinated and single-dose vaccinated. 

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While dozens of countries have started giving booster shots, India will start administering them as a precautionary measure to healthcare and frontline workers from January 10.

It all has come at a time when the hospitality sector was steadily inching towards some normalcy. The earnings in the New Year would have given the sector a much-needed breather.

Hotels have been seeing above normal bookings over the past few months as revenge travel after the second wave unleashed the pent-up demand. 

But they now stare at cancellations due to increased restrictions. The government has also extended the suspension of scheduled international passenger flights till January 31.

Contact intensive sectors like hospitality and tourism are always the first victims of a lockdown. India’s domestic tourism saw a healthy uptick after August. Airports were choked and restaurants in tourist places were seeing a full house. December is the busiest period for hotels with Christmas, New Year and the wedding season all coming together.

So far, hotels have not seen large-scale cancellations as the number of active cases is low. But a further rise may lead to another round of lockdowns.  

In all of this, there could be a silver lining. A third dose of the Covishield vaccine significantly boosts antibody levels against the Omicron variant, its inventors AstraZeneca and Oxford University have said.  Covishield accounts for 90% of the vaccine doses administered in India. While there are doubts on the effectiveness of booster doses, opting for a lockdown instead will not only stop the economic recovery but push more small businesses towards closure.

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