West Asia war hits hotel occupancy in GCC hubs of Bengaluru, Hyderabad

The ongoing war in West Asia has hit hotel occupancy levels in Global Capability Centre (GCC) cities like Bengaluru and Hyderabad, as most foreign travellers visiting India fly out of aviation hubs such as Dubai, Abu Dhabi and Doha.

“The hotel business has been affected by the West Asia war. Foreign tourist arrivals have impacted, which has in turn impacted occupancy in big boxes in big cities,” said Shwetank Singh, Managing Director and Chief Executive Officer of Chalet Hotels.

“The number of people who fly via the Middle East is very high. If I look at our portfolio, 40% business comes from foreign tourist arrivals. And big boxes in big cities comprise about 60% of our portfolio. There is clearly an impact,” said Singh. “These travelers spend more within the hotel and stay longer. They travel with an entourage.”

“While leisure resort business continues to do well, on an overall basis, we have lost more than we have gained. Occupancy has gone down by 10% in March. Bengaluru and Hyderabad are very deeply impacted because of GCC-led travel,” explained Singh.

Chalet Hotels expects double-digit growth in FY27 if things become normal.

Rikant Pittie, CEO and Co-Founder of EaseMyTrip, said there has been a more cautious approach from international travellers, with booking windows shortening and preferences shifting towards flexible plans, but the underlying demand for premium hospitality experiences continues to hold steady with some degree of impact due to the geopolitical situation.

“We are seeing a degree of recalibration rather than a sharp decline in luxury hotel bookings across metro cities in March. While certain segments of international travel have been impacted due to geopolitical developments in West Asia, overall demand has remained relatively stable, supported by domestic travellers and business travel,” he added.

Sky-high airfares are also impacting demand. “Airfares have seen an upward movement following the rise in fuel surcharges and operating costs. Domestic routes have recorded an increase in the range of around 5–10%, while short-haul international routes have seen a rise of approximately 20–30%,” said Pittie.