The curtailment of IndiGo's flight operations by 10% will hurt the hospitality business in tourism-heavy regions in 2026, unless it is met by other airlines, according to Royal Orchid Hotels' Chief Financial Officer (CFO) Amit Jaiswal.
“The reduction of 10% of the capacity of IndiGo will definitely hit to some extent, especially the tourism-heavy regions in 2026. Unless they are taken over by the other airlines. Leisure destinations will definitely get hit if there are a lot of flight cancellations,” the top executive told NDTV Profit.
The Civil Aviation Ministry has instructed IndiGo to slash its winter capacity by 10%, cutting daily departures from 2,145 flights to about 1,930 amid the ongoing crisis.
He noted that the short-term impact of the IndiGo flight disruptions has been positive for some hotels as stranded passengers required accommodation.
“The short-term chaos, which was created in the first week of December till I think Dec. 8, also provided a fillip to the hotels, some of the hotels via stranded guest stays,” he said.
However, in the long run, if IndiGo's capacity curtailment is not taken over by other airlines, it will hit occupancy levels for hotels, according to Jaiswal.
“I feel that the hotels will not be affected that much, especially in the tier-1 cities. But in tier-2 and tier-3 cities, which are in the arena of tourism, the business may get affected, and I am evaluating an effect of 3 to 4% on the occupancies. Unless the load which is being depleted from the Indigo airlines is taken over,” the CFO said.
He underlined that this crisis showed the need for diversified travel options in India's hospitality sector.
“This underscores the need for diversified travel options in India's hospitality sector. A lot of roads have been created. So, there are options for people to travel as far as leisure travels are concerned. Nowadays, you can avoid the flights and go by road also. And it takes equally the same, almost the same time.”
Shares of Royal Orchid Hotels closed 1.55% lower at Rs 382 apiece on the NSE on Wednesday, compared to the benchmark Nifty50 settling 0.32% at 25,758.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
