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Relatively low leverage a silver lining for some luxury hotel firms

India covid-19 pandemic travelers
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Covid-19 has served a big blow to India’s luxury hotel sector, just after it showed signs of an improvement in occupancy rates and room tariffs in January.

The big challenge for the capital-intensive sector is to manage heavy debt and interest costs, given that revenue and cash flows for several quarters will be weak.

Sector analysts had already factored in a demand drop, with the virus outbreak in January. But prolonged travel restrictions across the globe and the 21-day national lockdown have jeopardized the solvency of hotels.

A report by Edelweiss Securities Ltd stated: “While interest payments will have to be met, on the principal (loan) amount, refinancing from existing or new banks remains an option.

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COVID-19
United States
United States
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India
India
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Brazil
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Deaths: 141 607
Recovered: 0
Russia
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Deaths: 237 619
Recovered: 0
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