The easing of restrictions on travel and hospitality has led to the services sector witnessing significant growth in August and the trend is expected to continue.

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According to IHS Markit, its August Purchasing Managers' Index (PMI) for the sector expanded for the first time in four months. Demand conditions have improved and new orders are expanding at the fastest pace in eight and a half years, the survey found. The picture is looking up on the retail side as well.

The retailers association has estimated that of the five million jobs lost last year, three million have returned. However, the sector is still not at pre-COVID levels.

For hotels, especially luxury hotels, occupancy rates have risen and room rates are back at 2019 levels. Hotels are also reporting a longer duration of stay as travellers combine business and holidays. Other economic indicators are also reflecting a bounce back.

According to HPCL, petrol demand is up 4 percent month-on-month while aviation fuel demand jumped 8 percent during the period.

That is also corroborated by aviation data from the Directorate General of Civil Aviation (DGCA) that shows a 34 percent increase in passenger traffic in August compared to the previous month.

In an interview with Shereen Bhan, Puneet Chhatwal MD & CEO of IHCL, President of Hotel Association of India said, "The trend in hotels sector is quite positive, we are moving in the right direction. Leisure is at all-time high, one can say that it is higher than the pre-COVID level. When it comes to business and corporate travel, we have some way to go but generally the trend is positive and I would say after 5 quarters of very difficult growth, this quarter is witnessing some greenshoots."

Kumar Rajagopalan, CEO of Retailers Association of India said, also pointed to a much better mood in the retail sector. He said the sector has done about 88 percent of pre-COVID levels in the last month and is seeing continuous improvement.

“The general positivity of customers is also in a much better sense because, in retail, it is the positive feeling that really matters. Vaccination is another thing that is really keeping this country going. Some of the spectacular one-day vaccination records are helping us in going in the right direction. However, retailers are cautiously optimistic because it is not as if people have started going to office full-fledged, it is not as if the garments that would go along with business wear are really being sold. So there are categories that are still not doing so well - garment sector, jewellery sector, footwear etc are yet to do better," he explained.

Himank Tripathi of EaseMyTrip, on the other hand, said people are ready to go out. “In advance bookings till August 15 we had already seen a jump of 400 percent when it comes to the Diwali period compared to last year. So that is the kind of growth we have seen in the market," he said.

Anurag Katriar, Founder of Indigo Hospitality Trustee, NRAI said consumption is picking up in most parts of the country. In fact, now the restrictions on operating hours are also being relaxed quite significantly, which helps the whole process of consumption, he said. “However, capacity utilisation is still at 50 percent but overall the business sentiments are definitely much more improved," he added.

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