It has been a difficult time for most industries since the outbreak of the pandemic. Businesses across various sectors have been struggling to survive and the second wave only added to its woes. both economically as well as emotionally for workers and owners. The hospitality industry in particular has been hit hardest hit by the pandemic. However, it has learnt some valuable lessons and is transforming itself to survive. Now that everyone is fearful of the advent of an inevitable third wave, is the hospitality industry ready for it?
What is foreseen for Different Categories of Hotels?
According to Statista, the market size of the resort and hotel sector worldwide reached 1.21 trillion USD in 2019 which is significantly high. The hotel industry is majorly divided into two types of hotels – business hotels and leisure hotels. While business hotels share majority of supply (60% – 70%), the remaining supply is shared by leisure hotels.
Leisure hotels saw a huge resurgence after first wave, and will probably see resurgence after second wave. The sector (led by the leisure segment) was witnessing a revival of sorts before the second wave of the pandemic hit it severely. According to global real estate service firm JLL, India’s hospitality industry had witnessed a fall of 38.7% in Revenue Per Available Room (RevPAR) during January-March 2021 as compared to Q1 2020, primarily driven by Leisure hotels. Therefore, leisure hotels will be able to manage third wave better, because not only have they experienced a rebound, they have more preparedness and confidence.
However, business hotels, which saw only limited resurgence after the first wave, are still struggling after the second wave. It is expected that many business hotels around city centres may permanently shut down, as available supply will reduce.
Comeback of Hospitality Industry
Many of the hospitality chains are going all out to survive in the present situation while trying to keep costs under control. Given the situation, both the segments will need to re-emerge with a renewed or revised plan. The hotels will need to view the situation from a larger microscope i.e. to explore how best they can sustain their businesses. Following are some important aspects that hotels need to focus on:
Efficiency, Technology, & Automation
Technology will play a key role in the comeback or recovery of the hospitality industry. Hotels of both segments will need to adopt new-age technologies and automate various operations to bring efficiency as well as ensure safety of guests. Hotels will need to focus on technology, automation and efficiency as core USPs while running their hotels, selling their hotels, and providing safe & reliable guest satisfaction.
From taking a reservation, checking in a guest, providing in-house services to the guest, and post checkout services, all such tasks will see a greater advent of AI, AR, VR and device based automation, that will ensure hotels stay efficient, and customers stay safe.
Tracking manpower performance in different and multi-skilling of existing staff will be critical points in the recovery process of hotels. The motive is to reduce staff to room ratios to ensure profitability, efficiency and cost savings.
Marketing / Sales Using Online Channels with Dynamism & AI
More hotels will start using cloud-based integrated Property Management Systems and dynamic pricing algorithms to maximize revenues. Online distribution, pricing management, and reservation management will all be brought under one umbrella. This will not only reduce the need for day to day management but will also result in maximizing revenues due to use of AI & Data Analytics.
The hospitality industry is undoubtedly adversely affected by the pandemic, and a lot needs to change before the industry can find its feet again. Currently, business planning and strategising is in a volatile state as no one can predict what could happen next. Even the government has ignored the hospitality industry, even though it’s a huge source of employment and has a multiplier effect on the economy. The third wave can potentially be a final nail in the coffin for business hotels, where the last hope for survival will give way to complete restructuring.
– Siddharth Goenka, CEO & Founder, Aiosell Technologies