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Hotel industry back on track sooner than expected

The hospitality industry globally has witnessed a major setback with the pandemic hitting the tourism, hospitality and the corporate business. Hotels across started looking at alternative stream of revenue to negate this impact. Pre-pandemic F&B was the secondary income for the industry, most of the hotels which vouched on their experiences were never interested in the food delivery business. Today, food delivery has become a crucial part of the business for even top international chains. Newly introduced staycations, work from hotel, quarantine facilitation, etc. have to an extent helped the industry to generate revenue.

T3 organised an e-conference at SATTE GenX titled, ‘The post-pandemic Hospitality model’. Moderated by Romil Pant, SVP- Leisure Business, Thomas Cook India; the panel witnessed a lineup of eminent industry experts including Shruti Shibulal, Director & CEO, Tamara Leisure Experiences; Sonavi Kaicker, CEO, Neemrana Hotels; Gurbaxish Singh Kohli, Vice President, FHRAI; Parveen Chander, Senior Vice President – Sales and Marketing, The Indian Hotels Company; Kush Kapoor, CEO, Roseate Hotels & Resorts and Samir MC, Managing Director, Fortune Park Hotels

Sharing his views about the industry from an association perspective, Kohli said, “We have seen more lately that the industry has started taking baby steps. Business model innovation will be one solution to overcome this crisis. We have seen hotels are coming up with a lot of innovations. The involvement of the domestic market is very important for revival. The nature of our products is that it prevents us from a compensation. We deal with the most perishable commodities. A meal not being served, or a room not being served during lockdown, cannot be sold twice later. With a lot of new rules and regulations, the hospitality sector will change totally. This crisis has affected well established firms and we all have to think a lot and strategise for our revenue streams. “It’s a catch 22 situation between volume, quality, and viability. Leisure destinations and drivable destinations have witnessed good ARRs. The important role of the regular guests is weighing our efforts. We need to learn to live with the pandemic as the globe is taking this approach.”

With the domestic tourism significantly picking up, hotels and resorts across the nation have witnessed growth post the second wave.

Speaking about the development, Shibulal said, “The last 18 months has been extremely volatile for the industry. We operate three business brands, one is luxury resort, upscale business hotel, and midscale segment hotels, every segment had different sets of challenges. Post second wave, we have seen an enormous kickback in the leisure segment and revenge travel is alive and it’s heartening to see that the domestic market is able to support the brands so well. We have started exploring new segments of business and it has proved to be quite positive.  Overall, the exercise we did during the pandemic, look at our cost much carefully, investing in technology, etc. all of that are paying now for us. If we see another six months of smooth sailing, then the future of the industry is bright.”

Resorts and leisure properties have reinvented themselves and have introduced more experiences for their inhouse guests. This has been extremely favourable for the growth of the staycation segment.

Kaicker, added, “We as a group specialize in generating local employment and we focus on revitalizing dilapidated ruins. We had to utilize outdoor areas and create more activities for our inhouse guests. With a huge trend of staycations, we have added a lot more activities for children. We have overcome the worse already and Indian hoteliers have shown their resilience. The figures in the last three months have been phenomenal and we have witnessed better room rates and occupancies compared to 2019. We are now looking forward to the wedding season. The scale of the weddings is smaller and more intimate.”

Majority of the hotel chains are now witnessing better room rates and occupancies in certain months compared to the pre-pandemic times. F&B and MICE will be the last segments to recover from the impact of pandemic.

Sharing his views on the revival of the hospitality industry, Chander, said, “The last 18 months have taught us ‘Stragility’, which is how quickly you can implement your strategy. We have invested in technology and introduced digitization, which is the silver lining in the dark clouds. In last 6-8 months, leisure has been doing extremely well because of the domestic demand. In some months, we have witnessed better demand than 2019-20. Some properties are doing better rates and occupancies now than pre-pandemic. For the corporate segment, we have seen a new segment emerging where a lot of staycations and workations are happening in the cities. We are almost out on the recovery for the rooms segment, we are nearly touching two third of the revenue we wanted in the rooms, challenge is more from F&b, and catering and MICE will take much longer to recover. International travellers are at least not coming for a year, so high end palaces and hotels will have to wait for recovery.”

The 18 months have helped the hospitality players to think differently. One of the major positives for the industry has been the loyalty factor amongst guests which have further strengthened. Samir, said, “It’s been a year plus of learning for the hospitality industry. The importance of trust came up very prominently, guests came back to hotel where they trusted from a safety and hygiene perspective. Agility has been the key; we have all tried a lot of new things to overcome challenges. We see the leisure locations has a lot of demand and traction from the domestic business.  What we don’t see is the corporate travel coming back in the large cities, this will take a little more time.”

Hotels are also looking at various other streams of revenue to sail through the pandemic. Hotels have partnered with the government to offer quarantine facilities for international guests have not witnessed major loss of revenue.

Speaking about the various alternative stream of revenue, Kapoor, added, “We were very positive during the pandemic as both our properties in New Delhi were a part of the quarantine hotels, so we were able to manage our costs, so we never went into losses. All our six properties from the month of June are into positive GOP. We see a very positive future with the upcoming season already being booked from now. Our Rishikesh property is booming and are doing good ADRs. We have learnt flexibility and innovation from the pandemic. We have opened up our own cafes, we have come up with India’s largest Ice Skate rink which will be introduced in October in Gurgaon. These are some additional sources of revenue for us.”

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