With the resumption of operations of the hospitality industry, there is a need to adapt, tweak and implement innovative ideas to help the industry accelerate recovery and get ready for the hospitality of tomorrow.
The Indian hospitality industry, over the last couple of years, has witnessed a healthy increase in the overall performance after a period of stagnancy. Demand outpaced supply in various major cities across India and further there were significant development taking place in the Tier II and III cities. Everything came to a standstill with the Covid-19 pandemic. The lockdown regulations have pushed the industry to almost a total shutdown. Hotels were shut down and further developments were put on halt. The industry is struggling with depleting cash reserves and flow.
What are the emerging trends in the sector today? How are hotels getting ready to meet customer’s expectation in order to get their confidence back? How are hotels adapting their business operations under the ‘New Normal’ but still remaining sustainable? How technology is supporting to achieve this? What will be the pace of development? Will covid-19 influence in changing specific structure or design of hotels?
In order to get the answers of the above-mentioned questions, T3 organised an e-conference during SATTE GenX titled, ‘Hospitality: The Future of Hotel Industry’. Moderated by Harmeet Singh Bedi, Senior Director - Hotels & Hospitality Group, JLL India, session witnessed eminent speakers from across the hospitality industry including; MP Bezbaruah, Secretary General, Hotel Association of India; Abinash Manghani, CEO, WelcomHeritage; Satyen Jain, CEO, Pride Group of Hotels; Suhail Kannampilly, CEO, The Fern Hotels & Resorts and Rajneesh Malhotra, Vice President Operations & Asset Management, Chalet Hotels speaking their minds on the ongoing issues.
Today, the hotel industry is reinventing itself and are introducing various strategies to attract travellers. The utmost focus of each hotel is to maintain safety and hygiene
Speaking about the trends which have evolved during the post lockdown phase, Manghani said, “Safety is the priority today. We have seen a lot of interest in leisure in the last couple of months and these travellers are concerned about safety and the distance of travel. Our properties near large cities are showing huge demand. We are seeing a distinct trend of working executive working from healthy destinations. A lot of people are today given the option to work from distant locations and people are staying for three to four weeks in hotels and homestays. The top five-star city properties are focusing and investing into f&b delivery and take away options.”
In terms of markets, pure leisure destination is witnessing the major traction and as expected the city hotels are the ones which will be the last ones to pick up. “we opened up most of our hotels as soon as we got the opportunity from the Government. Currently we haven’t opened six of our hotels. Leisure demand has been quite encouraging, and demand in pure leisure destination is better than expected. Some of the destinations are clogging revenue as equal to pre-covid times. The leisure properties reliant on conferencing are at about 50-60 per cent of the pre-covid times. Business hotels in the bigger cities are struggling and are not able to cross the barriers. But, business cities in Tier II & III that are focused more on manufacturing, oil and gas, those hotels are doing numbers very close to pre-covid levels. Effectively the entire occupancy at the chain level in down, chain level we are witnessing a growth of six to seven per cent Month-on-Month in terms of occupancy. With the current trends continuing, we should reach pre-covid levels in April next year,” Kannampilly opined.
Various hotel chains have used their inventory as quarantine facilities, which has helped in generating a chunk of the revenue during the lockdown period. Also, hotels are introducing more technology to make the routine processes contactless. “Most of our metro hotels we were catering to the quarantine business for people coming back. We had put a very elaborate SOP system to maintain the hygiene. Our coffee shops have now opened up. Customer used places are frequently sanitized and we are strict about our mask policy. We have started digital check-in and checkout and payments have all gone digital. The contact points have been reduced as much as possible. In banquets we have social distancing SOPs in place, and we are strictly maintaining all protocols,” Jain stated.
One of the major challenges which the hospitality industry is facing is that the operational costs have gone up due to the new protocols and SOPs in place.
Speaking about the solution and also the introduction of technology, Malhotra said, “The prime concern on everyone’s mind is hygiene and safety. Chalet Hotels is tied up with Marriott and Accor, which are two global brands. Both the chains have very extensive and elaborate SOP and protocol system in place. All the protocols come at an expense which was never factored in any of our budgets, however these are so important that none of us even thought about the cost. But now as hotels and restaurants have opened up, there is a significant amount of investment that has gone in ensuring that all these protocols are in place. Hotel industry was the first ones to adapt to the new normal very quickly. As an industry hotel industry is very creative and quickly adapts new technologies and process from other industries. We do come up with solutions very quickly. Technology has been a part of the hotel industry for the past few years.”
Tourism and hospitality industry as a whole have been one of the most neglected segments for the Government. This sector has not been able to get any major relief which was expected, despite being the worst hit segment. The industry has got green signal from the government to restart operations, but the small and medium players in the industry require working capital to restart businesses. “In terms of hospitality sector there is a wrong perception in the Government that it does not require any support even in the times of crisis. Hotel industry is a very composite sector, it has small and medium enterprises who are struggling for survival. Everyone speaks about developing the tourism sector, but when it comes to such a situation there is no core focus at all. There is no one ministry which can take care of this segment. The problems of the hospitality industry cannot be solved by the Tourism Ministry,” Bezbaruah said.
He further added, “In terms of liquidity, it is the Finance Ministry and the RBI which could have helped. We as an association did represent to the RBI with a whitepaper. We highlighted that we need working capital for the industry to restart and we need some relief for the industry which has come to a complete standstill. We asked for a special attention in the Kamat Committee, we made specific requests, but nothing has been considered. We have started a campaign, but we have realized that public representatives are very important, so we have approached various key decision makers to hear our voice.”