Recent hospitality industry deliberations have focused upon the lack of government support during COVID stress and how the sector has been left to fend for itself. While there is no denying that these assertions are factual and concerns on short and medium-term sustainability of the industry remain overwhelmingly uncertain, stating the obvious hardly helps the industry, in dire need of reinventing itself to stay afloat!
In a welcome change, at a webinar hosted by BW Hotelier magazine, industry leaders discussed the road ahead and how the industry could use the disruption to its advantage, creating a leaner, multiskilled workforce, redefine concepts of luxury and sustainability – that is no longer optional – and improve operational efficiencies.
Industry stalwarts attended a recently held webinar titled: “Getting Indian Hospitality Back.” The line-up included Nakul Anand, Executive Director of ITC Limited and Chairman, FAITH; K.B. Kachru, Chairman Emeritus and Principal Advisor – South Asia of Radisson Hotel Group; Patu Keswani, Chairman and Managing Director of Lemon Tree Hotels; Neeraj Govil, Senior Vice President – South Asia of Marriott International; Sunjae Sharma, Country Head and Vice President – India Operations of Hyatt Hotels & Resorts; Vikram Oberoi, CEO, The Oberoi Group; Dr Jyotsna Suri, Chairperson and Managing Director of Bharat Hotels Ltd (The Lalit); and Priya Paul, Chairperson of Apeejay Surrendra Park Hotels. The session was moderated by Vir Sanghvi, TV and print journalist. Excerpts:
Nakul Anand, Director, ITC Limited & Chairman, FAITH, envisaged the way forward for the industry, outlining numerous initiatives which were going to enable seamless hotel operations, equally safeguarding guests. He called for safe distancing and “not social distancing,” and believed high-tech service was heading towards contact-light service, stressing he was not going to call it “touchless service.” He felt check-ins and check-outs, without any human contact, were going to be the new norm. Fixtures such as plexiglass partitions, texting concierge, voice-enabled controls, digital menu, contact-light payment, among others, were going to become permanent features of the post-Covid hospitality offerings. “Tamper-proof seals, new menus embedded with health, wellness, and sustainability, along with the rise of the organic and social distancing from junk food” were going to trend in the post-Covid world.
The big-fat Indian wedding had gone on a diet and MICE had gone into a coma, said Nakul Anand. Hotels needed to re-envision buffets, he said, adding that hotels had to ensure maintaining the integrity of their brands while planning for these measures.
He believed that homes were going to become the epicentre of human lives. Therefore, more home-deliveries were likely. Room service was going to find new ways to cater to inhouse guests while concepts such as ‘grab-and-go’ and contactless ordering through QR codes, etc., were going to become mainstream, he said.
He believed that Covid was going to have a tremendous “long-term impact” on hotel buildings and how they were being designed. “We must have designs that appeal to all five senses and not just vision. Designs that can reduce the chances of transmission by using anti-microbial materials. Bacteria-resistant material and hygiene-checks have to be incorporated,” he substantiated. “Increased fresh air, anti-bacterial switches, paint, fabric, and others, would have to be looked into; designs that render themselves to cleanability,” added the hotelier. He also spoke about exploring biophilic designs that were designed to connect guests with nature to reduce stress, enhance creativity, improve well-being and expedite health.
Stressing on the connection between health and sleep, he said that the new service mantra was all about redefining hotel spaces and experiences. “We need to create experiences that induce wellbeing for guests who want a sense of freedom, with personal controls. They will fear situations that they cannot control. My new definition of service would be seldom heard, seldom seen, never touched and always well,” he elucidated. He expressed confidence in the success of touchless service as much as the success of high-touch service, saying ‘namaste’ had no element of physical contact, yet it evoked “second to none” emotions.
He believed the industry needed to coexist and adapt to the situation. He suggested that the spread of Coronavirus into villages, owing to the large-scale migration was imminent, which was going to be difficult to contain, given the lack of medical facilities, etc. The possibility of a vaccine, most realistically, was, at least, two years away, he noted.
Vir Sanghvi mentioned the steps taken by governments in the USA, the UK and France, among others, to support the industry to tide over the crisis. He argued that these steps indicated the importance accorded to the sector, in respective countries, in driving national growth and employment.
The hotel industry could have piloted the economic recovery, given its expanse and ripple effect in creating jobs, said Dr Jyotsna Suri, Chairperson & MD, Bharat Hotels Ltd (The Lalit). She suggested she had no answer to the Indian government’s treatment towards the sector. “Tourism and hospitality industries created a feel-good factor. Therefore, it was even more important to support these sectors. We are very dejected,” she said. Managing payrolls was a significant challenge as revenue streams had virtually dried up, she said. States also needed to step in and exempt hotels from paying for license fees and other such recurring expenses, especially when no revenue was being generated, she said.
She also underlined the dichotomy between social-distancing and consumer-service and said the hotel industry was people-centric. She concurred to the need to abiding by all laid-down norms on hygiene standards but called it a “tight rope” to walk on.
A massive change was going to occur as the industry navigated the choppy waters, she believed. The industry would have cleaned up itself at numerous levels, such as multiskilling, multitasking, a new definition of luxury, which was more sustainable and responsible, and it was going to emerge stronger than before, she added.
It was time for the industry to explore new opportunities and domestic tourism was the foremost, which could be tapped, said K.B. Kachru, Chairman Emeritus & Principal Advisor-South Asia, Radisson Hotel Group. A concerted effort was needed by the government at the centre and in states, to examine the contours of domestic tourism, he said, adding that domestic tourism was distinct from international tourism. He believed that a structural change was needed, and the government needed to change the status of the hospitality sector to “infrastructure” to enable the growth. He also stressed the need for creating the necessary infrastructure, such as wayside facilities, to boost travel between drivable distances. He batted for a collective effort and asked to make tourism a “national priority” to make tangible and desired changes. Civil aviation and tourism needed to work in tandem for driving the desired change, he explained.
He concurred with Patu Keswani and reposted his faith in the Indian resilience. He said that the country had weathered multiple crises and emerged stronger. While the numbers may not immediately go back up to pre-Covid levels, they could be much closer, he suggested. It was challenging, but he was trying to smile, despite the industry already losing close to ten lakh crores, he confessed. The survival of the hospitality sector was equally critical for other industries intrinsically linked to it, such as retail and real estate, among others, argued Kachru, adding that 42 million jobs were at stake. The Radisson Group was working with over 300 owners, and there were genuine concerns. Despite the adversity, the moral support, thankfully, was intact, emphasized Kachru. He commended industry associations for “coming together” and shared he had never seen such camaraderie, in his long association with the industry. Being aatmanirbhar (self-reliant) was the only way forward and cost-control measures, including a leaner workforce, was a non-negotiable to survive, he said.
Vikram Oberoi, CEO, The Oberoi Group, emphasized the distressing migrant issue and suggested the impact of the unfolding crisis, aside from the economic contours, was similar to that of the Great Depression. He called it “catastrophic.” Generating demand for the industry was the most significant challenge, he believed, adding that the government’s intervention was an intermediary measure anyway. Fact-based perspectives were needed to ensure people started to visit hotels to stay and dine, he argued. He shared that a survey conducted by Oberoi Hotels revealed as much as 40% of people preferred not to travel until a vaccine was invented. Finding an antidote to Covid, and globally administering it was a considerably time-consuming proposition. There was no option but to go on with lives and livelihoods, barring those in the high-risk categories, such as the elderly and ones with pre-existing conditions. He believed informing people about existing challenges was critical to enable them to make informed decisions, consequently driving demand.
There were some encouraging initial signs of positivity coming from China, informed Neeraj Govil, Sr. Vice President-South Asia, Marriott International. As many as 90 hotels had to be closed. The numbers were now down to single digits, he shared. He believed that car-driven travel and staycation to drivable distances, such as between Delhi and Jaipur, and Mumbai and Goa, could commence, following which essential business travel could pick up after everyday travel resumed.
Govil concurred with Vikram Oberoi’s assertion of making fact-based decisions, which implied that a vast majority of people were not at high-risk and could resume with their lives as usual, of course taking the necessary precautions. He batted for a flexible system to remove all possible impediments for the consumer to travel, including bookings and contracts. The industry was going to do everything needed to ensure a seamless operation in the new ‘normal,’ and this message needed to be amplified.
Southeast Asian countries had drawn from their past experiences of pandemics and were able to chart a more agile response to dealing with the COVID-19, he said. After mostly containing the spread of the virus, Australia and New Zealand had resumed bilateral air travel, maintaining a bubble to safeguard people and continue with the business, he said, suggesting that the arrangement was likely to be replicated elsewhere, including in Asia.
While enough emphasis was being given to the expectations from the government, the tables were going to turn soon, and much was going to be expected from hotels, said Sunjae Sharma, Country Head & Vice President-India Operations, Hyatt Hotels Corporation. The industry needed to have answers to the expectations from the customers, associates and owners, he reflected. The industry needed to envision the road ahead, initially, with care, then confidence and eventually building trust, Sunjae said. It was critical to leverage and monitor data to make the most of domestic travel, as and when it started to happen, he added. Operators – both domestic and international – needed to be flexible in their approach while dealing with consumers and provide experiences to them when travelling in the new ‘normal.’ “The entire gamut of the experience, from the telephone call to enquire about the booking, to the drop back to the airport, needs to be redefined and re-envisaged,” he elaborated. He encouraged the industry to combine its synergies and promote India in its entirety, as all stakeholders were in the same proverbial boat.
The disruption was an opportunity to redefine ratios and optimum staffing levels, said Patu Keswani, Chairman & MD, Lemon Tree Hotels. He shared his hotels in Bengaluru and Hyderabad were catering to 90 per cent occupancies with 40 per cent of the sanctioned staff strength.
The mortality was low but people, unfortunately, assumed it to be very high, he said, adding that he believed that the fear of death was going to completely negate any possibility of travel in the next 6-12 months. “There will be the utter destruction of demand, at least, in this calendar year,” he said. His hotel company had decided not to lay-off any associates, also taking massive salary cuts at leadership levels to ensure there were no lay-offs, he said. He also noted that the company was going to make timely payments to its MSME vendors.
Patu Keswani suggested that domestic travel could pick up in a year, cautioning, however, that poor financial status of airlines and social-distancing measures could significantly increase air travel costs. He believed it was going to impact travel, perhaps non-discretionary, eventually affecting occupancies. The lack of liquidity was going to force hotels to cease operations, causing a long-term supply-side disruption.
Taking a more longer-term, three-year, perspective, he contradicted everyone, insisting that the world was going to go back to normal, once a vast majority of the global populace was vaccinated. A broader contraction of supply across India was a more significant concern to him, he confessed, saying that cash-strapped micro and MSME businesses were highly likely to fold up, leading to large-scale unemployment and social unrest. The Indian economy was expected to contract for, at least, 4-5 years if vital cogs of the supply chain were disrupted, he said.
Given the low-term, high-rate loan, high-fixed costs, and volatile demand cycles, no one in their right mind was going to venture into the business of hospitality, he quipped. He said one had to be either be mad or really passionate to undertake the business of hospitality, and hoteliers were a combination of both these traits.
Priya Paul, Chairperson, Apeejay Surrendra Park Hotels, shared how her hotels had incorporated technology to provide immersive food and entertainment experiences to its guests. She said that home delivery of food was a genuine opportunity but conceded that five-star hotels were yet not geared towards the requisite scalability to make a full-fledged venture into the home delivery domain. She said that there were ample reasons to tap into the market, given the spare capacities available with hotels’ kitchens.
She extended Nakul Anand’s argument of wellness and sustainability to the food segment. She elaborated that the source and quality of the ingredients, how they had been handled and whether they were organic, needed to be answered. “There are many organic suppliers, but how do they scale to supply to hotels needs to be looked into,” she said. Concepts such as veganism, vegetarian food, hygiene and safety, among others, were going to gain more traction, she said.
She wondered whether buffets were going to make a comeback and how a hotel could service 200 rooms efficiently. “We will have to find ways to respond to many of these scenarios when they come up,” she thought.
We have heard of the challenges, and now, perhaps for the first time, we are hearing of possible innovations, interventions, the choice of running smart, lean, and with a new focus on where to be profitable? The emphasis is on staying afloat, looking for new opportunities; the story is not over! Doomsday opinions are now being pushed aside into the shade. The Covid-19 pandemic has surely unleashed an unprecedented churn across industries, and the hospitality industry is no exception. Cash-strapped, its priorities are well-placed, that it must first survive and then examine the long-term course. Of course, government interventions would have helped and the industry continues its waiting game. Meanwhile, industry deliberations have hit the right notes in setting the new agenda, but this is the first step in what looks like a long and bloody battle, where the new norms will slowly find their new meaning! As things stand, some light is emerging out of the long tunnel ahead.