Hitting the reset button

Bjorn De Niese, Director, Mayfair Spa Resort & Casino and Director, RightClique Hospitality believes it’s time to look past F&B and selling rooms to make revenue during the lockdown period.

HT Bureau

How are you dealing with the ongoing crisis? What kind of industry damage are you calculating?

Currently it’s a lot of e-learning, research and rest that’s helping me through the ongoing crisis. I have been spending several hours a week on looking at alternate revenue streams and its viability that could supplement earnings for hospitality establishments in the days to come. The times when we focused on just accommodation and food & beverage sales for a hotel will need to change and look at all the ancillaries that could be amplified to ensure a hotel is able to earn some revenues even in a lockdown like situation. The hotel industry has taken and will continue to take a beating for a while in my opinion. The branded and organized hotels clock annual earnings of around `38,000 crore (approximately USD 5 billion) and the unorganised hotels will account for nothing less than another `40,000 crore. We could expect damages at around 60 per cent on the annual industry earnings.

Do you think, domestic travel will drive demand for the next few years? Are hotels prepared for this?

For India, fortunately, the domestic and regional traveler has helped the industry tide over tough times in the past. Once again, we find ourselves looking at this segment to keep the industry afloat. However, the impact of market closure across industries, job losses and the cash crunch many are faced with would have an impact on the travel plans of even this segment. With international source markets even worse off than India right now, many hotels will be forced to adapt to this. Hotels in India have been seeing a lot more domestic business in the recent years and have been welcoming this segment with open arms for a while now.

Human touch, that has remained the core of Indian hospitality, do you see that wearing off post COVID -19?

The trademark of Indian hospitality has always been its warmth. While you will have some restraint for a while, it will stay. Mandatory procedures such as temperature checks, more emphasis on cleaning and sanitization will certainly improve overall standards for hospitality establishments across hotels, restaurants, spas, offices, etc. However, Indian hospitality was always felt in the warmth of our ‘Namaskar’, the tone in which we speak and the genuine smile that, if covered by a face mask, will be visible in our eyes when we interact with guests.

How will functioning of the hotels change post this crisis?

The short-term changes would involve rationalisation of manpower, relooking at marketing spends for the year, multi skilling staff and interim changes in policies and procedures. Long-term, SOPs for hotels will also undergo significant changes. However, this also represents an opportunity for the industry to take a significant leap in terms of technology for guest services.

There have been speculations about industry being thrown 10 years back in time. Do you agree with this? If yes, how long will it take for the industry to recuperate?

The situation we are in presently is peculiar because its impact has been significantly felt globally. It has forced the world to hit the reset button. But things aren’t that easy. Close to 5 crore jobs currently hang in the balance and FAITH (Federation of Associations in Indian Tourism & Hospitality) has already predicted a job loss of 3.5 crore. Each day the situation prevails means bleaker chances of jobs being held on to. However, 10 years later, we are also in a position to adapt and manoeuvre better than we were at the time. Revenue management, staff output optimisation & prudent purchase procedures will be vital in surviving these trying times. I think the industry will see some movement after another two quarters but if we’re talking normalcy, optimistically, it will not be anything less than a year.

Travel Sentiment Survey in the times of COVI D-19

To get a pulse of the current sentiment with a cross section of society, RightClique Hospitality conducted a survey, with over 80% of the respondents being in the 25-44 age group. DeNiese lists some revelations the survey brought about.

  • It was found that 86% of the respondents would wear a face mask in future to travel
  • Just 23% felt they would continue with their existing hotel choices
  • 46% said it was okay to dine out with social distancing in place, while 31% will stick to home food for now 42% said it would take a year at least to recover from the crisis; 42.3% expected recovery to happen in two quarters. An optimistic 11.4% expected it as fast as it slowed down

“Branded, organised & unorganised hotels clock annual earnings of around ` 78,000 cr. We could expect damages at around 60% on the annual industry earnings”