During the COVID-19 pandemic, the one industry that has suffered the most is the hospitality sector. While hotels are trying various different things, from food deliveries to discounted tariff and lenient cancellation policies – most luxury hotels are still in the red.
The Hotel Association of India, which represents 300 hotels in India, has been campaigning for help from the government, consumers and other partners. They recently tied up with Naukri.com to help retrenched employees find jobs in other fields.
Hotel Association of India’s Secretary General, Madan Prasad Bezbaruah explains the various challenges plaguing the Indian hospitality industry and appeals the government for immediate action and reforms.
What interventions/help does HAI expect from the government right now and why?
There are four key factors that are working in tandem against the hotel sector today:
- Hotel demand has been extinguished as it is highly This has been exacerbated by the absence of air travel, corporate restrictions, cancellation of holidays, state lock-downs and the imposition of quarantine on travellers.
- 70% of the hotel’s costs are fixed in nature, mostly towards payroll expenses and Government
- Hotels are capital intensive with along gestation, whereas debt offered is typically short-term and high cost rendering the sector highly sensitive to demand
- The negative outlook on the industry has made it unattractive for lenders leading to a liquidity crunch and increased rates of interest to cover for the perceived
Broadly, we appeal to the government to consider the points below:-
- Waiver of Charges: Waiver of all statutory dues and fixed charges for the period of lockdown
- Deferment for twelve months of all statutory dues including property tax and municipal taxes
- Licenses and permits: A blanket exemption for 12 months is required and auto-renewal of licenses for the next (List of licenses attached in annexure)
- Excise license: complete Waiver of excise fees for the fiscal year 2020/21, and fees that have already been paid may be adjusted for the fiscal period 2021/22
- Electricity: reduction in electricity Also, the state could remove minimum electricity charges based on the connected load
- State GST: reduction in state GST rates for the year 2020/21 and 2021/22. This could give a boost to tourism
We have brought to the notice of government the plethora of licenses and compliances related to the industry requesting that these should be rationalised.
Now that the lockdown has been eased, has the hospitality business picked up?
It is yet too early to say anything definite. Moreover, easing of lockdown has not been uniform and people still have some confusion about travel and quarantine requirements in different places.
We have received mixed reactions from the people post the ease of lockdown. However, our assessment is that people are feeling the impact of staying at home and are keen to go on vacation. We expect bookings to pick up soon.
What are the losses in terms of revenue and jobs that India’s luxury hotel sector stands at currently?
The early report by McKinsey and the latest survey by RBI, reports from UNWTO and others show that the hospitality sector is amongst the worst hit by the pandemic due to the decrease in demand as a result of travel and hotel re-opening restrictions. The industry had made rough estimate of the loss to the tune of ₹90,000 crore in 2020. As per a report by KPMG, the Indian Tourism and Hospitality industry is starting at a potential job loss of around 38 million, which is 70 percent of the total workforce. We are also currently staring at a potential revenue loss of $10 billion for which we are seeking the government’s intervention. It is to be appreciated that these estimates are tentative and indicative.
What can hotels do to attract more customers?
Demand for hotel rooms will depend on economic recovery, business travel, ease of travel, how tourism picks up, etc. Most importantly, it will depend on public confidence about health safety. Hotels can adopt innovative practices for safety, can apprise the people through their website, etc. about all the measures taken by them, devise some incentive schemes and publicise these.
By when do you think will hotels be able to recover losses and get back to business as usual?
Even if 50 per cent normalcy is restored and hotels are allowed to operate across the country without any major restrictions, I think the sector will be able to bounce back to a great extent.
Which luxury hotels are doing a commendable job of surviving and sustaining.
There have been many innovations adopted by our member hotels to provide a safe and feasible experience to its patrons. These include regular sanitization of common areas, kitchens, restaurants as well as rooms.
Apart from these, special care is being taken to provide medical help to people by deploying medical staff that can help traveller get the right medical assistance in case of a casualty.
Instead of thinking too much about how the post-pandemic world will unfold, the luxury hotels of India have been keeping themselves busy and relevant by innovating. From offering recipes and culinary tips on their social media handles to home delivering food from their specialty restaurants, hotels are adopting advanced technology and evolving contact free/minimum contact delivery of services.
The Taj group has launched its app ‘Qmin’ that allows guests to experience Taj@home. The gourmet food delivery service is available in six cities offers signature dishes from 43 specialty restaurants from 20 Taj hotels.
ITC has partnered with Swiggy to list and deliver a curated set of dishes from across its properties to reach India’s diners at a time when restaurants remain shut for dine-in.
Brands are offering staycations as people are looking at getting out of the house to meet family and friends but don’t want to fly or go to mass destinations and also want to be close to home. Focus is on “experiences” and hotels are changing their image from being home to restaurants and spas to being centres of experiences-both indoors and outdoors. A lenient no cancellation fee policy has been put in place by most brands to offer flexibity and peace of mind to those booking vacations during these times.”
Many hotels are letting guests view live cooking of meals so that guests can see their food being prepared.
Many hotel chains are also in the process of deploying digital technologies, which will enable increased use of interactive smart tables that will let guests punch in their dining requirements, change table-top food presentations, and pay bills. AI-enabled technology will also give access to guest history to facilitate personalized service.
Robotics too will help achieve a higher level of hygienic service. Technology savvy hotel chains /hotels are already in the process of automating standardized food production assembly lines on the lines of flight catering to promote reduced physical contact.
What advice would you like to give new and young hoteliers?
Hygiene, health, safety, special attention to customers’ needs should be the future norm and not just a survival initiative.
In future, survival will largely depend on the use of innovative practices, Information Technology, Artificial Intelligence, Virtual Reality in everyday operations. But at the end of the day, it will be the human touch that will make the difference–not machines. In the new world of ‘experience economy,’ every customer will be a market, service will be the cutting edge and our manpower will have to be multi-skilled and motivated to accept this challenge.
Pay now, stay later. Luxury hotels across India are luring customers with attractive packages