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February 18, 2021

Impact of Covid-29 on the Hotel Industry in India

The hospitality sector has been one of the industries hardest hit by the Covid-19 pandemic and although restrictions have been easing, things are nothing like they were at the start of this year – and perhaps they never will be again. In India, a country where lockdown was lifted after a short time due to the sheer volume of people needing to work, the industry has been especially hard hit.

 While the pandemic has brought the hospitality industry to a stop, the continuous efforts of the entire industry to bring in technological innovations and new safety protocols will ensure the industry bounces back with stronger momentum leading out of the crisis. 

While there are big challenges facing the industry today, leading companies with sound business models will do extremely well coming out of the crisis, and have great opportunities ahead for them.

The number one consideration post Covid-19 will be on health and safety which translates into hygiene and sanitation issues of the hotel. The key is to provide physical evidence of the hotel’s concern for health and safety. 

  • The checks and screening will have to be erected for health purposes. The security will check for fever with a remote thermometer, shower a light sanitizer mist, keep hand sanitizers at the reception, elevator lobbies and guest rooms. Ensure the circulation of fresh air in guest rooms and display indoor air quality. The guest room will have a sign mentioning “This room has been sanitized for your health and safety”.
  • Hotels must plan now to do a soft-opening with one floor or two with only essential facilities and staff. The essential services will include housekeeping, a section of the kitchen, the coffee shop/dining room, a bar, engineering, front desk and security. This will ensure fewer people about.
  • The staff positioned should be experienced, multi-skilled and loyal employees. It will be a while when other regular staff will be required.
  • All staff should continue to wear surgical gloves and masks to give confidence to the guests.
  • Food menus must be choices of Table d’hote menus each day instead of a full a la carte menu. It will save the cost of having high food inventories. Hotels have to take into account that supply chain vendors will take time to respond to full capacity. Tables in the restaurant should be spaced out.
  • Self-service as far as possible should be encouraged to reduce human contact.
  • Since 95% accommodation lies in the low-priced sector like Bed & Breakfast, budget hotels and guest houses, the country can ride on India’s large domestic tourism to kick start the industry. Inbound traffic on the other hand is bound to be slow because of fear of travel and recessionary conditions restricting disposable income. Corporate travel will perhaps revive the chain hotels though the lock down has shown that corporate travel can be limited with technology aided communication. They may encourage domestic corporate travel.

The second great consideration is liquidity for working capital. FAITH (Federation of Associations in Indian and Tourism Industry) has already made an appeal to the PM for certain concessions (Economic Times). They include:

  • Support the payment of employee salaries for twelve months.
  • Have a twelve-month moratorium on EMIs, advance tax, PF, ESIC, GST, Excise, State levies, bank guarantees, custom duties and security deposits. 
  • Have support for power and water charges.
  • Interest free loans for working capital.

In addition to the above hotels may like to:

  • Renegotiate re-financing loans with better payment plans.
  • Avoiding Discount Panic
  • Enforce rigid cost-control in energy consumption. (Closing of floors will contribute to energy savings).
  • Extend payment cycles with vendors.
  • Only buy essentials for existing occupancy levels.
  • From the marketing standpoint, it is vital to keep communicating with loyal guests, especially the domestic market, through digital marketing and social media during the lockdown and after. The hotels can showcase their contributions to the coronavirus cause.

The third consideration is to move more towards AI and other technology. The Covid-19 has hastened the need to use technology to allow least contact with humans. Here are some suggestions:

  • Self-check-in with codes given on the guest’s mobile to open assigned guest rooms.
  • Guest mobile apps should be able to connect to all buttons and switches in the room to avoid using fingers for touch. It would include controlling the room temperature, switching on lights, controlling the temperature of the shower, remote for the television etc.
  • Virtual views on the TV of restaurants, lobby, and bars to see the atmosphere to avoid crowds
  • Have gourmet food dispensers on floor pantries. People are going to use in-room dining more.
  • Digital payments of bills and food and beverage at kiosks which will give out receipts much like the ATMs.
  • Liquor options in the guest room mini-bar which will automatically bill the guest folio when bottles are withdrawn from the bar.
  • Self-service room amenities from dispensers in the floor Housekeeping store.
  • Self-monitoring gadgets for fever.
  • Revenue Management Software to do the predictions of room occupancy and rates.
  • Big Data analytics to constantly determine the behaviour and attitude of guests to give them customized services.
  • Robots for cleaning carpeted and other surfaces and automated dish washing.

There is no doubt about the fact that the hotels will bounce back remarkably as it always has done post such unusual happenings.

 While the pandemic has brought the hospitality industry to a stop, the continuous efforts of the entire industry to bring in technological innovations and new safety protocols will ensure the industry bounces back with stronger momentum leading out of the crisis. 

While there are big challenges facing the industry today, leading companies with sound business models will do extremely well coming out of the crisis, and have great opportunities ahead for them.

The number one consideration post Covid-19 will be on health and safety which translates into hygiene and sanitation issues of the hotel. The key is to provide physical evidence of the hotel’s concern for health and safety. 

  • The checks and screening will have to be erected for health purposes. The security will check for fever with a remote thermometer, shower a light sanitizer mist, keep hand sanitizers at the reception, elevator lobbies and guest rooms. Ensure the circulation of fresh air in guest rooms and display indoor air quality. The guest room will have a sign mentioning “This room has been sanitized for your health and safety”.
  • Hotels must plan now to do a soft-opening with one floor or two with only essential facilities and staff. The essential services will include housekeeping, a section of the kitchen, the coffee shop/dining room, a bar, engineering, front desk and security. This will ensure fewer people about.
  • The staff positioned should be experienced, multi-skilled and loyal employees. It will be a while when other regular staff will be required.
  • All staff should continue to wear surgical gloves and masks to give confidence to the guests.
  • Food menus must be choices of Table d’hote menus each day instead of a full a la carte menu. It will save the cost of having high food inventories. Hotels have to take into account that supply chain vendors will take time to respond to full capacity. Tables in the restaurant should be spaced out.
  • Self-service as far as possible should be encouraged to reduce human contact.
  • Since 95% accommodation lies in the low-priced sector like Bed & Breakfast, budget hotels and guest houses, the country can ride on India’s large domestic tourism to kick start the industry. Inbound traffic on the other hand is bound to be slow because of fear of travel and recessionary conditions restricting disposable income. Corporate travel will perhaps revive the chain hotels though the lock down has shown that corporate travel can be limited with technology aided communication. They may encourage domestic corporate travel.

The second great consideration is liquidity for working capital. FAITH (Federation of Associations in Indian and Tourism Industry) has already made an appeal to the PM for certain concessions (Economic Times). They include:

  • Support the payment of employee salaries for twelve months.
  • Have a twelve-month moratorium on EMIs, advance tax, PF, ESIC, GST, Excise, State levies, bank guarantees, custom duties and security deposits. 
  • Have support for power and water charges.
  • Interest free loans for working capital.

In addition to the above hotels may like to:

  • Renegotiate re-financing loans with better payment plans.
  • Avoiding Discount Panic
  • Enforce rigid cost-control in energy consumption. (Closing of floors will contribute to energy savings).
  • Extend payment cycles with vendors.
  • Only buy essentials for existing occupancy levels.
  • From the marketing standpoint, it is vital to keep communicating with loyal guests, especially the domestic market, through digital marketing and social media during the lockdown and after. The hotels can showcase their contributions to the coronavirus cause.

The third consideration is to move more towards AI and other technology. The Covid-19 has hastened the need to use technology to allow least contact with humans. Here are some suggestions:

  • Self-check-in with codes given on the guest’s mobile to open assigned guest rooms.
  • Guest mobile apps should be able to connect to all buttons and switches in the room to avoid using fingers for touch. It would include controlling the room temperature, switching on lights, controlling the temperature of the shower, remote for the television etc.
  • Virtual views on the TV of restaurants, lobby, and bars to see the atmosphere to avoid crowds
  • Have gourmet food dispensers on floor pantries. People are going to use in-room dining more.
  • Digital payments of bills and food and beverage at kiosks which will give out receipts much like the ATMs.
  • Liquor options in the guest room mini-bar which will automatically bill the guest folio when bottles are withdrawn from the bar.
  • Self-service room amenities from dispensers in the floor Housekeeping store.
  • Self-monitoring gadgets for fever.
  • Revenue Management Software to do the predictions of room occupancy and rates.
  • Big Data analytics to constantly determine the behaviour and attitude of guests to give them customized services.
  • Robots for cleaning carpeted and other surfaces and automated dish washing.

There is no doubt about the fact that the hotels will bounce back remarkably as it always has done post such unusual happenings.

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