Travel and Hospitality (TnH) - July 2021 by Prem Sagar

ISSUE 10 / VOLUME XII / July 2021 Rs.350 / Pages 52

Reimagining hospitality in a post pandemic world.

EDITOR’S NOTE Let’s find the way! This issue is centred around the difficulties the hospitality industry is facing in current times . Even though I hate that like the majority of our issues for the past year and a half, this issue too focuses on coping with corona. Especially now, when we’re just beginning to turn the corner on what is arguably the worst human and financial crises this industry has experienced. The reality is that even though there is some cheerfulness in the air, thanks to leisure and international travel picking up, the industry has a long road to recovery. More than ever, we know you want—and need—the advice to inform your decision making process and to once again create stability within your organization as the hotel industry begins this road to recovery. In this issue we have spoken to respected industry stakeholders to bring useful and useable information as you continue to plan, rebuild and thrive.

One final note: Tnh Magazine is now very active social media! Make sure to follow our handle @tnhmagazine on Instagram, Twitter and Facebook. As always, thank you for reading!

Publisher & Editor Srishti Jindal

CONTENTS

Insights on how COVID-19 effecting changes in hotels’ marketing strategies

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Expert’s insight into the plight of hotel industry

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An insightful view of how the pandemic has affected hospitality profession

A peek into how a 5-star hotel is regaining it’s business in the pandemic-hit world

Hotel industy’s hope of recveries hang on extensive vaccinations and policy reports

Can vaccines ensure return to normalcy for hotels?

@tnhmagazine

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09 Insights on how COVID-19 effecting changes in hotels’ marketing strategies COVID-19 has caused an unprecedented economic and public health crisis across the world. In the economic sphere, travel & tourism is one of the worst affected sectors. Now when the industry is trying to recover from the two consecutive shocks of the pandemic, it is facing many challenges in operating their businesses. One area where hotels are facing challenges is marketing, which is more important than ever for hotels to regain their business. As the coronavirus has affected normal human activities such as meetings and events, it has become challenging for hotels to do marketing in traditional ways. In this backdrop, hotels have been forced to modify its marketing strategies and plans. They are reassessing their pre-Covid marketing strategies, adopting new practices and adapting to new conditions. In the new normal when hotels’ income has been hit hard by the pandemic and the consequent restrictions, hotels are compelled to minimize their expenses on marketing and advertising. Moreover, in the post-pandemic world, social media has emerged as the primary platform for marketing because of its digital, interactive and cost-effective nature. Marketing verticals of hotels are redesigning their marketing strategies in such a way that they can increase their business without increasing marketing costs. In the health-conscious new world, it has become very critical for hotels that in their marketing activities, they should emphasize time and again their hygiene standards and other safety measures to reassure their customers and attract them.

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Imbibing hygiene protocols In the post-Covid world, although people are craving to travel, they are also concerned about their health and safety, particularly when they are away from their home. In this scenario, emphasizing hygiene standards adopted by hotels in their marketing campaigns is necessary to dispel the health concerns of their customers. Talking about changes in their marketing strategy in the backdrop of Covid-19 crisis, Trina Mukherjee, Senior Marketing & Communication Manager, Multi-Property, JW Marriott, Kolkata, said, “Imbibing the hygiene protocols as an ongoing standard and reiterating the preventive measures through campaigns are important to gain trust of the customers.” Moreover, she said that the ongoing recovery plan must be in sync with the revenue strategy as travel strengthens, and as the market stabilizes with time; month to month recovery plans should be put in place based on the market insights and travel trends. Lastly, it is crucial to constantly build brand awareness and remind our guests of the promise of the brand, as the world comes back to normal. Needless to say, in the new normal, health is the foremost concern for customers, hospitality is secondary, hotels and their marketers will have to keep this fact in mind while formulating their marketing plans.

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Going digital Hotels are devising new marketing strategies taking into accounts factors such as health-related concerns, the social distancing norms and uncertainty of the future. In the new normal, when consumers are spending more time inside home and devoting more time on Internet and social media, hotel companies are focusing more on such online media platforms. “The new reality has strongly laid focus on newer marketing strategies, keeping in mind the social distancing norms and unpredictable scenario, therefore it has been important for us to reanalyze the marketing plan and focus largely on ‘going digital’,” said Trina Mukherjee. The two ferocious waves of the pandemic severely hit all types of travel in the country and across the globe with occupancy of hotels falling sharply. This nosedive in their business forced hotels to bring a shift in their marketing strategy and go digital aggressively. “The drop in volume of business travel made us undertake a remarkable shift in approach – moving from sales to a marketing-focused approach in connecting with our customers, primarily through digital marketing, and this shift came about because holding customer facing in-person meetings became very difficult; we had to stay connected with our guests digitally, through video calls, virtual meetings and presentations, etc,” said Abhishek Sachdev, the Hotel Manager of Fairfield by Marriott Kolkata, talking from his own experience. “Digital marketing in such a scenario became more amplified than ever and will continue to remain so in the coming future with uncertainties still present,” he added. In the wake of the new reality, leveraging digital platforms for optimum marketing and customer-experience has become highly important, and the marketing strategy of hotels like Fairfield by Marriott has become more focused on social media channels and activation. “We are optimizing the use of Facebook and Instagram through our official pages to share relevant information about the hotel and all its activities. Moreover, we have also partnered with F&B sale platforms like Nearbuy and Dineout for a wider customer reach and have seen remarkable success through this,” said Sachdev. Underling the fact that ‘going digital’ has become the key to customer-engagement post-Covid-19, Trina Mukherjee of JW Marriott Kolkata also agrees that hotels need to stay engaged with customers through digital and social platforms considering the new reality. Still reeling under the Covid-19 impact, the financial health of most hotels remains weak that is also impacting their marketing decisions. Massive revenues losses have adversely impacted the financial health of hotels, affecting their ability to spend liberally. Not surprising that hotels are facing budgetary constraints in their marketing activities. While acknowledging the budgetary constraints, Mukherjee said that even with budget restrictions in the given business scenario, planning digital investment rationally and to get impactful returns has been a primary focus. According to her, JW Marriott Kolkata is doing all these things without tampering with customer experiences. The hotel’s strategies have largely concentrated on being content-driven, through different channels by paid advertising, SEO, social media marketing and OTA offer planning. “We have been mindful of curating events that are niche, but smaller in numbers, yet concentrated on varied focus groups,” said Trina Mukherjee, adding, “leveraging on partnerships during such times has been the biggest opportunity for us,”

Focus on local/domestic market In their marketing, hotels, besides focusing on the health and safety of their guests, are also focusing on offering new experiences that could attract customers. Although not a new concept, at a time when long-haul travel is fraught with health risk, experiential holiday, relishing some new experiences, in a destination close to one’s hometown is more desirable. As international travel still remains halted, the focus of hotels’ marketing strategy is concentrated on local and domestic markets. “As the world recovers, it is important to focus on experiential offers or staycation targeting the local and domestic markets,” said Trina Mukherjee, Senior Marketing & Communication Manager of JW Marriott, Kolkata. Moreover, “Given the impact of pandemic on hotels, the strategies will need to be planned phase-wise,” he added. In these uncertain and unpredictable times, hotels are cautious in their strategies and devising short-term and phase-wise strategies rather than longterm.

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Adding value These are times of value-added offerings and generous reservation policy. The idea is to attract hesitant customers who are afraid of future uncertainty. In order to make their marketing campaigns more appealing and effective, hotels are offering more value-added packages and greater flexibility in bookings and cancelations. According to Trina Mukherjee, in order to attract customers in the post-Covid world, hotels need to create offers that have value additions for customers. In addition, their booking policies should be less rigid. Offering extra value for money and flexible cancelation policy to customers will make hotels’ marketing more rewarding.

Vaccination gives hopes With the on-going rollout of vaccination programmes in the country, Mukherjee is hopeful of the future prospect. “We have seen positive trends, where consumer behavior is evolving, as customers are now more open to venture out for activities and social gatherings,” said Mukherjee, adding further that his hotel has curated events, planned smaller wedding events or corporate gatherings, keeping in mind the new normal standards, especially with Marriott International’s safety and hygiene program “Commitment to Clean”, and also by strictly imbibing government protocols. With the pandemic largely under control in India, it seems that the worst is probably over for hotels in the country. But their path to recovery remains patchy and uncertain in view of the looming third wave of the pandemic, surges in cases of new variants of the virus in many parts of the world, and the continued ban on scheduled international flights. Although the country’s vaccination drives give hope, its slow pace is a concern. In this backdrop, hotels have to be constantly conscious of their marketing strategies, tweaking and changing them as per the evolving situation. Going forward, hotels may witness more changes and innovations in their marketing strategies, but old ways of marketing may not return at all, at least in the foreseeable future.

17 An insightful view of how the pandemic has affected hospitality profession The pandemic has immensely affected the workforce in the hospitality industry. It has become quite challenging for the hospitality professionals to work in the prevailing environment that is replete with concerns and anxiety for health and safety, obliging hospitality management to focus on health and safety of their employees as well as of their guests. In exclusive interview with TnH, Nihar Mehta, GM, Human Resources, Sarovar Hotels & Resorts, spoke about the impact of the pandemic on hospitality professional, new trends in this field, changes in HR strategies and more.

19 According to you, how has the pandemic affected the workforce in the hospitality industry?

I would say that the pandemic has affected the workforce in the hospitality industry like none else. Post the last lockdown, there was a recovery in business but overall the travelling and spending had reduced amongst the customers. In the second wave, there have been even further restrictions and hence there was a manpower shortage and cost reductions at hotels. There were times when people working at hotels left their jobs to go back to their hometowns, and this shortage of manpower also affected services at hotels. Travel was reduced extensively again and this resulted in even further loss of business for hotels.

How challenging has it been for the hospitality professionals to work in an environment where concerns for health and safety have become paramount? Working in such pandemic times where safety is an issue has been very challenging. Hospitality management, apart from focusing on businesses, also have to focus on health and safety of their employees and teams, all while safeguarding the health of their guests. Creating awareness amongst employees to constantly follow COVID protocols is paramount and at the same time to train them to be prepared to handle a COVID case, if something arises. There is also an added issue of fear amongst many employees who may not want to return to work during these times. Hence the manpower constraints remain at many of the hotels.

21 How do these challenges vary for professionals working in different departments / verticals at a hotel?

The challenges would vary as per different departments at a hotel. For example, a training manager would focus on training safety procedures and COVID protocols amongst the staff and heads of departments as it is most important in the current scenario that they follow this on a regular basis for their safety and that of the guests. But at the same time, the challenges for the staff at front end is bigger as they have to implement these protocols, and also have to ensure their colleagues and guests are following the protocols. They handle the guests and make sure that they are safe. Hence the challenges do vary from one department to another.

What are the new and emerging trends in hospitality profession post COVID 19? As we are navigating the pandemic, hotel operators are finding new ways of training employees to deal with the major shift of required skills and helping develop entirely new skill sets for the long term.

23 Do you think that utilizing Human Resources post COVID 19 needs a new approach? Please elaborate.

Definitely Covid 19 has brought changes no one foresaw. The lockdown measures and travel restrictions have forced the hospitality sector to go through the worst. During these times, definitely a new approach shall be required to retain the best talents. But there is the reality that the commercial aspect of the business shall not be in the best form, for sometime at least. New ways of training staff on safety protocols would be required. Since there is digitalization of communications taking place, organizations and HR would have to develop and work around ways to communicate to staff digitally. In addition, intensive, open communication is needed internally - with regular staff information, video chats, a hotline etc. Further, there would be budget constraints hence there shall be fewer opportunities in the present scenario. Compensations/bonuses would be affected for some time. Developing policies for staff in terms of safety and health is of prime importance. Additionally, the core of hospitality remains emotions and experience, therefore it is really important to find ways to empathize with staff during this period.

What kind of changes do you observe in HR strategies of hotels in post COVID world? HR strategies would have to focus more and more on employee retention and motivation as retaining specialists is a top priority now. There has to be attention on factors and systems where good employees get recognized. Look at ways to retain such employees, and should develop methods and trainings for employees benefits in terms of learning and skill enhancements. The most important change for HR would be the prime focus on employee welfare and safety, especially during these COVID times. Also, there is a huge shift in modes of communication making it more digital which farther remains a strategy to be worked upon.

25 What is going to set apart post COVID’s hospitality profession from pre COVID’s one?

There is limited budget currently and which will continue for sometime till travel resumes full scale. This would affect many factors associated with the profession in terms of bonus, recreations, salaries etc. Currently, employee retention strategies, training methods, employee health and motivation are key steps to be looked into.

According to you, how can Institutions offering training in hospitality services and adapt their curriculum to meet new challenges in hospitality professions? The processes and protocols during these COVID times have widely changed the workings at hotel. Learning “to always be prepared” is essential for the coming generation of hospitality professionals. To develop the required skills, there should be more exposure at hotels during learning process, so that the future professionals come prepared for the new normal.

Mehul Sharma, Founder & CEO, Signum Hotels & Resorts

27 Expert’s insight into the plight of hotel industry Ravaged by two successive waves of the pandemic and living in the shadow of the impending third wave, India’s hotel industry is striving to revive as are the other sectors of tourism. The industry is pinning their hopes on a comprehensive rollout of vaccines in the country by the end of this year. There is massive pent-up demand for travel, which can give a massive fillip to domestic tourism if people are assured of their safety and health, and an early and comprehensive vaccination rollout is the only way to make people feel safe and immune from the virus. In an exclusive interview with TnH, Mehul Sharma, Founder & CEO, Signum Hotels & Resorts, talked about the impact of the pandemic on the hotel industry, and his hopes of revival by the end of this year depending on effective vaccine rollout in the country.

29 Q. Give us an insight into how the pandemic affected India’s travel & hospitality sector?

This pandemic has been excruciating for the hospitality industry and the entire economy. Hospitality industry has come to a standstill. We gradually opened, but the second wave gave a major hit again. So overall it has been a very troublesome period for the entire industry as the last year was full of uncertainty. Since there was no business at all, it also led to a complete dry-off of all the cash flows which impacted payrolls along with all the other fixed expenses which are required to run an organization. However, we are hopeful that in times to come, and as the vaccination drive progresses in India, we all shall be on the right track.

Q. How has the pandemic affected your operations and expansion plans? The impact of COVID-19 has been such that all other segments of tourism -- inbound, outbound, corporate, MICE (Meetings, Incentives, Conferences and Exhibitions), adventure and leisure -- will continue to underperform till the end of this year. Travelling is innate to humans and having spent time indoors people are yearning to connect, explore and travel more than ever before. While COVID-19 had a crippling impact on the entire travel & tourism industry - the promise of effective vaccine rollout is good news as the year comes to a close. Revenge travel is going to gain further momentum. The massive pent-up demand is going to fuel the need to travel further with a lot of people yet to take their first flight or first real holiday. In terms of expansion, Signum is expanding internationally. All our expenses are consciously controlled. The focus is towards health, safety and well-being for our people and we are ensuring that no additional cost is incurred by the organization. Any additional cost has to be cut down. For a healthy cash flow, we are purely engaged in international expansion.

31 Q. In hindsight, do you think the industry would have been better prepared to deal with such an unpredictable crisis?

We were not prepared enough to deal with the second wave and it is definitely our mistake. We should not have opened up the economy too soon. Yes, it is understandable that the government had a lot of pressure to feed people. However, it backfired. Having said that, we are confident that we will sail safely through these unprecedented times. The only important thing in the coming few months would be vaccinating as many people as possible to ensure that people don’t lose their near and dear ones and our economy comes back on track. It is predicted that the economy for next year will grow at 9.2%. I feel that it will not move more than 6-7% as there will be a long-term impact which will remain for as long as one and a half years to come, while the second wave settles down.

Q. When hotels had started reviving a bit after last year’s devastation; the second wave of the pandemic shattered their revival hopes. The industry is again facing the enormous challenge of reviving its business. According to you, how can this objective be achieved? We need to be extremely cost-conscious, we must be very precise and sure about the fact that we need to open the properties and probably foresee about 35% occupancy. More focus should be on the fact that the entire nation is vaccinated first; travel will only happen once the areas are safe and secure. It’s crucial to be employee oriented, our team members should be safe and healthy along with people who travel are also safe. Health must be a priority in the next 6 months’ time. We expect a lot of support from the government in terms of tax relaxation; in terms of moratoriums; lower interest rates and all the health benefits.

33 Q. In your opinion, what could be the long-term impact of the crisis on the hotel sector?

Well, the situation will improve. The industry will become more tech-based; the costs will come down. We’ll see a lot of mergers; joint ventures; acquisitions. The scenario will have more of a leaner-meaner structure. The government will make more efforts to promote domestic tourism. The focus on schemes like “Dekho Apna Desh” will boost the hospitality industry; the contribution of tourism to the GDP of the country will definitely increase by 2-3% in the next couple of years. Infrastructure will also improve. And hospitality will be taken as a serious sector and the revenue generated through the travel and tourism industry will add-on to the national GDP. Overall, we see a very healthy picture of the hospitality sector in times to come.

Q. In what way can the government help the industry restart and revive tourism quickly? The government can help the industry by providing infrastructure status to it; reduction in the tax structure; and much more moratoriums on loans. The lending should be made easier and the interest rate should come down. Infrastructure for travel in the country should be developed together by the Central and State governments. The government should work to improve connectivity, infrastructure, health and safety as they are all interconnected with the tourism sector.

35 A peek into how a leading 5-Star hotel is regaining its business in the pandemic-hit world The country’s entire travel & tourism industry took a massive hit from the Covid-19. The plight of the travel & hospitality sector in India’s national capital has been no different, as Delhi has been one of the worst Covid-19 affected cities in the country. The two brutal waves of the pandemic hit the core of the national capital’s hospitality business. Hotels and restaurants in the city suffered immeasurable loss due to Covidinduced lockdowns and other restrictions. When the hospitality sector had started recovering from the shock of the first wave, the second wave delivered a catastrophic blow to the sector, dashing all hopes of returning to the normal business cycles. Now that the second wave is almost behind us, and nearly all economic activities have resumed, the hospitality sector is also showing signs of recovery owing to the pent-up domestic demands for travel and dining. Yet, managing 5-star hotels remains a big challenge for their general managers in the current scenario. Hotels continue to face various challenges due to the lingering uncertainty over the pandemic and other issues. In this light, TnH got in touch with Shuvendu Banerjee, General Manager of Crowne Plaza Today New Delhi Okhla to know how his hotel is currently performing and recovering from the Covid-19 impact and what new trends are in the hotel business. Located in the vicinity of Okhla Industrial Area in South Delhi, Crowne Plaza Today New Delhi Okhla is a 5-star business hotel. An upscale brand of IHG, Crown Plaza has business travellers and MICE as its key segments. Initiating the conversation, Banerjee said that the pandemic had definitely impacted the business of his hotel last year and again this year; but now business is improving due to resumption of domestic travel. “Although corporate travel may take some time to recover, we are getting business back from the domestic travel segment. In order to attract guests, we are offering packages for staycations and workations, some of the key post-Covid travel trends. Fed up with work-from-home, people are coming to the hotel to stay, work and enjoy their time. Many are coming with families and friends to enjoy weekends,” said Banerjee, adding that today the desire to escape from the monotonous home and office environment is driving people to travel and they are opting for staycations and workations.”

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Main Sources of Business With international scheduled flights still banned and inbound travel yet to resume, the domestic market is the only source of business for hotels in the country. “Obviously as of now we are getting our business from the domestic market only because inbound travel is still restricted,” said Banerjee, and he added that in the foreseeable future the domestic market will continue to be the primary source of business for hotels, and his hotel will continue to focus on this segment. Banerjee informed that currently occupancy at his hotel is between 40 to 50% on weekdays and 60 to 70% on weekends, which are substantial figures in the current scenario.

Food & Beverages (F&B) F&B has always been a significant aspect of hotel business and key source for their revenues, but in the new normal, it has assumed more significant for a hotel from two perspectives, one to generate more revenues and other, to enhance customer satisfaction in light of customers’ preference for healthy foods; therefore hotels are doing many experiments and innovations in this area of their business. They are experimenting with their menus as well as ingredients, and Crown Plaza is among leading hotel brands which are doing these things very earnestly. “In the post-Covid world, we are certainly more focused on the F & B segment, which is today very important for a hotel to generate revenues. We have started home delivery and take-away services for customers, besides dining options at our restaurants. We have tied up with online food aggregators to provide home delivery of food,” said Banarjee. In the post-Covid world, people have become more conscious about their food preference. Aimed at catering to new expectations of customers, Crowne Plaza Today New Delhi Okhla is also doing experiments in their food offerings. Banerjee informed that the hotel has launched ‘Kaadha station’ that serves as an immunity booster for its guests. Besides, the hotel is also using a variety of immunity boosting ingredients such as herbs and spices in cooking food. These are the kinds of things that guests today appreciate at a hotel due to their health concerns.

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Weddings Weddings are another segment that has become more relevant these days for hotels. Unlike travel, weddings are something that can’t be postponed for long even if time is not opportune. So when travel demand is low, hotels have increased their focus on the wedding segment. In the new normal, residential weddings have gained much currency as a business segment for hotels. As Banerjee says, “Residential weddings have emerged as another important segment for us in the post-Covid world. We are hosting lots of residential weddings at our hotel with wedding guests staying in our rooms. Besides the venue, a family books 15 to 20 rooms for their guests to stay at the hotel. On an average, one wedding has around 50 people in attendance. We organise small weddings as hosting bigger weddings is not possible in Delhi due to restrictions.” Due to the prevailing Covid protocol and restrictions, currently not more than 100 people are allowed to attend a wedding in the national capital. “These are some of the segments we are focusing on to maximise our revenues. In fact, most hotels are focusing on these segments these days as international and corporate travel may take time to restart. I think corporate travel is unlikely to restart any time before September or October, and as uncertainty over restarting MICE continues, the domestic segment remains the only source of business for us as of now. Domestic tourism is certainly peaking up and that gives us hopes for further recovery.”

Safety & Health Top Priority In the post-Covid world, safety and health consideration has become more important than ever for both hotels and customers. Besides guests, hotels also have to care for the safety and wellbeing of their employees. Crowne Plaza, which always has had a very high standard of hygiene, has further enhanced its hygiene and cleanliness standards to meet the requirements and expectations of the post-Covid world, and provide a safe and secure environment to its guests and employees. “The safety and hygiene has become the most significant aspect of the hospitality business in the pandemic-hit world. Now the most important thing that everybody is looking for is safety and hygiene. We at IHG have certain tools and guidelines that we follow strictly at our hotel. We have been following our IHG Clean Promise, which is our brand standards for cleanness,” said Banerjee, adding further, “We make sure that our guests and colleagues follow these standards, along with mandatory restrictions and guidelines so that our guests feel that they are at safe and sound place as far as health and hygiene is concerned.” Crown Plaza Today New Delhi Okhla is adopting measures such as keeping its rooms out of service for their sanitization and disinfection. Keeping health and hygiene concerns in mind, the hotel has started an assisted buffet at its restaurants where employees wear gloves and masks while serving food. Moreover, to minimise touch-points and interaction with staff, the hotel is providing QR codes for availing many services. Check-in and checkout services have gone contactless. Guests can check the hotel’s menus from their rooms by using QR code; they can also pay bills by using QR codes. The hotel has stopped giving hard copies of its menus to its customers. “Because of their concerns about health and safety, guests these days mostly prefer to stay inside their rooms; they don’t want to step out too much outside their rooms. Most of them prefer to dine in their rooms rather than at our restaurants,” said Banerjee, talking about post-Covid behaviour of their guests. “Most people prefer to have minimum touch-points, minimum interactions with staff and demand more touch-less services. But there are some who do like coming out and enjoy food at our buffet.” With safety and security as its top priority, and focus on the domestic market, Crowne Plaza Today New Delhi Okhla is witnessing considerable recovery in their business. The hotel is very much prepared to organise meetings and conferences when they are allowed to resume. Challenges persist, but the hotel’s GM Shubhendu Banerjee is successfully leading the recovery process at the hotel, ensuring that his guests have good times at the hotel and return happy and satisfied from there.

41 Hotel industry’s hopes of recoveries hang on extensive vaccinations and policy supports For India’s hotel industry, the struggle to recover and survive continues. Although hotels located in some pockets are reporting sporadic recoveries due to domestic tourism, the business sentiment by and large remains subdued due to the two waves of the pandemic. It is very much evident that COVID-19 has shattered the travel & hospitality industry not only in India but across the world. In India, during the two ferocious waves, the necessary but severe measures such as lockdowns taken to contain the spread of the virus have had devastating impact on the sector. This has caused massive job losses. Many hotel chains had to send their staff on leave without pay or cut jobs. Some had to close their floors. Hotel chains had to postpone their new hotel plans. Some were even forced to close completely. As has been reported, in month of June, the iconic Hyatt Regency hotel located near the Mumbai Airport had to be shut down temporarily because of the financial stress. In a statement, the hotel’s GM Hardeep Marwah informed his all staff that no funds were forthcoming from hotel owning company Asian Hotels to pay salaries or support the operations of the hotel. There are other many cases of hotels and restaurants being temporarily or permanently closed due to their financial stress. According to the Federation of Hotel and Restaurant Association of India (FHRAI), the India’s hotel industry suffered a massive loss of over 1.3 trillion rupees ($17.4 billion) in revenue for the fiscal year 2020-21 alone because of the pandemic. India has about 150,000 branded hotels. The Hotel Association of India (HAI) estimates that about 20-25% of all the branded hotels in India are staring at the risk of permanent closure. Every segment and size of hotels has been hit hard by the pandemic.

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Current woes Confronted with such a gigantic existential crisis, the hotel industry is desperate for recoveries, which are important not only for hotels, but also to save millions of jobs that travel and hospitality industry generates directly and indirectly in the country. However, they are facing many obstacles on their path of revival. From the looming threat of the third wave in the country to the continued uncertainty over the resumption of international travel due to resurgence of the pandemic in many parts of the world, the industry is grappling with many impediments. Post the reopening of the economy in the aftermath of the second wave, domestic tourism is seen as the only hope for the industry to recover as international travel remains suspended. But hotels and restaurants are unable to fully tap domestic demand in view of varied restrictions still in place in different states. Although, the pandemic is under control in most parts of the country and almost all economic activities have been allowed to resume, hotels and restaurants are still facing some irrational restrictions, undermining their efforts to revive. For example, in most states, restaurants are still not allowed to utilize more than 50% of their seating capacity. Then there are states which have placed restrictions on the opening times of restaurants. This was the case in Maharashtra, but after protests from the industry bodies, the state government has now agreed to allow restaurants to open till 10pm, as other commercial establishments are allowed to do. It is pertinent to note that even for hotels, restaurants are key source of revenues; therefore, such restrictions on their seating capacity and timing adversely affect their revenues generation efforts. MP Bezbaruah, General Secretary of the Hotel Association of India (an association of India’s high-end hotels) said that the industry realizes that currently the primary consideration of governments is health and safety, and if governments say something is contrary to public health we should not complain. “But we have seen that some state have allowed more flexibility for travel and hospitality businesses while others are less flexible. I think the policy should be pragmatic. We have been requesting governments that there should be a continuous consultation with the industry. They should not do something just because some consultants or health experts feel so. The industry’s inputs should be taken inputs into consideration before announcing any restrictions on the sector.”

Revival Hopes Talking of the recovery expectations, Bezbaruah, a retired IAS officer, who was India’s Permanent Representative at the UNWTO, says that the recovery in the travel & hospitality industry will depend on a few factors: “the first factor is the uncertainty about the behaviour of the pandemic; whether there is going to be third wave or not and if there would be further mutation of the virus; the second factor is how fast we can cover our population with vaccinations.” Bezbaruah expects some revival in domestic tourism in the coming winter tourism season, and domestic tourism returning to normalcy in the next year, again subject to those factors. He says that sporadic revivals in domestic tourism are expected during the coming winter tourism season, but a broad-based revival in domestic tourism would largely depend on whether states can have harmonious Covid-19 protocols for travellers. “For example if you are going to the north eastern states, even if you are fully vaccinated, you have to undergo Covid-19 test in some states there. If I have to go to Manipur and Mizoram, I have to go through Assam but Assam has rigid protocol, therefore, it is difficult to go to Mizoram or Manipur, even if these sates have flexible protocols. Stringent protocols in some states are hindrance on the path of domestic tourism revival. If states can create harmony in these matters, tourism will recover in most parts of the country otherwise it would be localized in areas where there is more flexibility in protocols,” said Bezbaruah. Regarding harmonization of protocols, the HAI has requested the Union Tourism Ministry to take it up with the Health Ministry but the MoT said the Union Government has delegated these matters to states. However, the MoT has promised that it would request states on this matter.

45 The biggest challenge: Lack of liquidity Lack of liquidity is certainty the top-most challenge before the larger travel & hospitality industry, which needs urgent attention and aids from policymakers. The hotel industry has suffered huge revenues loss due to prolonged closure of business and subdued demand. Due to lack of liquidity, the industry has been unable to service its loans. Moreover, it is burdened with statutory liabilities and operating expenses. “The Government of India once in a while comes out with some relief measures for the industry in ad hoc manner but that aren’t much helpful. We have been requesting the government to compile a comprehensive relief package for the travel and hospitality industry for the duration of six months to one year,” says Bezbaruah, adding that the Government has given some reliefs in the matters of liquidity, like moratoriums on loan payments, but in the meantime, the second wave came that aggravated the crisis, therefore, in order to address the liquidity crisis, the government should extend moratoriums, and also offer support for interest payments and getting new loans from banks on eased interest rates. The industry associations have been telling the government that liquidity is the most important problem for the industry. Lots of travel agents, tour operators and hotels are struggling to sustain their business for the lack of liquidity. “How we can have domestic tourism without travel agent and tour operators. Some report estimates that 40 to 50% of them have gone bankrupt. They urgently need some liquidity support from the government to survive. Similarly, financial supports should be extended to hotels. This is vital for the revival process,” Bezbaruah commented. The industry has also been requesting the Government to extend the service export from India scheme (SEIS) for the tourism sector, and release its pending dues under the scheme. Moreover, the industry associations have been asking state governments to waive off electricity dues and other statutory fees for the period states had enforced lockdowns since it were states which did not allow businesses to operate. States have to understand that when businesses were not allowed to operate, these fixed charges have to be waived. The Central and state government will have to come up with some support in all these areas; otherwise the industry will suffer for long, according to Bezbaruah, who says that the GoI, without further delay, should come up with a comprehensive package as a short-term revival strategy. “We have to revive the industry now, and for that some short-term measures are immediately required,” he added.

Trade bodies like HAI, FHRAI and others have constantly been requesting the government to help the bleeding industry to survive, stating that in the absence of the government support, the industry would collapse. The HAI recently urged the GoI to help the hospitality industry. A delegation of HAI recently met Union Minister of Culture, Tourism and Development of North East Region, G Kishan Reddy and submitted its recommendations to him for the revival of the industry. Through its representation, HAI urged the government to infuse liquidity into the industry through means like an extension of moratorium, one-time loan restructuring, improved terms under the ECLGS (Emergency Credit Line Guarantee Scheme) and revised eligibility ratios under the resolution framework. The association also reiterated its old demand of granting industry status to the hospitality sector. On its part, the FHRAI has also urged the government to grant a moratorium on loan and interest payments. The association recently submitted some suggestions to the Union Minister for MSME Narayan Rane and to the Ministry of Finance. These suggestions include moratorium on payments of interest till the normalcy returns in the sector, and changes in interest rates for the ECLGS to provide relief to the distressed MSMEs by providing loans at concessional rates. According to FHRAI, the short term-credit schemes are not sufficient to mitigate the larger issues faced by the sector. FHRAI asserts that the GoI’s flagships initiatives for MSMEs such as ECLGS and the resolution framework for loan restructuring have been plagued due to apathetic attitude of the banks and financial institutions. It is pertinent to note that many hotels and restaurants come under MSME category, but due to implementation bottlenecks they are unable to benefit from the schemes meant for MSME sector. Conclusion It is absolutely clear and established that the country’s travel & hospitality industry including hotels is facing an unprecedented crisis, but considering its contribution to the economy, its survival is important for the economic development of the country. Neglecting such an important sector will have short-term as well as long-term consequences for the economy. It would be unwise and irresponsible for the government to overlook its plight and problems. In order to help the travel and hospitality industry in these critical times, the Central and state governments must take all necessary steps including easing liquidity crisis, removing irrational restrictions and improving overall business environment. It’s their national responsibility and it is in the national interest.

47 Can vaccines ensure return to normalcy for hotels? India’s travel & hospitality industry has had a very hard time in over the last one and a quarter years. Last year the spread of the Covid-19 pandemic followed by the stringent national lockdown brought the industry to its knees, leaving it devastated. With their operations halted due to the lockdowns, the industry at large and hotels suffered enormous loss. Even when the lockdowns were lifted and hotels were allowed to reopen, hotel business remained very low due to sluggish demands. In the early months of this year, when the pandemic appeared totally under control, the hotel industry was showing some strong signs of recovery due to the return of the domestic tourism, but that recovery and related optimism proved short-lived. In months of in April-May, another fierce wave of the pandemic hit the country, forcing the returns of the lockdowns and restrictions that devastated the already battered travel & tourism industry. Hotel business suffered another shock. Its financial woes worsened further. With little revenues coming, their losses kept mounting. Fast forward, the pandemic has mellowed its ferocity and the travel & industry is again showing some signs of recovery on the back of domestic demand, but many Covid-19 induced challenges continue to persist for the industry. The pandemic and related uncertainty still cast a shadow over the financial health of hotels, their operations and performance. International schedule flights remain suspended. Domestic demand is growing but its way behind its pre-Covid level. Meetings and conferences are yet to restart. Restaurants continue to face restrictions on their seating capacity. Corporate travel is yet to rebound. Then, there is continued uncertainty over the pandemic. Experts are forewarning about the threat of the possible third wave in the country, and many parts of the world are witnessing surges in cases of the mutant variants. Therefore, the hotel industry has a very tough road ahead. It has a long way to go before it regains normal business. Obviously, among the many challenges that the hotel industry is facing currently, returning to normalcy and fully reviving their business remain their biggest challenge. Only a full-fledged recovery can alleviate their financial misery on a long-term basis. The government help, if at all it comes, will bring only short-term respite. No industry can survive on the continued government support, if it keeps underperforming for long for whatever reasons. And the government will also not be able to support it continuously because of its own fiscal constraints.

49 But how can the full-fledged rebound be ensured in short to mediumterms? Amid these all challenges and uncertainties, the on-going vaccination drive does give a ray of hope for the travel and tourism industry including hotels. A complete recovery is very much contingent upon people’s sense of safety and wellbeing, and the absence of any restrictions on travel. If people feel that the country and the rest of world are totally safe from the pandemic, and there is no threat to their life due to the virus, besides withdrawal of all restrictions/Covid-19 protocols, they would certainly regain their confidence to travel, and the normalcy for travel & tourism industry will return. To bring this sense of safety and confidence back, comprehensive vaccination coverage is a must. Fortunately, vaccination drives are on in many parts of the world including India. It is among the few countries which have developed Covid-19 vaccines of their own, in a very short period of time. The country launched the world’s largest vaccination drive against Covid-19 in January this year by first administering doses to the frontline health workers, but the drive got momentum only after the second wave, in the months of May-June. As of now, India is using mainly two made-in-India vaccines, Bharat Biotech’s Covaxin and Oxford-AstraZeneca Covishield, besides Russia-made Sputnik. Vaccinating such vast populace is a herculean task, and it will surely take time. The government’s stated target is to vaccinate all of its adult population by the end of 2021. But, so far India has fully vaccinated only around 12% of its adult population. Given the current rate of vaccination, it is unlikely that India will be able to fully vaccinate its population by the end of this year. According to a report by the State Bank of India (SBI), the critical mass (70%) will be covered by the first dose by the end of November this year and by the second dose by March 15 next year. One can hope that all adults will be fully vaccinated by mid-2022. Although many Indians, with the sharp fall in the Covid-19 caseloads, have started travelling inside the country, once all adult are fully vaccinated in next six to nine months, people will regain much needed confidence to travel, provided there is no third wave in the near future. This will also prompt authorities to withdraw remaining restrictions. With the confidence returning, domestic tourism will bounce back fully and hotels would become one it its biggest beneficiaries. Thus, as far as domestic market is concerned, after the comprehensive vaccination coverage in the country, the hotel industry can hope of the return of a normalcy in the next less than one year, by mid-2022. But uncertainty would continue to cast a shadow on inbound travel, and its revival would depend on many factors including the overall pandemic scenario around the world and how vaccination drives progress in the rest of the world, not only in rich countries. In all likelihood, inbound tourism will take time to recover fully because many countries are yet to start vaccinating their nationals and some are even reporting surges in new variants of the virus, therefore, the government may not withdraw ban from the international schedule flights any time soon. To sum up, the return of the full normalcy for travel & tourism sector and hotels remains a very remote possibility even if India successfully vaccinates its entire adult citizen in the next one year or so.

DL-SW-01/4211/20-22 | DATE OF POSTING: 5-6 OF MONTH | RNI NO. DELENG/2010/33723 | DATE OF PUBLISHING: 4th OF THE MONTH