Shantanu Lahiri, Managing Director of White Lotus Advisory Services Pvt Ltd., is Advisor to Board of numerous Hotels & Resorts, Hospital & Healthcare, Malls & Real Estate Organizations; Email: shantanu@thewhitelotus.in; Website: www.thewhitelotus.in

Here’s what Hoteliers need to know

In a Research by White Lotus Advisory team on set of travellers and decision makers of various Industry sectors, revealed that the sentiments were not as it seems. The nCovid-19 and its ever evolving mutants are leaving behind lot of scare & scar in the minds of such target group. The scare of economic downturn, decreasing Purchasing Power Parity and moreover the fear of unknown has been hitting hard on everyone. Medium budgeted travellers and their psychosocial factors were mapped during the study of such respondents. It was strangely observed during the one-on-one research that the psychological impact of this Covid19 pandemic has created a large mental ordeal. So much so, some of the respondents have even exclaimed “What will happen to my family, if anything happens to me. Will my Company or the Government take care of them”. Our analysis and forecast sees this as an over frame for a slow revival process in months to come unless rendered through a great motivational and stimulus program

Prelude to this assessment from the lens of Healthcare: Since we are intricately associated with Healthcare Industry for many years now, it is to be noted that we would have to live with the virus or many such viruses and create the new normal as the four pillars of our strategy—hygiene, distancing, screening, and masks — will have to be a part of our normal life, unless we are showcased with a data which says that 80% of our population has been infected and most of them, barring the unfortunate, have developed immunity. Medicines and vaccines seems to be at a distance now. We have to think and execute about how the workplace’s regimen could be transferred to life outside the lockdown Covid19 stigma. Here starts the clinical journey of Luxury Lifestyle Industry – Hotels & Resorts. Seemingly, the change to be brought about and the communications to be established with consumers are beyond few Digital Marketing initiatives that speaks “We maintain all sanitisation norms laid down by the specialists”. Hygiene of employees are not only a statement but a series of action that needs monitoring every 14-days. Specialists and Advisors make things happen without disturbing the line function. Each setup should have a clinical mystery audit of their own established, which reports the health status of every individual across Board…EVOLVE THE TRUST.

The fifth pillar, arguably the most difficult is Culture, and is a new combination therapy to stop the virus. The focussed desires have to naturally shift towards an “Integrated Wellness Hotel” where embracing this new clinical and service culture is of paramount importance. Archetype in its own way, which we have not seen as a routine culture over decades, but safety and freedom for all, is a must. It is about not wanting others to be sick and hence the self-precaution. The metaphorical element states that TRUST needs to be regained, which incidentally has lost completely in the real life drama that has set a tone for new journey for all. All the Hotels & Resorts have to have the clinical aspect equally geared alongside the dietary aspects of herbal high-immune culinary offerings on the platter. Somehow, I would not wish to elaborate much on the guidelines here, since they are available on public domain of MoFW, ICMR, WHO guidelines, HRAI and FSSAI.

Overview of some of the fact findings of the Research by White Lotus Advisory

Before we slice the Researched data into a forecast-demand calculation for the Metros, it is important to share the following:-

• 91.5% of the respondents mentioned that Hygiene protocols of the Hotels & Resorts would make a decision making impact for them to stay. In more than 50% cases, the Corporates would lay down their own guidelines and it is quite likely that the Hotels may have to expose their working conditions in cleanliness, food preparations, fssai norms and other procedures for the audit teams of such corporates, as and when they demand
• With respect to Food & Beverage, at least 72% stated that they would prefer room service or Hotel restaurant for their food and liquor. In case the Hotel does not have liquor license, then liquor delivery would be preferred rather than going to the nearby hop-stop junctions for food & liquor
• 76% of the respondents would wish to deal with Hotels directly, as a mandate for Regional Offices to audit the Hotels before sending visitors to the empanelled Hotels. This would automatically consider the Hotels who were operating on strong CVGR base to quickly turn around the businesses to their favour, and in all probabilities, OTA’s may be a restricted option for such travellers
• OTA dependent Hotels may take a longer time to recover basis the fact that the relationship with the Corporates existed only through the OTA Channel and not the line function Sales front-liners
• When the respondents were queried on their holidays, 58.5% responded that they may not prefer destination for vacation beyond 100 Kms radii at least for 1 year while balance 41.5% stated that they could travel anywhere in India for their vacation, keeping aside the International vacation plans completely out of the bay. However, it also needs to be noted that safety and hygiene certifications were of greatest importance for such decision making, since it meant travel with their families. We see branded Hotels having an advantage of their Brand promise as a part of business recovery for Resorts.

Assessment of the Study on Various Industry Sectors Vs. Hotel Segments

1. The graph below illustrates the de-growth percentages as prospect businesses for Hotel Industry in the various segments that they operate. It is estimated that Entertainment Industry will contribute the least while Consulting, Audit, Insurance, Legal Advisory Firms, Education Institutions may have either same level of contribution or may be higher in some cases. Chemical, Cement Industry, Pharmaceutical, Insurance, PSU’s and FMCG contribution will see a reasonably lower de-growth.

Graph 1: The Hotel segment operating between INR Rs. 2500-3000/- have shown lesser de-growth while the ranges above INR Rs. 4000/- has shown sizeable de-growth. Essentially, every Hotels have to carefully devise and design their Rate Management Matrix.

2. The overall summarised demand has been mapped under various conditions of Administrative policies, the revised budgets, mandate & need for travel, the relative Sales targets & Assignment targets to be accomplished, the funds allocation, the psychological aspects and the adaptability to the new normal.

Graph 2: The demand forecast across all segments of the Hotels in Metro cities, as illustrated above shows that Entertainment, IT & ITeS sector, Retail Brands, PSU’s and Conglomerates will have sizeable reduction in their demand for Hotel room-nights.

3. The summary all Industry Sectors and Hotel Segments shows the trendline of the forecast that is likely to happen in the major metros

Graph 3: The Sectoral demand has changed as compared to a pre-Covid19 scenario. In some case, there has been element of 80% dip and in some cases there has been 20% dip. Interestingly, some of the respondents hardly reduced their travel elements but wished to renegotiate with the Hotels directly, subject to satisfactory presentation of hygiene protocols by the Hotels. In other cases, there has been no change in price reduction but sizeable change in the demand. Unfortunately, that 4% of the respondents under Retail and Manufacturing Sectors, have principally decided to close their business expansion, city offices or even their entire entity in India.

4. The graph below illustrates the Contribution Change Industry Sector Wise Vs Hotel Segment-wise

INR Rs. 2500 – 3000/- segment

Graph 4: INR Rs. 2500 – 3000/- Hotel segment Industry Sector-wise. This segment takes the advantage of the total contribution that would exist in the market

• INR Rs. 3000 – 4000/- segment

Graph 5: INR Rs. 3000 – 4000/- Hotel segment Industry Sector-wise. This segment gets medium advantage unless the shift is to deflate rates but cost assessment in maintaining high standards with proper line function personnel are also important

• INR Rs. 4000/-++ segment

Graph 6: INR Rs. 4000/-++ Hotel segment Industry Sector-wise. This segment has to really take the beating hard. A greater Rate Management and re-purposing has to be the approach with clinical positioning.

5. Focus Industry Sectors for Each Segment: These 3 graphs given below quickly summarises the solutions for each Hotel segment to focus on each Industry Sector. This will revive the Hotel segments to a sustainable position, given the conditions of hygiene protocols, as afore-mentioned in this literature. Impetus on proof-of-hygiene every 14-days could be a good way of instilling trust into the Corporate customers. However, this should not be limited to travellers but also to the Administrative Departments, Legal Departments and HR Departments of such Corporates

Graph 7: The Hotel segments ranging between INR Rs. 2500-3000/- must focus in the Agriculture & Agro products, Chemical & Cement, Conglomerate, IT & ITeS, Pharmaceutical and Retail Sectors for their share of room-night contribution

Graph 8: The Hotels ranging between INR Rs. 3000-4000/- have lesser share from each sector but have all the sectors to cover, as illustrated above. They may consider rate revisions through ROTD methods also

Graph 9: The Hotels ranging above INR Rs. 4000/- ++ have least share in some of the sectors while in some cases, the trust factor on Branded hotels would have a precedence over unbranded or newer properties.

6. Take-aways of this Research and Suggestions:-

• Need to reach out to a larger audience
• Instilling confidence on each and every traveller, hence the communication has be on a larger spectrum and not limited to bookers
• Defiance of any complaint is a history
• Healthcare is of primary importance
• Introduction of UVGI concept for those using Chilled Water Cooling systems
• Introduction of Sterilisation Chambers (not sanitisation) at Hotel entrances
• Training of personnel in their communications, instilling trust and understand affordability is paramount
• Proof of hygiene protocols including Food production areas to be published and regularly communicated. This would eventually remove the fear component from the travellers
• Hotel Industry needs to assist other Industries revive in order to stay afloat
• Immuno-Efficient Menu needs to be designed, especially for Breakfast
• Ayurveda based tonics and organic foods to be introduced
• Workshops to be conducted for Corporates across NHRAI, EHRAI, WHRAI, SHRAI, FHRAI, SKAL and other Hotel & Restaurant organizations. Representation to MoT could assist the cause of sponsoring such programmes

 

Well, I could say that should we be able to sustain as a team, we help our Industry in fighting the pandemic and the economic downturn! We are surely hopeful for a brighter tomorrow and let’s face facts with the gears on!!