What COVID -19 Means for Hospitality Going Forward
The way forward is not easy. It is evident that it will not be business as usual.
Since Christmas, I have not seen people of all walks of life eagerly waiting for any sign and hint of the word ‘package’. And at these times of Corona, the brighter side has been that hospitality professionals have got more time to spend with their families than ever before. For some of us, it has or may make up for a lifetime of absence. Because in the profession we are all the time serving and taking care of others. We are at work when others are looking to enjoy. From weekends to holidays to new years. And we take it as a matter of pride. But like everyone, we also would like some attention from time to time. Even the hospitality industry, (which has so far managed to always fight its way and fight alone) needs what is called TLC ( or Tender Loving, Care !). Not so much from our customers, but definitely at this point from the Government.
Andrew Carnegie said, “The older I get, the less I listen to what people say, and just watch what they do”.
The government claims to love us, but their actions show otherwise. While nobody denies we are leading industry when it comes to employment generation. Our industry sources entire spectrum of vendors, suppliers and staff. Unlike software or other industries, a fancy degree is no barrier to be employed in a restaurant or hotel and make a career. We are also one of the highest GST and VAT (yes we pay both, because excise is still not merged under GST). Yet the actions of the government show that they feel that hospitality is not a business run by people. Rather a side business, which is more like a hobby. And so there is ample money to put from the “anchor business” into this business. And so they need mo support. Instead, let’s milk the industry. Because anyway they are selling a Rs.10 tea for 500.
Maybe we have grown used to such apathy and become so string and resilient, that it is detrimental to us. Because we have survived (barely albeit) in various rounds of calamites and catastrophes the thought is there in our minds that we cannot expect anything from the government. Though we always wait for Santa to come, and give us our gifts and packages, he’s too busy going to other people’s houses and showering and helping them.
And so we must once again help ourselves if we are to survive and then look to revive ourselves. This time things are different, as it is a direct risk to life and health of staff, guest and public at large. And since this is an Invisible Threat, you really don’t have any idea of knowing if you are successful. We may only truly return to normalcy only after the vaccine is found. Till then this is what it means going forward in my opinion:
- Hotels will have to review entire business plans for the next 3 years. While the next 1 -1.5 years is going to be affected, the business plans for the next 3 years at least will be affected. All expansion plans, capital and renovations will need to be deeply assessed. We can expect many things to be left incomplete, many contractors to go bust, lack of availability of contractors and staff in the immediate future etc. Entire companies funding and their balance sheets will need to be addressed. And but obvious any and all funding to this sector whether equity or debt, will come with utmost difficulty.All the hoteliers who started and executed leased hotels and models based on a minimum guarantee, will need to address the situation of existing leases and expenses before looking at new. There will be a new set of hotels in the market, either because the old leases have been discontinued, or because existing hoteliers just don’t want to run their hotels by themselves.
- Like the knife, which in chef’s hand is for creation and someone else’s is destruction. With numerous states relaxing their labour laws, while I’m sure no hotelier is interested in exploiting their staff, definitely it allows flexibility. In these times when there is lots of uncertainty as to which areas (like f&B or specific restaurants, or delivery or gym etc.) will work. Hence we can have flexibility in appointment and restructuring if things are not working out. Also for various sections like have people come in for hourly wages of part time work without problem, for example we may only be operating the restaurant for breakfast, since outside guests may not come to restaurants for a while. So this is something that we can asses and use to our advantage which was not there before. It will definitely allow us to take few more risks, which would have been a hindrance before.
- Greater acceptance of staff mindset of remote working and outsourcing. As what would have taken two maybe even four years of mindset change. As peoples mindset changes slowly, has happened automatically. While video conferencing has been around over a decade, its acceptance was slow. In fact even though many tried and implemented work from home, it was not really truly accepted. Today, it had become need of the hour. And staff is more ready to remote working. Even software is totally tuned to remote working. The bandwidth and internet rates allow it also. So an entire ecosystem is now ready for allowing work from home or remote working. No need of having everyone come to the hotel or office. Which is a huge benefit? One that should be used, because all back office departments, need not come to office on daily basis. The common staff can have common work space. This can help reduce costs to the hotel like construction of additional office space, cabins, etc. and also uniforms, cafeteria and cleaning. All of which is significant when you add it up and over the year. Departments like accounts, credit, reservations, Revenue Management, sales, purchases and within other department’s specific roles. All can take advantage of this. It could also mean, hotels which are in smaller towns, or locations without high end talent or maybe cannot afford, can get access to these talent through remote working.
The way forward is not easy. It is evident that it will not be business as usual. Rather what once upon a time would have been considered absurd, and not Hospitality but found in hospitals, is suddenly the need of the hour. Our Industry, as always, faced with perils that we must overcome ourselves. And from somewhere and somehow we always have found the strength to overcome. This time I’m sure will be no different.
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