Hospitality Industry will have to Re-engineer Itself to Emerge Out of this Pandemic: KB Kachru, Radisson Hotel Group
Industry veteran KB Kachru, Chairman Emeritus and Principal Advisor – South Asia, Radisson Hotel Group shared his views, suggestions and insights on the impact of COVID-19 on the hospitality sector.
THE HOSPITALITY industry is a major contributor to the country’s GDP and employment opportunities. Our industry has great potential for creating jobs for the middle class and below. Contrary to public perception over 85% of the industry’s inventory is in the budget or mid-market segment. Even as of today, there are close to 5 crore jobs at stake. Industry veteran KB Kachru, Chairman Emeritus and Principal Advisor – South Asia, Radisson Hotel Group shared his views, suggestions and insights on the impact of COVID-19 on the hospitality sector.
What in your view would be the impact of the COVID-19 on the industry?
With COVID-19 pandemic gripping the country rapidly, the hospitality industry is facing unprecedented revenue loss. The industry has registered a huge drop in revenues. Inbound foreign tourism has come to a grinding halt with limited scope for quick revival. Corporate travel business is also expected to be grossly impacted.
It is no surprise that the industry would also be amongst the last ones to recover long after this crisis is behind us as health and safety become top concerns for business and leisure travellers alike. Needless to say, the hospitality industry is amongst the worst hit and will have to re-engineer itself in many ways to emerge out of this pandemic.
Do you think there is a reset of the global order across industries and does it mean the fittest and sharpest will come back sooner than the others?
The outbreak really is a human tragedy first, affecting hundreds of thousands of people across the world. Its impact on the global economy continues to grow in severity with each passing day posing a definitive reset of the global order across industries. In almost all industries, crisis response is already in full motion. Employee safety and business continuity are top priorities for each sector. Even as China now returns to work slowly, they are finding operational health to be a challenge. This outbreak hasn’t just shaken the economy, it has also reset consumer behaviour and business models. Organizations who can successfully reimagine what this next normal would look like, what would be its implications, how competitive environments would play out and how to scale quickly as the impact of the situation subsides, will be the ones to come back sooner than the others. However, I believe, that the need for unity and collective action as a society or as an industry is more important today than ever before. Only when the entire hospitality industry comes together to reimagine its future, will we be in a position to emerge stronger out of this.
I am very glad to witness such convergence and camaraderie at the industry level already, which gives me great hopes for the future.
The industry has been in an expansion mode, what is your take on that and message?
The entry of more foreign brands in India and their expansion plans changed the dynamic of the industry some decades ago. This resulted in a highly competitive environment, distinctive loyalty programs and a more collaborative way of working with asset owners for go-to-market strategies.
The potential of the market is unbeatable. Even as an 80% domestic market, I believe there are enough expansion opportunities for everyone. The current times will make it even more
important for every player to have a strong domestic business as when travel does resume, it will primarily emerge out of domestic centres such as Goa, Kerala, Shimla, Mussoorie, Manali etc.
Your message for the industry professionals: How best must they efficiently utilize this crisis & lockdown (period) from a review and planning standpoint?
How the hospitality industry will shape in future will be defined in large parts by how we as professionals and our brands rethink how to address consumer needs arising out of these times. How can we make guests feel safe to travel again? How do we ensure flexibility for customers to change their plans? How do we use technology to predict behaviour and enhance loyalty? These are important questions to ask today so that we are prepared to serve and thrive in the next phase.
In these difficult times, it is imperative that the hotels across the globe remember how they have overcome a range of past crises or natural disasters such as the SARS outbreak or acts of terrorism. Hotels must efficiently utilize this time to develop models that will place sustainability, safety, hygiene and technology at the heart of their business. As guest behaviours and needs evolve and bring permanent changes to business environments, we have to be prepared to exceed their expectations.
What steps do you suggest for the industry's recovery and on what horizon?
The path to recovery has to be two-pronged; business-led, and government-led. I believe that effective recovery is only possible when businesses innovate while being supported by policy and relief measures by the government.
On the business side –
* The industry should move to more stringent hygiene practices across food and beverage, housekeeping etc. Health screenings of employees and guest should be conducted more regularly to ensure health and safety in the post-COVID-19 world.
* Increased consciousness about managing food waste must be enforced zero waste practices used in the kitchen. Shorter menus and frequently changing menus should be implemented
* Technology should take the front stage to provide solutions such as cellular phones, non-touch solutions especially in public areas
On the government front, we have requested for relief on few key areas –
* Deferment of all statutory liabilities including EMI’s to a minimum of 9-12 months at centre, state and municipal levels;
* Subsidize employment for 3-6 months by government contribution per employee of 50% of the salary
* Lease, license, rentals and excise fees as well as property taxes to be suspended effective March 11, till the end of COVID-19 period
* Enable GST collected to be used as working capital for 6 months; and finally
* Utility costs like electricity to be charged on actuals versus the load
Your thoughts and advice on how should the industry be promoted post-COVID crisis?
As a major contributor to country’s GDP and employment, hospitality remains a strong pillar of the country’s economic backbone. Today, we must all come together to contribute to the communities we operate in. Each contribution is vital for the nation. Our individual efforts will make our voices even stronger and help us get better attention as an industry. In this fight against COVID-19, our outreach to our communities will keep us all relevant and alive in the minds of the guests and win their loyalty for a lifetime.
Any other pearls of wisdom to cheer up the industry? Share some positive pointers for better times ahead.
Besides the necessary actions that are required to mitigate the impact of COVID-19 pandemic on the business, society needs compassion in these difficult times. Brands and individuals who have influence over the society must come forward to share a message of solidarity, hope and harmony. We need to show more compassion towards our employees.
In the past few weeks, the hospitality industry worldwide came together to show solidarity and continuous support for its guests, employees and community by lighting up their hotel facades. Such initiatives will help drive positive sentiment in such tough times and keep brands connected with their consumers.
Anything that we may have missed but needs to be addressed?
Many hotels and brands have come forward to serve medical professionals, underprivileged and other essential service staff by providing them with a roof over their heads or offering their hotels as a quarantine facility. I am proud of our hospitality values and the talent we deploy across this industry, for rising above their call of duty each time to provide selfless service to the society at large.
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