Why Hospitality Is Bullish On The Post-Pandemic Era

Hospitality has always been an integral part of In­dian tradition and culture. Owing to this heritage, the Indian hospitality industry has become one of the key drivers of growth of the services sector. It plays a significant role in generating employment and travel opportunities. 

The growth of travel and tourism in the country is a reflection of the progress of India. According to WTTC, in 2019, India ranked tenth among 185 countries in terms of contribution of travel and tourism to­wards the GDP of the country. 

Pummeled by the Pandemic

The onset of the coronavirus pandemic and the nationwide lockdown that followed, however, raised concerns about the sec­tor’s survival. Imposition of national and international travel restrictions through the year also dealt a severe blow to the industry. The pandemic forced people to work from home, cancel their travel plans and main­tain social distancing. 

As a consequence, the tourism industry is estimated to face a revenue loss to the tune of Rs 1.25 trillion. The figures correspond to a 40 per cent fall in revenue over the previ­ous year’s figures, as per a study by CARE Rating. 

Massive Job Losses

Organised, semi-organised and unorgan­ised operators in the hospitality sector, had to bear the brunt of the pandemic over the past six months as a result of high fixed costs, capital intensive operations, unfa­vourable debt service terms, high uncertainty of revenue and comparatively large service teams. The Indian hospitality and tourism industry is looking at a potential job loss of around 38 million, which is 70 per cent of the total workforce, as per a re­port by KPMG.

Unconventional Innovations

Hoteliers understand that the road to re­covery will be tough. However, the spirit to explore the unconventional innovations in service modules and growth models adopt­ed by hotel chains have proven to yield bet­ter results for the sector across the country. The new focus is all about carving a niche for brands in the industry and providing unique and safe experiences for customers. 

The remote work culture has sparked a new trend of booking long stays, which has worked wonders for the hospitality industry and is helping in putting it back on its feet. Offbeat destinations have been gaining a lot of traction compared to previously popular locales. This has enabled hotel chains to shift their focus towards remote places and expand their footprint in offbeat locations around the major tourist destinations that are more tranquil and less crowded. 

Revenge Travel 

Many leading hotel chains have reported a sudden increase in bookings around or near the driving distance of key vacation destinations. This is largely being attributed to the trend of ‘revenge travel’, leading to more business in smaller towns, especially in states with less Covid-19 cases. People are mostly looking for a break at motorable distances from their homes. 

Luxury Weddings 

Another trend that has made its round dur­ing the post lockdown times is the demand for mid-scale and luxury hotels for wed­dings. With the curb on social gatherings, Indian weddings have become leaner. This has led people to opt for trusted names in the hospitality sector and also created a higher preference for luxury weddings. 

People have been flocking towards es­tablished, good and safe hotels to make advance bookings for their wedding cer­emonies and the enthusiasm among guests is very refreshing. The con­cerns for safety and hygiene is also a major cause driving footfall towards luxury ho­tels as the quality of services are much better and there are larger spaces for social distancing. 

Key Challenges 

Today, the key challenges for the sector include managing cash flows to meet financial and statuary liabilities, re­covery of operational losses, ensuring hygiene and safety for guests, sustaining jobs, and strategising the path to revival. 

The hospitality sector is set to go into a complete transformation in the coming years, so hotel players need to quickly adapt themselves to the coming trends. 

A Gradual Recovery 

The sector is now bouncing back to gradual recovery of occupancy with the gradual in­crease in demand, especially in the leisure market with spiked weekend bookings. The average daily rate and occupancy rates are likely to increase exponentially by the year 2022, as the sector will adapt to evolving demand and preference of guests. 

While domestic travel is picking up, work-related travel will still take time to pull around in the short term. We are wit­nessing a huge demand in business and leisure travel as well as wedding and out­door events across the mid-range to luxury categories. 

We are hoping for a substantial recovery if the vaccine distribution is made easier and its reach is better for the masses. We also ex­pect a boost in investment and surge in oc­cupancies which will lead to rising demand in the travel and hospitality industry.