Category Archives: Hotels

Kerrie Hannaford, Vice President Commercial, Accor (India & South Asia), says that hotels should work along with travel agents as they are experts in packaging the right products, and together they shall strive towards offering a value proposition and unique experiences to customers. Speaking at the 2nd TravTalk Digital Conclave, she said, “What we need to do collectively, with our consultants, is to become absolute experts in offering something unique and bespoke. There must be those ‘surprise & delight’ moments for our customers. The perception of value for money is going to be crucial. It is also important to know what unique experiences we can give to consumers, whether they are from the same city or have travelled from another end of the country. How the travel agent community helps us to establish that uniqueness is important, so that we can sell something to a consumer. As we step towards that level of recovery, that’s what people are going to want. They want to be able to ‘feel’ the value and it doesn’t matter whether it is a $50 hotel or a $100 hotel. They only want to ensure if they are getting that connectedness, that personalisation and as an industry, we need to come together and build that confidence for consumers.”

As per HVS revised estimates, RevPARs in the organised hotels segment are expected to decline by 58% in 2020 due to COVID-19 shock. Mandeep Lamba, President- South Asia, HVS ANAROCK, says, “The industry has not witnessed such an unprecedented decline in RevPARs in the last two decades, since HVS has been recording this data. We should now use the learning from this disruption and plan for the new realities beyond COVID-19, keeping in mind that we need to better prepare ourselves for future events of a similar or even more vicious impact.”

Boutique advisory and analytics firm VIDEC has launched a Global Travel Staffing Barometer, an online resource to monitor the impact of COVID-19 coronavirus on the travel, tourism and hospitality industry. The free-to-use tracker offers industry insights on the state of terminations, furloughs and pay-cuts, across industry categories and countries, collated from various sources and updated on daily basis. Virendra Jain, Cofounder and CEO, VIDEC, says, “The travel industry is crumbling before our eyes with more than half a million lay-offs in less than a month. Amid the global spread of the pandemic, companies of all shapes and sizes – from the billion-dollar valued to start-ups – are trimming costs, disbanding, and letting go off their most precious asset, the workforce. The Global Travel Staffing Barometer quantifies the discharged staff and aims to become the central hub for tracking the loss of human resources, and in time offer the first glimpses for the road to recovery for the travel industry.” According to this tracker, more than 500,000 workers in the travel, tourism and hospitality industries have been furloughed in the last three weeks.

Taking measures to mitigate COVID-19 impacts on the industry, the Rajasthan Government has extended a helping hand to hotels and tour operators registered in the State. According to an order by the state government, it has been decided to reimburse State Tax due and deposited by hotels and tour operators registered under Rajasthan Goods and Services Tax Act, 2017. The order for a reimbursement of State Tax due and deposited to hotels and tour operators will come into effect from April 1 and will remain in force till June 30. ‘State Tax due and deposited’ means the amount of State Tax (SGST) paid through debit in the electronic cash ledger account maintained by the enterprise after complete utilisation of the available amount of input tax credit of the SGST and Integrated Goods & Services Tax (IGST). This order will be applicable for taxable persons registered under the category of hotels, heritage hotels, resorts and tour operators. However, it will not cover stand-alone restaurants and clubs. Beneficiaries will be entitled for reimbursement of State Tax due and deposited in the operative period in the manner as may be prescribed, provided no reimbursement under this order is available for SGST to be leviable and paid on rental or leasing services, including own or leased non-residential property.

The Indian hotels sector has come to a standstill in the last one month, with most of the hotels partially or completely shut. HVS has revised previous estimates of the overall revenue loss that the industry will face in 2020. The overall revenue of the Indian hotels sector is expected to decline by approximately INR 90,000 cr in 2020, reflecting an erosion of 57% compared to last year. RevPARs in the organized segment are expected to decline by approximately 58%. Occupancy is expected to decline by 31.6 per cent. In the organised sector the loss is expected to be INR 40,309 cr; in the semi organised sector the loss is expected to be INR 8,379 cr and in the unorganised sector it is expected to be INR 41,126 cr. The source for the above data is HVS Research as on 17 April 2020. The industry has not witnessed such an unprecedented decline in RevPARs in the last 2 decades, since HVS has been recording this data. The unorganised segment, which is 10 times the size of the organized segment, is also anticipated to witness a similar quantum of decline. COVID-19 is a disruption that nobody anticipated, but it is now time to use the learnings from this disruption and plan for the new realities beyond COVD-19

In a bid to analyse the impact of the Covid-19 crisis on staff salaries across the industry, TravTalk has initiated the ‘Travel and Tourism Salary Survey 2020’. The 2-minute survey is anonymous can be taken by clicking on https://www.surveymonkey.com/r/3WP3JHM. Share your inputs without having to reveal your name or email. The survey would gauge how every sector is dealing with the crisis and possibly trigger discussions on best employment practices in the industry.

Going by a recent report from JLL, more than 60 per cent of organised hotels in India have already shut and several others are operational with single-digit occupancies. The report also estimates that at least 30 per cent of hotel and hospitality industry revenue could be impacted if the situation doesn’t improve by the end of June 2020. Industry estimates indicate that in India, branded and organised hotels annual revenue is INR 38,000 crore (US$ 5 bn). Corporate businesses will be left with less money to spend on travel, lodging and entertainment. Behavioural changes will lead to reduction in socialising, which in turn will impact F&B in hotels. All this will impact GOPs and further reduce yields to hotel owners.

Kerrie Hannaford, Vice President Commercial, Accor India & South Asia during the 2nd TravTalk Digital Conclave said that after the COVID-19 crisis is over, hotels will have to change how they function. “We will be coming out with new standard operating procedures (SOPs) wherein a health certificate will be needed by hotels. The hotels need to work closely with the travel agents, who are the source on which our consumers can rely to get information. Anyone who engages with the consumer needs to have a certificate of health. That’s our priority. The idea is to build consumer confidence, allowing them to check-in without any fear,” she added.

Showing the way forward, speaking at the 2nd session of the second Digital Conclave held by TravTalk, Arjun Sharma, Chairman, Select Group, said, “My suggestion to travel agents is to focus on packaging experiences, experiential travel can also be a luxury. Travel agents need to first build their database and then identify the potential clients and then create packages for them.” He also added that travel will not stop, but it will just take some time for it to build up again.

According to an HVS report, the overall revenue of the Indian hotel sector is set to decline by anywhere between $8.85 billion and $10 billion this year, reflecting an erosion of 39-45 per cent compared to the previous year. The report also shows that besides actual business loss, hotel owners will also incur losses due to fixed operating expenses, debt repayments, interest payments and several other compliances required to be undertaken. It is important to note that the magnitude of the impact can change drastically if the outbreak is not contained immediately. In such an event, these scenarios will turn invalid.