Since the outbreak of the pandemic, it has been a difficult time for most industries, especially hospitality. Businesses across various sectors have been struggling to survive and the second wave only added to its woes, both economically as well as emotionally for workers and owners. The hardest hit has been done to the hospitality industry. However, it has learnt some valuable lessons and is transforming itself to survive. Now that everyone is fearful of the advent of an inevitable third wave, is the hospitality industry ready for it?
Techiexpert team had an exclusive with Siddharth Goenka,
Predictions for Different Categories of Hotels?
According to Statista, In 2019, the market size of the resort and hotel sector worldwide reached 1.21 trillion USD, which is significantly high. There are two types of hotels in the hotel industry-business hotels and leisure hotels. While business hotels share the majority of supply (60% – 70%), the remaining supply is shared by leisure hotels.
There was a huge resurgence in the leisure hotels after the first & second wave, witnessing a revival of sorts before the second wave of the pandemic hit it severely. According to global real estate service firm JLL, during Jan-Mar 2021, India’s hospitality industry observed a fall of 38.7% in Revenue Per Available Room (RevPAR) as compared to Q1 2020, primarily driven by Leisure hotels. Therefore, it is expected that leisure hotels will be able to manage the third wave better, because not only have they experienced a rebound but also they have more preparedness and confidence.
However, business hotels, which saw only limited resurgence after the first wave, are still struggling after the second wave. It is expected that many business hotels around city centres may permanently shut down, as available supply will reduce.
Return of Hospitality Industry
To survive in the present situation, many of the hospitality chains are going all out while trying to keep costs under control. With the ongoing situation, both the segments will need to re-emerge with a renewed or revised plan. There is a need for the hotels to view the situation from a larger microscope i.e. to explore how best they can sustain their businesses. Following are some important aspects that hotels need to focus on:
- Technology is the key
Technology will play a key role in the recovery of the hospitality industry. Efficiency, Technology, & Automation are the need of the hour. Hotels of both segments will need to adopt new-age technologies and automate various operations to bring efficiency as well as ensure safety of guests. More focus is required on technology, automation and efficiency as core USPs while running their hotels, selling their hotels, and providing safe & reliable guest satisfaction.
From taking a reservation, checking in a guest, providing in-house services to the guest, and post checkout services, all such tasks will see a greater advent of AI, AR, VR and device based automation, that will ensure hotels stay efficient, and customers stay safe.
- Decline in the Manpower
There is a high demand to reduce staff to room ratios to ensure profitability, efficiency and cost savings. Tracking manpower performance in different and multi-skilling of existing staff will be critical points in the recovery process of hotels. Hence, using machines instead of manpower is the requirement of the future.
- Online Channels for Sales
There will be an increase in the usage of cloud-based integrated Property Management Systems and dynamic pricing algorithms to maximize revenues by the hotels. Features like online distribution, pricing management, and reservation management will all be brought under one umbrella. All of this will not only reduce the need for day to day management, but will also result in maximizing revenues due to use of AI & Data Analytics.
Undoubtedly, the hospitality industry is adversely affected by the pandemic, and a lot needs to change before the industry can find its feet again. Currently, business planning and strategizing is in a volatile state as no one can predict what could happen next. Even the government has ignored the hospitality industry, even though it’s a huge source of employment and has a multiplier effect on the economy. The third wave can potentially be a final nail in the coffin for business hotels, where the last hope for survival will give way to complete restructuring.
Siddharth Goenka, Founder & CEO, Aiosell Technologies