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Steve Borgia, CMD, INDeco Leisure Hotels, says that by cutting costs and getting local guests & weddings at hotels, they have been able to make a profit in June 2020.
In the time when businesses are struggling to survive or even exist, INDeco Leisure Hotels, have managed to make profit in the month of June. However, according to Steve Borgia, it wasn’t that the lockdown didn’t hit them hard. “We were amidst the third failed tourism season and we have not seen a hit like this in the last several decades. We had to grope with issues one after the another. Shutting down the hotel was sad and strange, with packing staff home, paying their salaries and settling all the local suppliers. Finding a committed hands-on team to stay back to guard, maintain was a challenge, including feeding all with the markets shut. From 120 employees, we ran our hotels with 15 people. We needed to look at survival,” he opines.
Claiming that like earlier times, the business had to be owner driven, he says, “We decided to create a team with multiskilled and responsible, low cost staff. We focused on continuous visible cost control initiatives and increasing productivity. The main idea was to enhance tourist experiences, while abiding state and country laws. We chose to deliver back to basic products. April and May were just to earn our salaries. June was for making small profits, and July was to get into normal grind.
We offered unimaginable and perceivable discounts in tariff to attract the young and risk takers. Crowded city apartment dwellers wanted to escape to safe spaces. We reached out to them for long stays. We conceived ‘staycation’, promoted sustainable and responsible products that are perceived as corona safe. The entire families moved in.” A major move was to reach out to the local population.
“‘Love thy neighbour’ is a very special product for our immediate neighbourhood, which we never focused on earlier. It provided rooms and take away food at enviable discounts. In the ‘Pay as you like’ programme, we invited friends, our client base and the elite locals to walk in, check-in, choose their room and enjoy our hospitality. Staff was trained to enthral them and excel expectations. At check out, the guests paid whatever they liked. We were ready to receive even nothing. However, the minimum we received in this programme was ` 2,500 and surprisingly in some cases, we received more than the published tariff, which was an achievement. Through ‘long stays’, we offered corona safe programmes for senior citizens. We connected with NRIs staying across the world and offered to take safe, appropriate care of their parents back home in Tamil Nadu,” he shares.
A timely move was to go for the quick to yield farm products, which was a hobby programme that greened the entire hotel campus with quick to yield vegetables and fruits. “From month two, we had enough produce for in-house staff. INDeco Hotels Swamimalai always produced a lot of fruits and vegetables inside the hotel estate and purchased the balance from the villages around,” informs Borgia.
Stressing that all these measures created revenue opportunities, he adds, “Not very enviable though, but our continuous cost control is what helped us score small time profits. This coupled with 50 pax corona period limited guest wedding ceremonies and photo shoots gave us the real comfort and helped us score profits in June.”
J.K Mohanty, CMD, Swosti Group, has said that they have been in touch with the government at all levels to represent the plight of the hospitality sector. “On behalf of hotel industry and tourism sector, we are continuously interacting/following-up with both Central as well as state governments, highlighting various issues that are being faced by the hotel industry during this COVID pandemic. Although both the governments are extending some relaxations in terms of EMI payments to the banks, bar license fees, etc., we are hopeful that the government would declare a good relief package for the hotel industry for its survival,” he informs.
When asked about the demands they have raised, he shares, “Our demands to both the governments are deferment of bank loans and interest free loan; appealing for restructuring of loan having outstanding more than ` 25 crores; waiver of BMC holding tax; waiver of bar licence fee; exemption of ground water fee; waiver of minimum demand load of electricity and payment of electricity bill on actual demand load; financial assistance for payment of salary / wages, ESIC etc.; special relief package for the travel & hotel industry for revival etc.”
Talking about the impact on his own business, Mohanty shared that like every hotel in the country, Swosti Group, is going through a very bad phase with zero occupancy and zero income since end of March 2020. “All our hotels and resorts have been closed. During this period the hotel industry is facing serious problems in paying salary/wages, ESIC, paying bank loan, interest, overdrafts, holding tax / bar licence fee / electricity fee, ground water fee etc.,” he says.
Mohanty believes that the hotel and tourism industry will take a long time to come back to its normal levels.