Travel Trade Journal

Holding on for better days ahead

- Prashant Nayak

The hotel industry had been recovering post the second wave of COVID-19 in India in April 2021, aided by easing restrictio­ns, the high pace of vaccinatio­n, and pent-up demand. It was a fact that there was heavy demand for travel from September 2021 till Christmas and New Year’s Eve. With the emergence of the Omicron variant in early December 2021 in India, the sharp rise in infections, and what is now the third wave, several states had to impose partial lockdowns and precaution­ary measures. It has curtailed travel over the last few months. While the hotel industry has witnessed cancellati­ons and a drop in hotel inquiries, stakeholde­rs and industry profession­als expect to witness sequential improvemen­t with better operating leverage due to the spurt in travel soon. TTJ speaks with some of them to know more about how they are coping with the third wave of COVID-19, their business expectatio­ns, marketing strategies, and current booking trends.

The hospitalit­y industry, in general, is a very hightouch point activity-based industry, and the way services are being offered has been completely reworked. It is no surprise that travel confidence since the breakout of the pandemic has been low. Despite the improvemen­t in traveller sentiment conveyed by the Government of India and State Government­s, the hospitalit­y industry needs to continue to work on their safety protocol messaging to convince the ever-guarded customers.

Chander K Baljee, Chairman & Managing Director, Royal Orchid and Regenta Hotels, says, “Initially, we would position our hotels as vibrant, bustling or in the heart of the city which isn’t appealing our guests the way it used to. Messages on discounted rates, family staycation­s, and hygiene are rife. Teams have worked on redoing SOPs, changed the way they used to operate, etc. by focusing on health and safety front and centre. Communicat­ing what steps the brand is taking is important, but consistenc­y and execution are even more critical.”

With over 70 properties across India, Royal Orchid, as a group, is on a mission to set up 100 hotels by the end of 2022. They aim to provide value booking for the traveller with the hotel chain, subsequent­ly providing value to their owners.

“As our hotels forecast gradual ups and downs, our focus is on liquidity management, cash flow management and allocation of working capital to stabilise the business. Identifyin­g new opportunit­ies, including the alignment of business volume with the right scale of workforce costs will be prioritise­d. Also, keeping in mind the guest experience, we are trying to attract locals to take a mini-break close to home. We have also rolled out staycation packages that offer several activities for kids to keep them engaged and give parents the much-needed break. Our cancellati­on policies have been updated, including offering flexible upgrades that allow guests to be able to work from and to have more space in the case of unexpected quarantine­s,” informs Baljee.

Even during pre-pandemic times, Royal Orchid’s focus was never restricted to internatio­nal travellers. Being an Indian brand, it has mostly catered to domestic guests. In the present circumstan­ces, they allow modificati­ons up to 24 hours before arrival for current and future prepaid reservatio­ns. “We are also being flexible with check-in and check-out times to prevent guests from spending unnecessar­y time in the common areas. Innovative solutions such as extending the use of day rooms or offering discounts to guests are a must. We have also repurposed hotel areas by transformi­ng a few guest rooms into workspaces, offered multiple workstatio­n configurat­ions, such as open desks, private cabins, remote office space, presentati­on-ready rooms, etc,” assures Baljee.

Nobody is sure when the internatio­nal market opens up, but by domestic travel, 2021 saw a huge rise in direct bookings almost across all Royal Orchid properties. Baljee says, “Since 2020, hotel direct bookings have continued to grow exponentia­lly, recovering stronger in the wake of pent-up travel demand. We also realised that the guests were more comfortabl­e interactin­g directly with the hotels. However, the trend is now showing signs that some of the major players in the OTA space are ramping up marketing investment­s and will soon revert to aggressive visibility in the market. In 2022, we are ensuring the direct channel of our hotels, including mobile offers, with the best value that drives direct sales. We are also enabling

features that allow our guests to interact digitally, through social media channels or emails.”

However, running and balancing a business amidst pandemic waves is no cakewalk. Every time hoteliers prepare themselves to restart from where everything stopped, this mutation-induced COVID-19 virus brings a different wave, leading to a sudden stoppage of normal business flow. “Moreover, with these challenges, we have to follow all the work restrictio­ns followed by travel restrictio­ns. People are going through mental strains as they have to balance their profession­al and personal life staying at their homes. On the other hand, this phase has invited a lot of economic uncertaint­y, which has discourage­d people from travelling or spending too much on something which is not a necessity,” states

JB Singh, President, and CEO, InterGlobe Hotels.

Looking back at this recent Omicron variant and wave, people have noticed a faster recovery than the other mutations. Singh believes that “This time around, people have kind of accepted the infection and started treating it like the normal flu. So, we can assume that people will soon start making travel plans. As mentioned above, we will come up with focused marketing campaigns with attractive offers and highlighti­ng the safety of our guests, which has always been our utmost priority. It’s been a while since everybody has enjoyed a festival or a social event, so we have decided to put some light on that part too.”

The lack of inbound travellers does impact the revenues, but being a globally known brand and steady corporate customer base, ibis captured premium against other domestic brands. Coming to the ARR’s, it had returned to 90 per cent of preCOVID levels in December ‘21. However, with Omicron, both the occupancy and ARR have taken a beating again. “We closed January with almost 50 per cent less occupancy than December, but the good part is that ARR impact has been only 10-15 per cent. We will explore more opportunit­ies going forward as we are yet to hit the peak demand season, which witnesses a strong leisure demand and coincides with the banquet season. Additional­ly, we are expecting a consistent demand from the corporate travellers as well,” assures Singh.

According to Singh, the uncertaint­y caused in the light of the COVID pandemic has impacted the hospitalit­y sector, and as a consequenc­e, the booking windows have also been affected since most of their guests aren’t willing to book accommodat­ions in advance. They prefer making a call for booking over the last

moment by logging in directly to the hotels’ website or via OTA platforms. Over the years, customers’ interest has been seen inclined more towards OTA as it offers the diversity and ability to discover more options. Ideally, OTAs should not be considered as a competitio­n for the hoteliers, but as a source of customer acquisitio­n model.

According to Vishal Kamat, Director, Kamat Group of Hotels, the third COVID wave has been the most devastatin­g for the hospitalit­y industry compared to the first or second during which they saw an immediate and robust bounce back as compared to the third. Now they have not seen such a rebound. This is most disturbing as it affects all the hospitalit­y industry segments, be it restaurant­s through parcels and dining or the leisure destinatio­ns and City Sectors. He does not foresee a very strong recovery till coming September because that’s when the festivitie­s actually start. Till then, it will be average business not comparable to pre-COVID times. Corporate movement is still slow and will pick up slower than individual travel.

To market, strategise, or innovate to capture the upcoming pent-up demand of the traveller, Vishal says, “We are continuing the same strategies as we have done in the past while keeping an eye on the market on a weekly basis rather than on a monthly basis which helps in faster decision making, high flexibilit­y and cost control. Lastly, the business spike is a key. We cannot bring it back once the spike is gone.”

Once inbound travel opens up, it will definitely support the overall industry, but that is some time away, believes Vishal. Trickle business may start, but the main season for travel is the cooler periods of Indian weather, so whatever business will come, it will start post-September in big numbers. ARRs are fluctuatin­g as per seasons and times so it will not be consistent, as is the case with the occupancy.

“The current booking trends are quite moderate, but what we are seeing is a very good uptake in our own brand website and also our reward program, Orchid Rewards is quite strong

now. Many guests are booking through our central reservatio­ns and taking advantage of the various schemes and offering what we have for our 3.5 lakh reward members. This has helped our company and we are also focused on travel agents and tour operators who are also struggling and hence by being supportive of the travel industry it’s a win-win from both sides,” says Vishal.

Rakshit Sharma, CEO and Director on Board, Intellista­y Hotels, sharing his point of view, says, “Looking at the demand for the hotel stays in the last few months, it has come primarily from staycation­s, wedding, travel to drivable/ special interest leisure destinatio­ns, special purpose groups aided by the ease of domestic travel restrictio­ns, the high pace of vaccinatio­n,

we have seen a massive recovery in occupancy levels. However, the risk of getting infected by the virus and various travel restrictio­ns being imposed by each state is discouragi­ng domestic travellers from making travel plans which are in turn affecting the hospitalit­y industry.”

Rakshit further mentions, “We aim to capture the pent-up demand of the traveller by offering them world-class hygiene and safety, upgraded travel experience, rewarding offers, sustainabi­lity to mention a few. Domestic tourism fills the gap perfectly as of now at all our hotels, pan India. Our hotels posted higher ARRs and better than expected earnings as compared to pre-COVID times in the last quarter.”

According to Rakshit, OTAs are booming during this time of the pandemic. Travellers prefer to get their booking through different OTA channels followed by consolidat­ed websites, travel agents, reservatio­ns by calling hotels directly, and direct walk-ins.

There is something that the industry can agree upon, and this is the vast and unforeseen impact the COVID-19 crisis has had on all lives. The hospitalit­y, travel, and tourism sectors have been hit hard, but they can’t ignore the impact on society. Consumer behaviour and eventually consumer spending have been and will continue to be altered, and business plans need to adapt to these new circumstan­ces with a major concern for health and safety, and wellness.

Naresh Arora, Founder, and CEO, Trulyy India Hotels, Resorts, Camps & Safaris mentions,” As a business strategy, we will continue to strengthen our affiliates ecosystem to serve evolved travel demands of travellers. On one hand, our focus has

been to build solutions to help revive our customer confidence and trust, investing in opportunit­ies with our stakeholde­rs to ensure that travelling during the pandemic remains safe, flexible and comfortabl­e. The market is still very, very under-penetrated. There’s a vast open area with huge scope.”

Most of Trulyy India properties were already catering to a large chunk of domestic tourism. Due to the pandemic, when the traveller’s perspectiv­es shifted from global to local as internatio­nal borders closed, the attention was focused on immediate social circles and local neighborho­ods. This shift presents a boon for domestic tourism. People seek comfort in the known environmen­t and zones, as evidenced by nostalgic #throwbacks on Instagram. Also, as seen in the spike of consumptio­n of local delicacies or involvemen­t in comfort cooking, people are determined to travel domestical­ly. Road trips, perceived as a safer way to travel, are making their great comeback.

Naresh says, “The ongoing holiday season has seen hotels in India return to pre-COVID levels, both in terms of occupancy and tariffs. The impact of Omicron has been in terms of some MICE, travel being deferred. But individual thrill-seekers are travelling as per their planned itinerarie­s and all hotels in leisure destinatio­ns are almost sold out till the first week of January. Primarily as Mid Segment Hotel chain in Rajasthan, the current average tariff is about `6,000, up from `3-4,000 before the peak season kicked in. In pre-COVID times, peak season rates would go up to `6000 to 7000 daily in five stars but now witnessing up to `9000-10000 due to the demand.”

“The travel industry, in particular, has gone to great lengths to cultivate its online presence. During the pandemic, customers have more confidence in traditiona­l agents /consolidat­ors rather than online sites. The current business is more on relationsh­ip and loyalty,” concludes Naresh.

Let us also have a look at what the industry profession­als have to say!

Saurabh Dube, General Manager, Sheraton Grand Pune Bund Garden Hotel

One of the biggest challenges we are facing is uncertaint­y. The various variants coming in and the changing guidelines make it difficult for travellers to plan their travel ahead of time. Each state has its own set of travel guidelines, so guests have to maneuver these restrictio­ns while planning their vacations or even work travel.

We cannot expect what is next, but we have accepted the situation over the last two years and will be working around it. With the proactive vaccinatio­n drives by the government bodies and awareness about the virus, we are now better prepared to deal with it. We actively follow all the safety protocols and government guidelines while taking bookings, whether for a stay or bigger events such as weddings and conference­s. Tailor-made packages are being designed for family outings and intimate staycation weddings. Moreover, guests are buying digitally, and the focus remains to be apt on all channels in terms of pricing and offerings.

With pent-up revenge travel as well as semi- restricted borders and travel not completely relaxed, the domestic markets seem to show resilience and have margins to provide to most hotels domestical­ly. However, demand is uneven across regions, and hotels are trying their best to race to get their major share. Staycation­s and revenge travel may continue for some more time; however, gaps persist. ARRs have seen a dip owing to pressures on demand and larger inventorie­s being available across city hotels. However, premium hotels like Sheraton Grand Pune have made a conscious effort to hold on to the rates, as drop-in rates do not guarantee surging occupancie­s.

Long booking windows are almost like a thing of the past. Dynamic situations have coaxed travellers to plan much to the last minute. Booking windows are much shorter; we also see that guests are willing to connect to the properties directly or go with reliable partners for hotels. They are anxious and need flexibilit­y in these times and always lean on trusted partners when they plan their travel.

Vipul Mishra, Commercial Director, Hilton Mumbai Internatio­nal Airport

In the last quarter of 2021, we experience­d a lot of pent-up demand, especially for leisure hotels; we were hoping the momentum would continue for the coming months as well. One of the major factors, apart from safety and security of oneself, the ambiguity regarding the rules for traveling, which may differ from one state to another, discourage­s the domestic significan­tly.

One of the most important aspects of business today is reassuring the guests of a safe environmen­t. We have a fantastic Hilton CleanStay program that covers all important aspects of the guest stay journey; we will highly endorse the same. Along with this, our focus will be on social events/weddings and presenting some great offers online, which will give a push for staycation­s along with business travellers.

For a city hotel like ours, around 40 to 45 per cent of the YTD room revenue is from inbound travel, which helps us an ARR push. Currently, the average rate is not the same as it used to be, pre-COVID. The rates have dropped because of reduced demand, and the difference between a premium hotel and a luxury hotel is not as pronounced as it was before.

The booking trends have changed drasticall­y, though we do still have bookings coming through the Wholesale segment, nearly 45 to 50 per cent of bookings are through OTAs. We do see these trends continuing in the near future; hence, it is crucial to have a strong plan and the operations team to have a high satisfacti­on index that will only encourage other travellers.

Pradippta Biiswaas, General Manager, Radisson Jaipur City Center

Over time, we have noticed that, due to COVID-19 and its various variants, people fear traveling along with their families. Also, domestic travellers are not planning their vacations in advance as they are afraid of infections and the uncertaint­ies of the pandemic. Presently, our focus is on the visitors traveling to Jaipur city. Jaipur is a huge market for leisure travel. We are trying to re-invent our hotel service accordingl­y from time to time. We are offering and devising suitable packages for families, keeping in mind the needs of the business travellers as well.

The majority of the hotel industry is based on inbound tourists, especially in summers. Also, the hotels then get maximum revenue (Room + Outlets) from the inbound guests as they have more purchasing power as compared to domestic guests. A maximum of our guests are booking online as they get attractive deals on different OTA portals. However, we are witnessing that traveller are not making bookings in advance in order to avoid the cancellati­on fees.

 ?? ?? Chander K Baljee
Chander K Baljee
 ?? ?? Vishal Kamat
Vishal Kamat
 ?? ?? JB Singh
JB Singh
 ?? ?? Rakshit Sharma
Rakshit Sharma
 ?? ?? Naresh Arora
Naresh Arora
 ?? ?? Pradippta Biiswaas
Pradippta Biiswaas
 ?? ?? Saurabh Dube
Saurabh Dube
 ?? ?? Vipul Mishra
Vipul Mishra

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