The most volatile commodity and the most important element that shapes the future will be confidence.
After two years of gloom and despair, for the tourism and hospitality industry, April came with a fresh wind of hope, not like the “crueldest month” as Eliot had said. As many parts of the country celebrated and ushered in the new year, emerging trends brought joy and good news.
According to JLL’s momentum report, revenue per available room (RevPAR) grew by 100.3% year-over-year (YoY) – a remarkable recovery from the reported decline in l national average hotel occupancy of 48%, the average daily rate (ADR) drop of 34% and RevPAR of 66% in fiscal year 2021. Global hotel data analytics agency STR has been cited as “India’s hospitality industry eclipsed the pre-pandemic comparison in terms of occupancy and average daily rate (ADR) for three consecutive days in the second week of April. Domestic air travel is reported to have started growing again to reach 10.5 million in April – a year of growth of 83% and only 5% less than the pre-Covid19 level.In fact, the same report also indicates that international passenger traffic for Indian carriers has experienced an increase of 185 m, exceeding even the level before Covid19. The combined effect of all these developments, if sustained, should boost the travel and hospitality sector sooner and stronger than expected a few months ago.
Such a time of good news should however also be a time of reflection on the lessons learned during the bad times and also of discussions on the tasks for both industry and government on the way forward. We indeed live in times of uncertainty and such constant worry about the future means that the industry cannot take anything for granted. The industry must be attentive to the slightest wind of change in the atmosphere. For example, in an interesting article about the erosion of “third-party cookies” – from Google, Apple etc. – Kurt Weinsheimer of Sojern says that for hotels, eliminating third-party cookies can seem daunting. But vigilant management can turn it into an opportunity to “build more authentic relationships with guests using less intrusive methods…enabling hotels to move beyond antiquated techniques to create a personalized experience that inspires travelers to Reserve”.
The most volatile commodity and the most important element that shapes the future will be confidence. Confidence has certainly increased, helped by intensive vaccination and increased public awareness and safety consciousness. Yet uncertainty persists. Shanghai, for example, is not only an enigma but also a symbol of doubts, suspicion and fear of uncertainty.
The primary role and place of the hotel industry in the national economy is based, among other things, on its ability to create jobs. Covid19 has taken away, as the Minister of Tourism informed Parliament, a staggering 2.1 crores of jobs. Mahesh Vyas, Managing Director and CEO of the Center for Monitoring Indian Economy (CMIE), reportedly said that of India’s total labor force of 435 million people in 2021-22, 33 million (or 7.5%) were unemployed. It is logical and necessary for government policy to promote the job creation potential of the hospitality industry. A recent report attributed to Naukri.com indicates that 80% of job demand came from the hospitality industry. It is well known that an old government survey established – and it may still be valid – that the employment multiplier effect in hospitality is four to five times greater than in manufacturing, agriculture or transports.
The industry will have to continuously juggle in the future between the use of technology, digitization, the creation of quality jobs and the qualification of the workforce. The bottom line, of course, is productivity and revenue.
In a ground-breaking event, the President of the United Nations General Assembly recently convened a debate on the theme “Putting sustainable and resilient tourism at the heart of an inclusive recovery”. This concern for sustainable and responsible tourism has been the most overwhelming outcome of the Covid19 experience and the hospitality industry will need to take a leadership role in future travel. It is fitting that HAI has partnered with the World Travel & Tourism Council (WTTC) to promote the concept of the Hotel Sustainability Basics initiative to its member hotels. This initiative recognizes a set of criteria or benchmarks for sustainable practices that all hotels must commit to, adopt and implement. But more than acceptance of criteria, sustainability should be the industry’s way of life and raison d’être. The good examples set by industry leaders should trickle down to all sections.
There is also a lot of introspection to be done at the government level. It is undeniable that between recognizing tourism as a pillar of development and giving it its full place in politics, there is a big gap. Government policies and practices should be more constructive to support its central role in job creation and inclusive growth. Why was it that when all activities were blocked and revenues were zero, the industry had to run from pillar to post to obtain legal contributions, fixed charges on electricity, etc.? exempt or deferred? When there was no capacity to pay, due to their compliance with state standards, why would industry and especially vulnerable SMEs not benefit from automatic relief from the burden of payment? interest or repayment of loans? Couldn’t some of those 2.1 million jobs have been saved if the government had come forward to hold the hand of employers who were trying to keep the jobs?
Time may ease the industry’s pain over the past two unprecedented years, but while the foundations for the future are to be strong, the lessons must not be forgotten. The future – although uncertain – is what we look forward to with optimism.
Industry and government, in an atmosphere of strong collaborative partnership, should continuously discuss, debate and design sure ways forward and help the hospitality industry develop to its full potential and contribute to inclusive growth . Disaster management is not just about physical relief. More relevant is the prevention of social disasters that result from failure to take timely corrective action. What Albert Einstein said in a different context is now so relevant to all stakeholders: “Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.
AUTHOR BIO: MP Bezbaruah is Secretary General of Hotel Association of India