#ReviveRebuild | Today’s Traveller initiative “Revive and Rebuild the Hospitality industry” invites M P Bezbaruah, Sec. General, Hotel Association of India, to share insights on new challenges in the wake of the second Covid wave and mapping a strategic way forward …
Hotel Association of India
Today’s Traveller : How do you assess the current situation?
M P Bezbaruah: The current situation, so far as tourism and hospitality is concerned, is a continuation of the travails of last one year, a situation of cumulative misery in terms of business and income and jobs lost.
The early part was marked by the tenacity of the hospitality sector trying to hold on during unprecedented adversity, without any support from the government.
The second wave of the pandemic resulting in reimposed restrictions for long periods has pushed most of the industry to what I can describe as, a fight for survival.
Even in the very early stages a study by Mckinsey had anticipated business contraction to the extent of 70%. Subsequently, RBI has accepted that this sector is one of the most impacted ones. In the initial stages, HAI had represented that the revenue loss was around Rs 90,000 cr for the year and the organized part of the industry-which is only about 10% of the total-had debt burden of Rs 45000 Cr.
With the impact of the severe second wave, the apprehension is that more than 40% of hotels have shut or are on the brink of closure and almost 70% of the jobs are in danger directly within the sector and thousands more in hotel-related support sectors.
Today’s Traveller : Were you prepared for a second Covid wave scenario and the likelihood of a further setback?
M P Bezbaruah : The Hospitality sector was aware of the uncertainty of the situation. It had adopted all the SOPs, — safety, hygiene, social distancing- had made innovations and adjustments in operations necessary to go on in the new environment, but the intensity of the second wave and the resultant shock was not expected.
By the beginning of the new year as the Secretary MOT said, there was a ray of hope and I had captioned one of my articles with that heading. Resorts and high-end hotels near metro cities had seen robust bookings. The trends were clear— perception about health and hygiene of the service providers and customers confidence on these issues was going to determine their choices.
Nature, open-air and rural settings were the preferred choices. To sum up, the industry was prepared to meet the new norms of operation as mandated by the SOPs and needed in the circumstances but in operational areas relating to liquidity problems, payment of fixed cost and dues, payroll etc. the long impact of Corona was making them very vulnerable, and the second wave made it worse. Industry on its own had no means for preparing to meet the fallout.
There is fear of a third wave. I am afraid most of the industry will not have the capacity to withstand it on their own unless there is substantive support from the government.
Today’s Traveller : What challenges are likely to take shape?
M P Bezbaruah: I see the challenges in two parts. First is the challenge of survival. It is a challenge of managing continually mounting cost, both fixed and payroll, increasing the debt burden with almost non-existent revenue. The challenge is of matching humanitarian concern to continue retaining staff with business not making it viable to do so.
The second challenge is of adjusting to the business in the new norms after covid. Trust, it has been said will be the new currency in the tourism business. This trust will be in a capacity to build traveller confidence about heath safety, hygiene etc. through innovative measures, digital transformation and improving service quality through trained manpower.
Such changes in operations, like social distancing in restaurants, will reduce capacity. They will also have a cost. At the same time, it is likely that as tourism starts slowly there will be keen competition to get market share and prices may be compromised.
As UNWTO has pointed out, in the future concern for sustainability will not be an option—it will be a necessity. Consumers will judge establishments more and more on their adherence to sustainable norms in operations. The recent meeting of the G20 has already talked about transiting to green tourism and travel economy. The primary challenge for the hospitality industry in a fast-changing scenario will be its capacity to be at the forefront of ‘change’.
Today’s Traveller : Way forward with strategies to rebuild tourism and hospitality industry.
M P Bezbaruah: UNWTO has assessed that travel and tourism have gone back in time by 30 years. The tourism experts have also opined that international tourism is unlikely to get back to normal before 2023. The future strategy will have to be devised and designed keeping this overall constraint in the picture. Domestic tourism and to some extent business travel when the economy picks up, are expected to sustain the hospitality industry.
There is a great lot to be done—systematically, continuously and in a planned manner. Most of the work will need joint efforts of the government and the industry and therefore the first requirement is to establish a strong, pragmatic mechanism for public, private partnership. This could be achieved by creating a Task Force with both the government and private sector representatives.
The first strategy of course will be to enable the industry to find its feet. The Task Force should quickly draw up and implement a tourism and hospitality sector specific recovery plan. It should reflect the ground realities and ways to meet those realities.
It should provide relief on the issues already identified by the industry as mentioned above— restructuring of loans, a moratorium on existing loans, soft credit for restarting business, waiver of statutory dues for the period of lockdown, just to mention a few.
At this moment everyone is aware that this sector is most affected by the pandemic. But there is no assessment of the impact on business, jobs and loss of livelihood of people indirectly dependent on the hospitality sector. If not already undertaken, it is essential to quickly make such an assessment. Future solutions will emerge from an understanding of the actual data of the ground realities.
It looks clear that domestic tourism will have to provide the initial push for recovery of tourism and hospitality business. Government will have to primarily promote domestic tourism as is being done through “Dekho Apna Desh” campaign.
But it will have to expand to cover wider destinations including rural tourism. Sustainable destination development will be the key requirement in the immediate future. “Responsible Tourism” will be the core component of such development.
The hospitality industry in its turn should show leadership in innovating ways for strictly implementing the government SOPs on health and hygiene, develop sustainable practices, innovate on increasing productivity and cutting cost to attract domestic tourism.
(The author, M P Bezbaruah, Sec. General, Hotel Association of India, is also Permanent Representative (Hon.), UN-WTO, Former Member, North Eastern Council (in the rank of MOS), Former Secretary, Ministry of Tourism, Former Chairman, PATA, Former Minister (Economic) HCI, London.)
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