‘In the coming first year, I see destruction of demand,’ forecasts Lemon Tree Hotels CMD, Patu Keswani

With a deadly pandemic hovering over the world, the focus of every government has shifted to tackling it and finding a cure for it. Speaking at the BW HOTELIER Webinar: Breaking The Pandemic 'Getting Indian Hospitality Back... Hear The Leaders', Lemon Tree Hotels Chairman and Managing Director, Patu Keswani, pointed out that for the first time in history, every government, pharmaceutical company and laboratory is focused on finding a cure for the novel coronavirus. He was optimistic that a cure would be available within the coming two to two-and-a-half years with the kind of technology and knowledge humans possess today.

Keswani, known for his entrepreneurial skills, said, “We, as hoteliers, can’t depend on government budgets. The Indian government is known to do ‘too little, too late’. And if we go by that premise, we can try our very best but we should expect too little.”

“In the coming first year, I see destruction of demand and the next year ‒ revival of domestic demand to a small extent. But worryingly, I see that if you don’t have a liquidity quotient, a lot of demand will get destroyed, which means a lot of hotels will shut down because of lack of support from the government. And this will lead to long-term supply destruction,” he added.

Referring to the 14th and 17th century incidents of pandemics, he pointed out that a third of humanity had been wiped out in the plagues. “Coming to the latest, the Spanish flu which occurred in the 1920s during the World War, out of 1.5 billion people in the world, half a billion got infected, with 50 million casualties and India itself had 10 million deaths,” Keswani reminded the audience.

“If I put it in the current context, 2.5 billion will get infected and 250 million will die. It is a question of scale and how we react. In my personal view, we have reacted because of the instant communication systems that we have ‒ but I would like to remind you that humanity has always overcome,” he stated.

At the recent BW Hotelier Webinar, Keswani emphasised that the pandemic is a wave and that till there is a cure, people will be afraid to travel. “Because of this fear of death, there will be no travel or marginal travel. There will be utter demand destruction at least till the end of this calendar year. Till then we need to do things to drop costs.”

Lemon Tree Hotels has decided to not lay off any associate but take massive salary cuts at the leader level and to make timely payments to MSME vendors of the group. Keswani has reportedly decided not to take salary for three months and other leaders of his team too have taken pay cuts of 50 per cent to 65 per cent.

Keswani preferred to look at the future in an optimistic and positive manner. He felt that a cure for the novel coronavirus would emerge in the coming year and that a cure would be known and domestic travel would resume after that. He said his only concern was a constraint on airlines which may prevent them from resuming services.

“Three years from now, once the world is vaccinated, I am predicting that social distancing will go out of the window and we will revert to normal, just like what happened after the Spanish flu. But in the process, we must learn to retweak the cost ratios that we have got and use them successfully to be more efficient,” Keswani said.