Building Resilience in the Face of Covid Crisis

The pandemic has hit humanity at large. It is not just to one specific industry. Despite all technological and scientific advancements, the global medical fraternity, and Governments did not have an immediate response to manage Covid19. It is too early to put a finger on the level of impact or repercussion the hospitality/ Travel & Tourism industry will have – but it is going to be extremely severe. However, when we do emerge from this, there will be many beginnings and changes in ways Guests, people working in the industry, brand custodians and owners will need to adapt and imbibe to survive and flourish. 

In the economic front, once things begin normalise gradually, the focus will be on ways to optimise working capital utilisation in operations and prioritising in areas which make most impact to the hotel. It will be a fair balance between, financial prudence, strengthening the brand, Guest facing priorities, Team member safety amongst others. Scenarios could emerge wherein cash strapped stand-alone hotels are acquired, yet hotels which have a strong and possibly unique Guest facing proposition will survive. On the resourcing front, there could be restructuring to maximise talent allocation and optimise resource costs.  

Guests will have their own set of priorities when they book their stays. They will feel more inclined to Trust brands and hotels which have demonstrated a strong focus on hygiene and cleanliness and have more positive endorsements from fellow travellers on the same. 

India has a strong family-oriented culture, therefore, as a trend, we foresee a few segments of travellers being more popular – staycations, short stay leisure, wellness vacations in small groups and small friends and family group leisure - with entertainment for children being a priority. As large events and weddings and social gatherings will be avoided in the immediate future, aforementioned ways of travel will be a key focus for hotels.     

Finally, we see business changing fundamentally because COVID 19 has highlighted a risk that nobody ever took with this much seriousness. All the crisis before this were more geographical and diversification to a large extent was an insurance. Also, the impact of the crisis before this was never so deep. We feel that this will certainly have the most lasting impact on how companies are structured, and they plan to be more resilient for a similar situation in the future.

The New Business Order

In general, the need for people to travel and see the world and create memories with their cherished ones will not diminish. If anything, it will increase. In the short run this may take time to come but in the medium to long term we see no risk to the hospitality business from the leisure side.

It is likely that Mid-scale and Economy hotels will pick up quicker due to their cost vs profitability, operational efficiencies and focus on rooms and F&B rather than large MICE bookings. The lines between upper upscale and luxury (pricing) might commence to blur once again. Large inventory might put pressure on price points in the short and medium term. We could see location of hotels and business segment dependence play an important role. Hotels/Resorts located within driving distance to major cities will benefit until the travellers are confident of flying again. In city, staycations will become more popular and city business hotels will have to create safe and creative experiences for couples and families.

Hilton India’s Community Outreach Initiatives

Hilton has always had a deep-rooted focus on serving communities where we operate. In challenging times such as these, our endeavour to community services is heightened. Several our hotels have reached out to serve local communities. For instance - DoubleTree by Hilton Gurgaon and DoubleTree by Hilton Pune took the initiative to feed the underprivileged communities as well as frontline traffic and police personnel who are either impacted by the pandemic or are assisting during the lockdown. Teams at the hotel prepare meal boxes and deliver to these groups and communities. These initiatives are undertaken with a strict safety protocols in place for Team members doing this service as well as people they serving. Many other hotels are also planning such community outreach initiatives.

Ensuring a Bounce Back Quicker Than Expected

When the world comes out of this pandemic, it is strongly suggested that there will be many numerous beginnings and learning for our industry. The way we function and operate, engage our guests and cater to their expectations, safety and hygiene protocols that will be expected by our guests and many other factors that will be new for all of us.

As an industry, we need to take a few steps to ensure we bounce back quicker than expected. To begin, we need to communicate and connect more than ever before with our Employees, Guests and stakeholders to reinforce confidence and trust. We need to maximise care while minimising touch points with our guests. Guests need to feel secure in terms of cleanliness and, we would need to provide certain critical services e.g. extra bandwidth for no additional charges to stay connected to work, family even more than ever. Hotel leaders (GMs) will need to more entrepreneurial to attract new business. Cost management will be a key area of quicker recovery and success. There will be stringent measures of cost mitigation yet maximising relevant and differentiating services to attract guests.

Every company/hotel needs to prepare well enough to be able to adapt to the New Norms and expectations from Guests. Be it upgrading Systems & Processes, Increasing the use of automation and technology in areas such as housekeeping, menus, rooms check in/out and keyless entry, guests in room entertainment amongst others. Also, training of team members to multi skill and uplift skill sets, best practices implementation from other countries as well as build a sound communications plan to connect with guests.

New Customer Needs and The Changing Face of The Hospitality

The hotel teams are strictly adhering to the advice of public health authorities, such as following social distancing, as this is the key precaution to stem the spread of coronavirus. Other safety initiatives being taken by hotels include restricted number of people at the time of check-in, minimal physical contact while maintaining highest standards of service, knock on door room service with disposable meal trays, separate laundry washing, deep cleaning and sanitization of guest rooms, amongst other measures.

Hilton has introduced a new program (Hilton CleanStay) to deliver an industry-defining standard of cleanliness and disinfection in Hilton properties around the world. In a first for the hospitality business, Hilton will collaborate with RB, maker of Lysol and Dettol, and consult with Mayo Clinic to develop elevated processes and Team Member training to help Hilton guests enjoy an even cleaner and safer stay from check-in to check-out. Hilton CleanStay will build upon the already high standards of housekeeping and hygiene at Hilton properties worldwide, where commercial-grade cleaning products and upgraded protocols are currently in use.  The goal of Hilton CleanStay is to provide guests with assurance and peace of mind when they stay at any of Hilton’s more than 6,100 properties representing 18 brands. The initiative will create a focus on cleanliness that will be visible to guests throughout their entire stay – in their guest rooms, restaurants, fitness rooms and in other public spaces.

Domestic Travel – A Game Changer

We must look at the industry recovery in phases. We have seen this before; the industry doesn’t come back at once and segments continue to evolve during this period of recovery. Domestic travel already did form a significant part of GOB (Geo origin of business) for Indian hotels and yes, they will be the first to recover given the nature of the issue we are dealing with. Having said that, we must keep in mind the supply in key cities and demand domestic travel can generate for us to encourage this domestic demand to become a reality. Domestic travel will have to be viewed in few buckets: Business, Meetings, leisure, Weddings / small size social gathering. Within domestic business, there are segments that show more resilience than the others: Indian pharma, telecom, PSU amongst others. The focus for hygiene, safety, health more than ever before will propel the domestic traveller to invest in quality accommodation and thus show a resurgence in domestic travel. If it will be a game changer, only time will tell.

International leisure travel will be curtailed as people hesitate to travel overseas and take long flights. The significant Indian outbound market will, therefore, look at domestic travel options more than before. Destinations like Goa, Rajasthan, Kerala, Uttarakhand and the North-East could stand to benefit more.

Fortunes of Business and Leisure Travel Segments

We think while people will have a lot of exposure now to remote meetings and that will certainly increase while the situation is fluid and till we have risk for infection, our feeling is that people will begin to also see the energy that physically meeting brings to business and its importance and relevance in my view will not decline in the long run.

Domestic business travel will be now more necessity-based, not just because of the fear of infection but also about optimising Travel budgets. Also, People will try to reduce the frequency of multiple trips and get more out of one visit – be it for business or leisure. The length of stay might increase as a result of this.

Having said that, leisure, in terms of small family get-togethers (given the fact that people have realised the vulnerability of life and miss a sense of real connection with extended family and friends), self-driven vacations and staycations might come in quicker.

Small scale and Intimate wedding events will begin to come back in the immediate future. What they will look and feel like, we continue to work with the relevant authorities and fraternity to understand the permissible guidelines on such gatherings.

International leisure travel will be curtailed as people hesitate to travel overseas and take long flights. The significant Indian outbound market will, therefore, be more inward focused with domestic travel increasing more than before. Destinations like Goa, Rajasthan, Kerala, Uttarakhand and the North-East could stand to benefit more.

Challenges in the MICE and Weddings Market

We believe the size of gatherings for MICE/weddings could be relatively smaller till we have a medicine/vaccination in place for the virus. There will be restrictions and guidelines on social gatherings and there will also be apprehensions to be part of large gatherings without proper social distancing measures.

Hotels largely reliant on these segments will have to engage in establishing new segments or avenues of revenue. The industry will work together to ensure standards of service and ways to make the MICE / Wedding consumer feel safe are in place on priority. There are many suggestions on how flights will operate keeping distancing in mind, table/conference set up will be rearranged as per distancing protocols, F&B services too will need to put in place similar measures, therefore, these segments will not drive large volumes of revenue like times prior to Covid19.