HOPE is Our Biggest Strength and also Fiercest Weapon in Times of Adversity
Let me start by stating the obvious that COVID-19 pandemic is undoubtedly the biggest global crisis ever experienced by the living mankind of today. This is unprecedented; there has never been anything more severe or more widespread than this in the annals of recent history. It has impacted lives, livelihoods and businesses, cutting across geographies and social strata. Predictably, India has also not remained immune to this pandemic. However, let us also admit that so far, the severity of COVID-19 impact in India is much more subdued than America, the European Union or China. This is primarily because India was decisive in locking down the country in the early stages of the outbreak itself to contain its growth. Lockdown essentially means that everyone, barring those providing essential services, is confined to their homes. All businesses are shut.
Now, let us quickly understand what does this shutdown mean for the Indian Hospitality Business:
* Total shutdown of all businesses under the lockdown rules, barring limited delivery of food means virtually zero revenues. Delivery volumes are fairly insignificant.
* All our fixed expenses, and their proportion is fairly large in our business, continue to accrue with no corresponding revenues to offset them.
* Spectre of job loss in the sector is an imminent possibility in a sector that directly employs 73 Lakh people and perhaps an equal number feed indirectly off the trade. Employers must therefore at least try to ensure that the kitchen fires in the homes of the employees is kept burning during the lockdown. It is a huge challenge with the limited cash flows but needs to be done. This should not be looked upon as a business problem but as a human concern.
* With no certainty on when is the business likely to resume, management & distribution of available resources is a very tough ask for any business leader.
* Finally, with all the above factors, there is a big question on the very existence of the business and its sustainability in the long run. No one knows how to deal with life and business in the post-COVID era.
So, the next obvious question is what next? What is the solution to get this out of the mess? What help is required from the Govt? How does one retool the business post lockdown?
Let me begin by saying that no one can give any concrete or right solutions to these problems today. There are so many unknown variables that any suggested solution will not mean much beyond being some educated guesswork! Think about it. Can we really assess the situation or suggest solutions without knowing the following answers?
* When will the lockdown end?
* When will we find a vaccine or an antidote to this virus?
* For how long after lockdown will the invisible scare of the “virus hanging in the air” last?
* What will be the final damages, both human and economic, that this pandemic will leave us with?
Having said that, these are a few stark realities that stare at us.
* We are fighting a battle for our mere survival right; a fight to merely remain alive!!
* However, many companies will certainly fail to restart their business post lockdown. This is undeniable. However, do remember that our industry anyways has one of the highest failure rates
* Consumption will be subdued in the immediate term across all segments. The business will at best be 30%-40% of the same period last year...and I am being optimistic here! Please don’t forget that we largely get fuelled through discretionary expenses, which is expected to become more subdued with the impending recession.
* With no expected inbound tourism in the foreseeable future, the buoyancy of peak season will also be subdued
* Business failures and lesser volumes will mean substantial job losses in the sector. This isn’t surprising; business closures directly lead to loss of employment.
* Every company will need to arrange for fresh working capital. Remember, our stocks are largely perishable so we need to replenish them before the relaunch, our places will need a fresh coat of paint, substantial investment will be needed to comply with new hygiene and health safety norms, we will also need some money for marketing activities and not to forget, some more money to fund the cash burn in the immediate term! And they need to come at the low interest rate and a moratorium.
* There will no major fresh investments in new projects for quite some time.
* Every company will have to reimagine their business and retool their business models. Business in the new post-COVID age will come with newer challenges with “new-normal”!! Restaurants must try to become nimble, asset-light and adapt to low-risk business models.
* Very importantly, every stakeholder in the food-service ecosystem, be it restaurants, its employees, landlords, aggregators, suppliers or the Government; will need to collaborate as a team to ensure that businesses survive in the post-COVID era. We need to redefine our relationship and redraw our terms of engagement because Business in the post-COVID era cannot be done on older terms of engagement.
* Communication with the customers in the new age is expected to move from product and places salience to how health-safe the place is.
* New social norms of “physical distancing” will hurt the bars & banquet the most and will also reduce the capacities of the restaurants and food courts.
Does this mean that everything is lost and there is only gloom around? My answer is a BIG NO!! Just as people talk about “Fear of Unknown”, I live in the “Hope of Unknown”! I firmly believe that HOPE is our biggest strength and also a fiercest weapon in times of adversity. You must surely nurse HOPE if you want to have a belief!
My hope is not emerging out of thin air. As much as I am aware of the current situation and the challenges ahead, I am also aware of our strengths. They are as under:
* We are faring far better than most parts of the world in managing COVID-19 and therefore should bounce back faster
* India has a massive domestic market. Our spending prowess may be lesser than some of the other developed countries but look at the size statistics; the combined population of US, UK, France, Germany, Italy and Spain is half of India’s. The population of Australia is lower than the population of Delhi alone!
* For us Indians, going out for meals and movies are occasions to bond, have collective entertainment and celebrate. They are social events for us and therefore stand a better chance for an early bounce back.
* China has lost a fair amount of goodwill with its role in handling novel coronavirus and repercussions are inevitable. This should benefit India, with a significant amount of manufacturing businesses shifting here from China. This will spur the business sentiments here and we will be an allied beneficiary of this changed elevated sentiment.
Let me sum up my commentary by saying that this pandemic is unprecedented and has hurt lives and businesses in equal measures. It is also a fact that we haven’t got any cure for this virus thus far and that is the biggest problem.
Business prospects look gloomy but I am a firm believer that few things need to be just accepted with an air of inevitability because they are beyond control. What cannot be cured must be endured; as simple as that.
Lastly, every crisis presents us with an opportunity too. This break has perhaps given us an opportunity to shed some flab off our business, tweak our business model, become leaner, more agile, strike better commercial terms and emerge in a more contemporary avatar in the new era. Let us believe in the strength of HOPE even if things don’t do look so good on the surface. A problem that appeared so suddenly, without any warning, can also disappear as suddenly. Let us not lose HOPE!!
.png)
