It's all about the proverbial 'leap of faith'

The General Managers of hotels and resorts have a tremendous opportunity to take the plunge, given the new norm of intense focus on cost optimisation and automation. They have to set in motion an exercise, identifying key competency job roles. Based on ABC ratings, they retain the ones who have the potential to be multifunctional and multi-skilled associates and are capable of expanding capacity to deliver more with limited resources. 

Hospitality industry, at present, is undergoing a major churn in terms of coping up with Gen X and Gen Y having gotten used to WFH, furlough and scaled down operations during the pandemic. Many professionals at supervisory, management and skill levels got used to experiencing a less stressful balanced life, allowing them to spend quality time with their nuclear families. Besides, they could pursue interests beyond their immediate job, explore hidden talent and look for alternatives beyond industry assignments. Most of them began pondering over the vulnerability of the industry’s ‘first and worst to be affected’ risk profile. This triggered off career change search to safer and more stable segments like banks, hospitals and start-up entrepreneurship in standalone F&B business space in their hometowns. As most of them are young-double income-no kids’ couples willing to seek work-life balance, enabling jobs to augment their income even if it means a lower salary but better family life.

Similarly, the industry, the owners and the operators were battling with sudden and complete devastation of business, leaving most to hold onto minimal operations to keep the asset going or in worst cases, forced to close down. Added to this was the disappearance of even the bread and butter customers, be it for rooms, F&B outlets or banquets. Recovery from such an unprecedented once-a-century downturn meant the industry had to transform into a new business model not only to survive and insulate itself from future catastrophes but to adapt and thrive with a new norm of right sizing culture specifically to gain control over escalating cost lines. Although the revival of business is filling up hotel rooms, banquet halls and footfalls as also boosting ARRs, it is not enough to cope up with the inflation and natural rise in input costs, thus narrowing margins. The new management mantra is all about no frills, no freebies, a mix of high and basic yield-centric value and volume-driven sales while cutting down on staff ratios, energy conservation and zero waste merely to manoeuvre around this road to recovery and consolidation on RevPAR to re-establish market share dominance in the long-term.   

Unpredictable volatility in the market leading to swings in revenue streams necessitates intense focus on cost optimisation. Organised branded players as well as unorganised MSME sector in the lodging and catering industry have had to do right sizing of human resources across the board to stay on board. Most hotels and resorts are selectively reopening the point of sale which are in tune with demand contributing to a cost plus revenue at least. Outlets and facilities not breaking even, putting pressure on margins are being shut down and re-scoped to generate revenue through new business models. 

We are familiar with weekend exodus from metros to drivable getaway resorts as the new phenomenon. Extended families find these resorts the place to unwind and reunite, re-bond in safe and secure surroundings. The biggest beneficiaries have been leisure resorts within a five-hour drive location from a big city. Almost sold-out occupancies back-to-back with family stays, weddings and birthday events have turbo-propelled the recovery phase remarkably well over the last quarter. Even better is the current quarter (2) which has reported an upswing for all city hotels with near full occupancies and back to pre-pandemic ARRs.  

This problem of plenty has taken the entire industry by surprise with the irony of ‘houseful business and scrambling for talent’.It brings us to the unprecedented challenges of ‘wooing both the trained and fresh hotel management graduates as well as the pool of skilled school freshers for shop-floor work to rethink on shifting away from their core industry of hospitality.’ 

The hotel industry is no longer an attractive career choice for bright, new gen high performers who are unhappy with work-life balance in terms of workplace hours, below par salary levels, no flexibility on timing or days to choose for WFH, highly demanding customer pressures leading to stress and servient kind of atmosphere and a high risk volatile industry. When compared to other industries, compensation and perks are limited for managerial aspirants. Then there is stifling atmosphere in a top-driven hierarchical culture and limited career growth up to mid-management roles only (all senior corporate top C-Suite jobs in a hotel company in India are assigned to all, either finance or marketing or strategic background non-hoteliers), leisure destinations don’t have adequate infra for families like healthcare, quality education, leisure activities, access to airports for a quick getaway to hometown and back, seasonality in business means all incentives are subject to revenue depleted during low seasons. 

Given that almost all these factors are not going to quickly disappear especially on the Indian way of hospitality, getting our guests used to being pampered with overwhelming service through multitudes of associates are now getting to be extremely challenging even for an exclusive premium brand with shrinking clientele. The 5W1H of What, When, Where, Why, Who & How of this “change” depends on industry stakeholders who have to tackle the ongoing challenges on a crisis management mission mode as talent crunch is spiralling rapidly. 

Herein liesthevexed “to be or not to be” dilemma. The future, as is increasingly evident, is all about “redefinition of service offerings” (personalise luxury/ full/select/ limited), embracing wholesale automation including extolling the guests to play their role (refer co-creating with the customer)to live the experience and derive maximum value for self. For eg, unobtrusive checking in/ checking out/ online bill settlement, seamless access to all facilities/ amenities/ services without depending on human touch or presence be it walk in breakfast@ ADR live counters, ‘cooking with the chef’ experience, me, myself & I manage my workouts, spa @health club centre or the bar/ dining experience wherein, for example, open live kitchen and direct interaction with the chef completely eliminating manual service (it’s already in vogue in scarce and expensive human resource geographies like Europe, US, UK etc). When and who will initiate a very bold disruptive “service concept” of minimal or limited service component in all areas of a hotel starting from the lobby reception to all F&B facilities is now a matter of time with the bold and daring brand coming out openly and claim the first industry move.

In my view, the market is ready, given that many other sectors and international airports have already adopted it. In this futuristic scenario in India, upmarket hotels are already re-strategising their service philosophy to move into an unobtrusive smart way of gaining maximum benefit with minimum smart staff and minimum human service aided by automation. Many of the traditional repetitive and replicable manual work is being replaced by smart chip-led machines with the help of AI & IOT tools. It is all about driving efficiency but are our GMs ready to embrace, adopt and be an evangelist?

As a matter of fact, the new internet-savvy Gen XY associates (executive and skilled workforce) indoctrinated by the global trend of “smart lifestyle” are simply ready to move into this new-age “DIY” work environment. The world of hospitality is rapidly changing, fast replacing costly traditional concepts of ‘personalised service with smart and efficient time sensitive service’, delivering immense value and desired outcomes to this new-age time poor guest. Today, the smart road warrior is not into any fuddy-daddy slow service culture notwithstanding any level of personal attention.

In order to future proof the hotel operations and business, the hotel GMs need to dramatically change their mind-set and lead a major transformative leap into the next practices as envisaged here. Only those who dare and take the plunge to bring about a platonic shift in the way in which hotels and resorts are managed globally will go beyond this point of uncertainty enveloping our domestic industry today. 

Nevertheless, this will be a painful-fail prone movement forward. However, with a carefully planned out strategy and a realistic execution plan with contingencies provided complete with total buy in from all stakeholders at all levels, the hotel leadership can initiate a trial phase of a few selected areas of the hotel. For eg, the top floor ‘club floor facility’ redefining the service offerings and re-training the select smart staff into multifunctional roles. Most new young mobile savvy workforce is wired for executing no frills but efficient time sensitive service in tune with the new age business/ holiday traveller. The world is ready to embrace the change and change we must. 

While these are conducive to getting back the top performers into a new work ethos of “less is more” with a promise of services sector benchmarked compensation packages, these boys and girls thus incentivised will flag of a reverse flow of talent trend to the hospitality industry. The entire concept of “best pay to best talent” will easily offset from savings gained from right sizing exercise put in place to make up for the enhanced pay packages to the ‘A’ level smart associates now limited in numbers, very similar to the successful models in the developed world. 

A new ‘charity begins at home’ attitude will elevate the quality of life for the hotel operations’ associates as this new gen of educated and aspirational yet independent associates will find this as a progressive workplace environment friendly to them as much as it is for the guests. Today’s young guest service assistants are all self-directed individuals performing to targets of task and time on their own self-driven ethos as they are exposed through the internet to a truly international work culture. Indian hospitality has to adopt and adapt best practices of similar sectors like the airlines or even IT wherein a culture of designated shift timings with stipulated working hours are part of the contract. It is indeed in the realm of possibility. 

Predetermining or defining customer expectations is largely enabled by adhering to predetermined order of defined service and product, thus making any out-of-the-way additional service as required by the customer are payable against usage or value derived. For eg: banquet halls occupied beyond the stipulated time will attract extra rentals (often weddings, family or even company events tend to stretch beyond the time contracted creating back-end disruptions like extra hours of staff deployment, extra energy consumption etc). There are many hidden areas of non-planned over usage of a hotel space and time ad hoc without adequate matching compensation. A flexi performance linked pay system linked to productivity while ensuring minimum monthly pay with supporting perks, internal growth and certain security of job insulated with fair employment practices will elevate the attractiveness of Indian hospitality jobs to a very different level. 

The new millennium hotel GMs themselves have to be able to ride this new wave of value-driven cost-centric smart hotels & resorts striving hard to perfect the art, science and maths of hospitality while ensuring it is leading to sustainable business growth and expansion for the owner/ operator/ brand and most importantly, for all the members of the team.