Resort locations are doing extremely well because of the pent-up demand: Neeraj Govil

2020 has been a challenging year for the hospitality industry. In hindsight, what is your take for this whole year for hospitality?

2020 has been an extremely challenging and unprecedented year in many ways. COVID-19 -19 has had a global impact on travel and tourism. In China it began towards the end of 2019, India began to feel the impact of this in Mid-March, and I think between March and September, the elective industry and we bore the brunt of this. It has had a tremendous impact across the gamut of our operations. It impacted our people, and it has affected our businesses. Business virtually came to a standstill in the initial lockdown months. So, it has been a year where we have seen singular pain. However, in the wake of the crisis there have been learnings. I believe that industry, in general, will institutionalise the learning we have had and over the next few years, we will begin to reap the benefits of those learnings. We have had the experience now of looking at new revenue streams and being focussed. We have been able to work collectively to lobby for the hospitality sector. Relationships have become stronger. 

How has the year 2020 been for the Marriott group internationally viz a viz India?

The Marriott group expands across the entire globe in terms of distribution. We have a lot of hotels across the globe. Just as the pandemic has impacted different countries and different continents and travel tourism has taken a hit. Obviously, Marriott has been impacted in those regions. The good news is that we are beginning to see an aspect of recovery in many markets. Occupancies are rising in pretty much all our locations. I can tell you that occupancies are now based on the strength of their domestic market in China. We see other countries like Japan and Australia beginning to see recovery as well. Even if we look down at the Asia Pacific, we are absolutely on route to recovery compared to most countries. Yes, there has been a global impact for sure, and recovery has been varied in terms of where these hotels are located? And what are those markets like? Whether a second or a third wave impacts them? But overall, one gets to sense that we are generally seeing a recovery now, and the news of the vaccine is good news. There is news that a couple of countries have now approved the vaccine. At least the Pfizer vaccine for usage is particularly good news. And I think this will help to build confidence in travel again.

JW Marriott Mussoorie Walnut Grove Resort & Spa

How many of your Marriot hotels are open in India right now? And in the revival stage, what kind of group occupancies are you seeing in India's Marriott hotels?

We operate 125 hotels in the country. Today all our hotels are open apart from three. This is a big improvement from the peak of the pandemic when our most popular hotels were shut across the country. We have witnessed an improvement in terms of booking dates especially in the last quarter of October, November, and December. We have seen incremental occupancy recovery since August. That is now looking to be reinforced by the festive period that we saw in November and December. The pent-up demand is out there. And we are largely driven by leisure, guest, and wedding functions in our hotels. Even though we take a limited number of people for weddings, we find that this helps acquire a lot of business in our hotel. And there’s pent up demand for leisure travellers. On the business traveller side, we are starting to see uptake in demand there as well. Basically, we see some project-based movements. We are beginning to see the return of expatriates into India, more movement in embassies and the consulates. There has been an enhanced activity in the PSU segment as well and the MSME segment in India. So, things are on the uptick by and large, and our occupancy levels for our portfolio will probably be close to 40 per cent as we go into December. Resort locations are doing very well because of the pent-up demand. Almost all our resorts are running extremely high occupancy. Not just on weekends but right through the week. They have seen some good rates, so this is all completely driven by domestic demand of this week. So, we are starting to see a large proportion of our hotels, now breaking even, and starting to deliver and moving out of the cycle any loss.

Can you tell us how you embellished your F&B offerings and what are the ancillary revenue systems that you have built up during this time?

Food and beverage have rebounded strongly. We have seen many markets where the government has allowed restaurants and bars to reopen. We see a tremendous amount of demand for these outlets. So, F&B is certainly seeing a good swing in the right direction. We believe that the recovery there will be much faster. We are also incredibly pleased with the demand we’ve seen for our home delivery service, which is what we call ‘Marriott on Wheels’. We were one of India's first companies to announce to customers that we are bringing it to their homes and directly to go up on strength. So, we are big now in the home delivery packed food business. 82 of our hotels are now delivering across India, so that is a big chunk of hotels pushing out there. And we have also devised other ancillary means of making revenue. So, outsourcing services of laundry; facilitating catering in some offices on-demand as they begin to reopen; we offer many venues in our hotels under something called ‘Work from Marriott’, there is good demand for that as well. The customer can book a room and work out of there, or a customer can work out of the public space of the hotel. This is very viable for ‘work from home’ and that has been prevalent in most parts of the country, I also understand its strategy. Resorts show that guests want to get out of the homes. And I think we are also starting to see some of that demand come through in our hotels.

Marriott Resort Jaisalmer

There has been a lot of progress in your Marriott Bonvoy program. Can you briefly share the benefits of the same, especially post-pandemic and through the pandemic? How did you keep your loyal patrons with you?

Marriott Bonvoy program is critical for the company. We have millions of members around the world and there are large numbers in India. Through the pandemic, we have stayed engaged with our guests by really communicating with them. So, we kept them updated about everything. From what Marriott has been doing in terms of cleanliness, how we are progressing in terms of reopening our hotels, to the offers that we are providing. We launched several promotions and games for the Marriott Bonvoy members. We created many special moments for them. We did a lot of it virtually. We had cooking classes, yoga classes, bartending classes, etc. these efforts were very much appreciated. We also had a special choir with IPL this year for Marriott Bonvoy. We were one of the sponsors for the Mumbai Indians, the team that eventually ended up winning the competition. 

How have you managed to cement your relationship with different stakeholders, especially the owners, because the main problem has been for owners because their revenues have completely gone through this time. So how did you manage that, and how cooperative are the owners?

I think the owners are important constituents of our business model. They own our hotel and heavily invested there, and we have had to work with them very closely through this pandemic, and I can proudly say that we received tremendous support from our owners. So, we stayed very engaged with them, we shared our plans with them throughout the pandemic.  Everybody has experienced a lot of pain and we have done everything possible we could do to support their interests in terms of the business. We have worked through out with them on the cash flow. We have introduced safety measures in the hotel. To limit problems with the cash flow, we have tried to drive business into the hotels to keep them going. And I can tell you today when we look back there is a chance that we are looking at the future with a little bit of optimism. See, we can always remember that owners and operators are aligned at the end of the day. They want the business to be successful, and we are blessed with the fact that we have some wonderful partners in India. We have owners with a single property, and we have many owners who own multiple hotels and continue to express interest in new hotels with us. And that for us is the kind of feedback that we want to hear. 

When do you anticipate that we will see the true revival of the hospitality industry? 

I think there’s reason to be optimistic. I think the worst is behind us. We are experiencing in India a gradual recovery. Positives include we have a huge domestic market which offers tremendous potential, and the general economy is reviving faster than originally expected, which is a good sign. 

On top of that, once the international comes back, I believe it will rebound very quickly. I think it will be a year of gradual increase we will see as we enter 2021, 2021 will be the year of recovery, the gains are going to be relatively smaller as we enter the year. 2022 is when, in most cases, we should be fully up and running. Because by then, the vaccine will have been administered. In general, the confidence of the traveller will be back. I see the recovery period right through 2021. As we go into 22 and beyond, I think we will be back on our feet with the resilience that this industry has. 

We have about eight hotels slated to open in 2021 across India. These are in multiple locations. We have reached out to the consulates. We will see those eight hotels open next year because we are in an advanced stage. We look forward to the coming year with a great sense of optimism. I think we all should. We have every reason to believe that we are starting to look at this pandemic in the rear-view mirror now.

Le Meridien Jaipur

These eight openings are they scheduled in leisure destinations, or are they Business hotels?

Well, it is a mix of leisure and city hotels. We have got two hotels to open in Goa, which is a leisure destination. We have another hotel that is to open in Dehradun and a hotel in Agra. But we have also got a hotel slated for Trivandrum. We have a hotel slated to open in Lucknow. We have another hotel in Coorg. But I do believe that the Leisure segment will be extremely relevant in 2021.

How do you think that we can grow brand incredible India, especially post COVID-19? How do we get a tourist to come to India now?

It must be a collective effort. Firstly, all the arms of the government and the private entities need to work together. And it needs to become something that we collectively push and act towards. Secondly, we need to project India as an exciting and safe place to come to. Thirdly we must remove any impediments for tourists to arrive in India. Because there will be a pent-up demand for global travel, and India will not compete amongst its states rather with other countries.   We must look at what competitive advantages India has. We need to realise that in 2021 we are likely to have more long- stay guests if people decide to get in a plane and travel. I think the important thing to remember is that we are optimistic about what the future holds, and we are looking forward to the start of 2021.