Survival of the Smartest
Covid-19 outbreak has brought the world to a standstill. Never in our worst imagination, had we thought that the world would be stuck within the four walls. Over the recent weeks, we have been living with utmost uncertainty of the future. The economies of most countries have seen severe repercussion. We move from ‘survival of the fittest’ to ‘survival of the smartest’. The industry pivots into a ‘New Normal World’. Hence the impact is widespread. Predicting is Pointless. There are no Grand Strategies.
What we face is often coined as a Discontinuous Change (refers to external changes that require internal adaptation). Our best opportunity is to be (alternate scenario) ready. Essentially one must evolve to survive. Collaboration and Competition will be indispensable.
The Pandemic Impact
What is visible - is ‘Today’. Financially, we are at a standstill. This will test our resilience – culture – ethos – outlook; differentiate companies that plan ahead or live by the day. Those who really believe in their values or simply use them in their morning meetings as an empty platitude.
Smarter Talent will reconsider. Is employee branding merely an eyewash or is there any substance in the foundation of that brand. Buyer outlook will change. There will be new expectations and considerations. From these will stem novel processes and designs. Ultimately there will be business opportunities that did not exist before.
What is interesting to note is collectively, what will be remembered and what will be forgotten.
Best Utilization of Lockdown Period
This is the best time to relax, reconnect, recollect, rethink, redefine, reprioritize, review and rearrange. This will allow you to be alternate scenario ready. Take a 360 Degree Approach. Appoint a SWAT team to redirect the organization from a five-year planning perspective. Put your best and connected minds on top of this task and give them a free hand at implementation. Let them define the boundaries and when necessary exceed those boundaries too.
Most immediately, create three Scenarios – Best, Worst and Most Likely. It should not be an overkill. It could be as simple as predicting Recovery by the Quarters in these three Scenarios.
For Example:
Quarter | Best | Worst | Most Likely |
Q3 2020 | 40 per cent | 10 per cent | 25 per cent |
Q4 2020 | 60 per cent | 30 per cent | 45 per cent |
Q1 2021 | 80 per cent | 50 per cent | 65 per cent |
Q2 2021 | 90 per cent | 60 per cent | 80 per cent |
Q3 2021 | 90 per cent | 70 per cent | 90 per cent |
Q4 2021 | 90 per cent | 80 per cent | 90 per cent |
Q1 2022 | 90 per cent | 90 per cent | 90 per cent |
*Assumption 100% may not be achievable as rates will be corrected.
Industry’s Recovery Plan
The industry should focus on promoting and marketing destinations, prioritizing domestic tourism, and staycation with no tolls for 12 months after easing restrictions. In addition to ease of entry and visa restrictions, tax deferment will be the best aid for the sector. The road to recovery lies in reduced taxes for the next three years.
The existing interest on loans should be reduced for the next three years and a special lower interest on loans for new hospitality business will be boon. Banks should extend the moratorium periods of 9 months for interest on existing loans.
There should be stricter health guidelines to be issued for hotels and inspections to be done on a quarterly basis along with ratings to be given to boost public morale on hygiene standards followed by the establishment.
Tax refunds and rebates would be great, however keeping in mind the government expenditure to manage the population, it would be a tradeoff for a stable environment socially. The hardship if not handled effectively might create social unrest.
The post-COVID World
Post-COVID is a process. There won’t be a clear demarcation. However, a good period to start promotions will be once 97 per cent of the cases have been resolved in the country. While some initiatives have been listed above that need collaboration with the Government, some direct tactical campaigns that could be implemented in the immediate 6-9 months post lockdown are as shared below:
Besides these, consumer sentiment is extremely important – hence the awareness campaigns to build on steps taken for more stringent hygiene standards will be a given.
The Brighter Side
China was the first country to ease lockdown. The business in hotels bounced back to 30-40 per cent average occupancy within 4 weeks after the lockdown was removed. Hence Domestic travel will play a very important role in ensuring that the cash flow requirements of the hotels are met.
Considering India has a strong domestic business base especially in the Tier II and below cities; the bounce-back of business and tourism inflow should be similar to China for these cities. Which would mean that a large part of the Industry will be back on its feet and the recovery in these parts of the country will be faster than the metropolitan cities.
It would be interesting to note if the distribution landscape for the industry world over changes. Now that the world has reset will hotel chains follow a different approach to build direct relationships with the customers or will the distribution partners such as the OTAs consolidate their position faster and stronger than before during the initial period of recovery.
I would like to share a story here to put things in perspective.
There was a little boy called Jack who was 12 years old who was fun, loving, active, always wanted to be next to nature. He was curious about exploring new places and having fun with the birds and the bees in the forest. However, every time it rained or snowed, he would get depressed – staring vacantly out of the window and watching the raindrops or snowflakes falling. One cold wintry night, while having dinner his mother, his mother asked him why does he sits by the window and stares outside every time it rains or snows. Jack in a soft sad voice replies, “how can I go out and explore in such lousy weather?” Both the parents smiled and looked at each other guiltily and said to Jack, “Come let’s finish dinner”. After dinner Jack’s father said, “Let’s get ready for a stroll in the woods.” Jack looks up surprised and says, “But it’s snowing papa”. Jack's mother in the meantime brings him all the winter clothing including snow boots and asks him to gear up. After protecting themselves well, all three of them go out for a stroll. Jack’s eyes were sparkling at being able to go out into the woods and his parents saw how happy he was.
The moral of the story is there is no bad weather. One needs to protect himself with the right clothing and equipment. COVID 19 can be fought with the right equipment and decision. We need to change the sentiment and thought process.
