The year of hope and a new beginning

The year 2022 will be one to be remembered by the hospitality industry. It started with a lot of fear and uncertainty and with abundance of hope and expectations. It ended with lot of satisfaction. By the end of the year, the industry was happily back on rails with Average Daily Rates (ADRs), RevPAR and occupancy levels back to or above the pre-pandemic levels. According to JLL’s latest Q3 report, the year witnessed the growth of 89.6 per cent in RevPAR from Jul-Sept’22 (Q3 2022) and RevPAR growth of 89.6 per cent from Jul-Sept’22 (Q3 2022).

It is a remarkable recovery, from the dismal situation of practically zero business in 2020. But the year will be remembered for reasons more than recovery in room rates or profit. The industry can justifiably be proud of the resilience it showed during the dark days with little or no support from the government.

Globally, as in India, the Covid19 experience brought home one lesson very sharply – the future existence must be consistent with safety, hygiene and sustainable way of operations in every sphere. The top echelons of the industry have always played a pioneering role in innovative sustainable practices and they continued with new initiatives during the year, matching the requirements of the situation. The year, however, witnessed acceptance of this need by all sections of the industry and spread of sustainability awareness among SMEs and establishments in 2/3 tier cities. The Hotel Association of India led the way through consistent advocacy through its magazine, Engage, and its newsletters and with national and global collaborations with organisations like WTTC Sustainability Basic and UNICEF.

Domestic travel played an important role in shaping the industry in 2022. Domestic tourism has always been the most prominent feature of growth of Indian tourism and hospitality, but its integral importance for the survival and growth of the sector was perhaps never as much realised as in 2022. The year is marked by empowerment of the consumers’ changes in the preferences of travellers. New expressions like “staycation” and “bleisure” have become part of the travel vocabulary and the hotels have to adjust to the changes with flexible reservation and cancellation policies. Across the industry, travellers’ preference for leisure travel was noticeable and places like Goa, Kashmir, Himachal Pradesh and Uttarakhand attracted high number of travellers throughout 2022. 

Predominance of the use of technology and digitisation of many of the operations for customer relations and servicing marked the revival of the industry. At the same time, globally as well as in India, staff shortages caused serious concern. In Europe and elsewhere, post-Covid19 experience of labour shortage, caused by people who moved due to closure or decline of business or for better options was a disturbing factor. Hospitality giant Accor, for example, reported a loss of about 15 per cent labour. The civil aviation services in Europe reported severe impact of labour shortage. Some tremors were felt in India as well and the wider question of manpower management would be a matter for attention in 2023.

The year 2023 holds even better promise but there are worries and uncertainties too. Occasional recurrence of the virus in different parts of the world, still uncertain behaviour of the monkey pox, the volatile global geo-political situation and looming threat of recession in major economies like USA should keep the industry on its toes. And topmost concern for the year should be not to relax on safety, hygiene and emphasis on sustainable practices.

The UNWTO Confidence Index surveys indicate that most experts see a potential return of international arrivals to 2019 levels in 2023. The tourism and hospitality industry will have to gear up for this growth in many ways — destination development, growth in civil aviation facilities to cater to the expected arrivals, proper marketing and confidence building measures to project a safe, sustainable experience, expansion of decent accommodation and so on. 

The year 2023 is going to be an important one for India as the President of G20, it will host the summit, with more than 200 meetings across the country. G20, with nearly 90 per cent of the world’s GDP, 80 per cent of global trade and 67 per cent of the world’s population, exerts a significant political and economic influence. It will be a great opportunity to showcase and market the excellence of Indian tourism and hospitality. The G20 summit will open new growth avenues for the Indian travel and hospitality ecosystem and bolster the demand for high-quality accommodation. The smooth running of these high-profile 200-plus meetings will support India’s efforts to establish itself as a global MICE destination. 

Preparing for the G20 will be an opportunity to develop infrastructure – accommodation, civil aviation, destinations – for the growth of international tourist arrivals that the Ministry has projected. In that context it will be an appropriate occasion to give incentive in the form of “infrastructure status” which will increase investments that can bridge the gap in accommodation that the country faces. HAI hopes that in 2023 as the Government usher in new initiative for PPP and stronger collaboration with the industry, many of the suggestions for taking Indian tourism and hospitality to the top, will see fruition.

During the period of survival, HAI had persistently asked for a pragmatic policy for liquidity support particularly for the SMEs as well as wage support for preventing job loss. Some other suggestions were:

• Rationalisation of taxes and tax rates, GST and a long-term interest rate structure

• Policy Interventions for waiver of statutory dues etc for the period of closure of business

• Easy compliances and ease of doing business, and incentives like ECLGS. 

Many of those recommendations are still relevant even if the industry has been resilient enough to overcome the worst. Similarly providing “industry status” will spur growth of the sector and bring returns manifold for the economy.

AUTHOR BIO: MP Bezbaruah is Secretary General, Hotel Association of India