India. New Delhi. The ongoing lockdown in India and uncertainty on domestic and international travel has significantly impacted the hospitality sector. Aviation and tourism are the other big sectors facing this unpredictable crisis across the world. According to the Travel & Tourism Competitiveness Report 2019 published by the World Economic Forum, India ranked 34.
Hospitality sector contributing to the economy. The World Travel & Tourism Council (WTTC), the global authority on travel and tourism, reveals that travel and tourism in India contributed 9.2% of the GDP and created around 42 million jobs in 2019. This is close to 8.0% of the total employment generated in the country.
The total contribution by the travel and tourism industry to India’s GDP is expected to increase from $234.03 billion in 2017 to $492.21 billion in the year 2028. Total earnings from the sector in India is targeted to reach $50 billion by 2022.
Lockdown and job losses. One of the key challenges posed by the COVID-19 pandemic for the hospitality industry is balancing employment. Uninterrupted movement of people is one of the critical elements of the hospitality industry. With the changing dynamics due to the pandemic and travel restrictions, hotels are bound to pause their operations.
In an interview with Transcontinental Times, Rajeev Thakur, Director at Grassik Search Pvt Ltd said, “While latest figures are not available, there have been up to 80% layoffs (across certain hotel segments) & up to 50% salary cuts across hotels in India. The big 3 Indian hotel chains are not included as they have been very conservative in this regard.”
- Hyatt had globally announced the layoff of 1,300 employees by June 1. It has additionally asked about 120 employees of its Park Hyatt Chennai hotel to leave after the temporary shutdown of the hotel.
- Travel majors, Thomas Cook and SOTC sacked close to 350 employees, with more job cuts likely at the companies.
When asked about the recent data available on the job losses faced by the industry, Navneet Singh, CEO Avsar HR Services quoted KPMG’s recent report, “The Indian tourism and hospitality sector is aiming for a job loss of around 38 million (directly and indirectly) due to COVID 19. This makes 70% of the total workforce in this sector. It was the placement season when the pandemic hit India. This has resulted in a vague delay in hiring; deferred joining dates and a good percentage of offers have been pulled back.”
Rajeev Thakur further stated, “Post massive lay-offs at the beginning of the pandemic, selective hiring is likely to begin by August/September when the pandemic is expected to reach its peak. With the current occupancy level down to an average of 11%, hiring scenario is bleak & will be restricted to big brands & chains. The smaller segment has or is in the process of closing down/selling off their business.”
Road-map for revival. Due to restrictions imposed on international travel and limited domestic travel, businesses in hospitality sectors are bound to adapt to the ‘new normal’ and localise their offerings.
Sharing expert opinion about the recovery Thakur stated, “The revival strategy will involve introducing alternate customer segments like Isolation of seafarers returning from across the world, staycation options modelled around giving limited guests a unique experience, creating & advertising their guest safety strategies.”
With new travel rules being amended by the government, the hospitality industry is optimistic about witnessing some signs of recovery. However, the journey ahead is full of qualms until a collaborated approach is taken by the industry players and government for saving this sinking industry.
“Security and screening practices, increased self-service, and technology adept places with medical facilities on-the-go would make guests feel safe and secure and increase their confidence. From the marketing standpoint, constant communication with loyal guests, domestic market, through digital marketing and social media during the lockdown and post the lockdown will help the industry revive,” said Navneet.
While Anu Singh Bagal, CEO & MD at AB Consulting said, ”Learning and Development, new ways of working with special focus on Hygiene, sanitization, cleaning and safety of Guests have to be embedded in employees. There should be a focus on changes in Customer Experience, the switch in customer perceptions, shifts in consumption patterns, quality asset management etc so that revival of the hospitality sector will be there in future.”
The impact of these extreme market conditions is going to stay for long. To bring the hospitality industry back on its feet, a concrete roadmap to be drawn basis proper assessment of challenges. The industry is in dire need to seek some relaxations from the government. Reduced taxation on the hospitality industry, reduced costs of bar licenses, visa fees, and other associated costs by the government will increase the pace of recovery.