First and foremost, we hope that you’re reading this blog from the safety of your home.
In times of chaos, staying calm is of utmost importance because panic only breeds panic.
Unfortunately, the hospitality industry happens to be amongst the ones which are hit the hardest by the pandemic. Hoteliers & hotel operator companies across the globe stand in solidarity during this blow to mitigate, support and uplift each other. Our frontline soldiers are working amidst the lockdowns and management teams are weathering the storm from afar. The situation puts the hotel management companies in a difficult situation to be a shrewd business person and a responsible employer at the same time.
According to the United Nations, about 25 million jobs could be lost worldwide due to coronavirus and unfortunately most of it consists of jobs in the hospitality industry. Industry stalwarts across the globe are taking balanced measures so as to cut-off expenses and support their employee-base, which hotels struggle for revenues. Like Jim Collins writes in his stellar book ‘Good-To-Great’, “Rigor in a good-to-great company applies first at the top, focused on those who hold the largest burden of responsibility”. Although many big and small third party hotel management companies had to live their worst dreams but there were still a few exceptions. Here is a list of exemplar actions taken by multiple leaders which redefine leadership amidst the crisis.
Marriott CEO Arne Sorenson announced that he will not be taking any salary for the balance of 2020 and his executive team will be taking a 50% cut in pay.
Once the outbreak is contained and travel resumes, Marriott expects to bring back "as many of the furloughed employees as possible."
Marriott associates will keep their health benefits during this difficult period and continue to be eligible for company-paid free short-term disability that provides income protection should they get sick.
For Hotels across the globe, it is not going to be easy to survive in times of COVID-19, especially for independent hotels as well as the hotel asset management companies in India. Even the big hotel operations management companies which have solid structures and large resources at their disposal are also struggling to find a balanced solution to this unprecedented problem. While India is grappling with a 21-day lockdown to combat spread of this pandemic, hotels are hit hard in terms of maintaining a minimized operational cost when the revenues have decreased by more than 80%. Like Ankur Bhatia, executive director at Bird Group ( one of the hotel management companies in India, which runs Roseate Hotels & Resorts in India and the UK) said
“It doesn’t make sense to run the complete infrastructure. For both our hotels in Delhi/NCR, we have shut down a couple of public areas, besides a couple of floors to save on costs. The rates are softer by 15-20% from last year”
Whereas Himmat Anand - founder of Tree of Life Resorts & Hotels said
“We are sending, in rotation, a majority of our staff in every Unit on paid annual leave for two to three weeks. Only skeletal staff is being kept back for daily upkeep and caring for the few guests who check in”
Coming from the experience of working with hotels of a wide range, ProMiller hotel management company has decided to compile a list of helpful solutions to survive in times of COVID-19 for independent hotels. We have also tried to touch base with the aftermath of COVID- how will the industry look like in ‘post-corona’ times and how a hotel should rethink their strategies. All hotels will have to re-adjust their annual budgets in accordance to the damages caused by the current situation.
Our first suggestion has to be to start preparing future strategies for ‘post-corona’ times along with taking precautions to mitigate the effects during COVID-19. Change in hotel structures and SOPs is inevitable in the ‘post-corona’ times as hotels would need to realign their properties and bring the daily affairs in order. Hence, it is only wise to think of these possibilities and prepare for them while we have time.
Precautions during COVID-19 lockdown:
Minimize Operational Costs
Efficient Manpower planning and support to staff
Train staff with health & hygiene guidelines
Taking care of existing and potential guests
Additional sanitation and hygiene products
Tackle cancellations and build revenue strategies
Day-to-day expense management
Reach out to Government for employee benefits and recovery of loss
Preparation for a post-COVID time:
Being ready for few low-revenue months in future
Streamline recovery procedures
Re-adjust annual budgets
Employee recovery and retention
Realign operational processes
Advanced expense management
Few suggestions for government intervention:
Financial support under Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA) or a similar Scheme should be extended to the entire hospitality industry in order to prevent employment loss. A minimum support on this account from the Government would go a long way for businesses to avoid layoffs.
Government should articulate that the spending on activities related to Covid-19 mitigation would be earmarked under Corporate Social Responsibility work of the corporate sector. This way the pooled resources of the corporate sector will provide the financial wherewithal to navigate our way out of the present crisis. Allow companies to give advance CSR funds of next two years allocation in Prime Minister Relief Fund to support expenses for combating COVID.
Loans and debt EMIs borne by hotel owners and investors should be deferred by 180 days with no interest for the deferment of the payment.
The removal of fees for any upcoming licenses and permit renewal for the hospitality and travel industry across states. Hotels pay a hefty bar license in addition to many taxes like property taxes. The validity period of these taxes and licenses be extended by at least one year without further payments.
GST should be relaxed for hotel rooms and F&B to boost the demand in order for recovery.
We hope, as a nation, India recovers soon from this pandemic and Hospitality industry among other sectors are able to revive operations soon. Stay put at your homes and do your bit for your community, country and the earth. We, at ProMiller, have facilitated proper sanitization and lock down of all the hotels managed by us- following the government orders. We are taking all possible actions to safeguard the interests of our guests as well as our staff who have always put their work before themselves. We are helping to find temporary work for furloughed staff and encouraging them to reach out to the government while we also request the government for relief funds and intervention.
We are working on a comprehensive checklist to help you follow proper protocols in this unprecedented situation. We will address three major questions: 1.) What should hotel owners do amidst COVID-19 lockdown? 2.) How to manage hotel revenue and operational cost amidst COVID-19? 3.) How to support my hotel staff during COVID-19 lockdown?’ We will soon be publishing a “Checklist for Hotel Lockdown in COVID-19” along with actionable points to safeguard the interests of all stakeholders.
If your hotel needs help with any operational, financial or legal process; please don’t hesitate to reach out to us. ProMiller is happy to offer pro-bono consultation to independent hotels in these difficult times. You can write to us info@promiller.in and/or visit us at www.promiller.in to know more.