Pandemics are a reality, they have happened in the past and whether it will happen again or not, no one can predict for sure. However, are we better prepared now? Have we, as a business or individual, learned from the current crisis to be able to manage it better, if and when it happens again? Are we willing to make the required changes and live by them?
The hospitality sector saw unprecedented revenue loss, as business came to a halt and several hotels were shut down during the pandemic for a long period of time. It led to job losses and adjustment in salaries at a scale never seen before by industry professionals. The sector struggled to make operating profits let alone pay debts.
To survive the pandemic, we learned to be "frugal" in every way possible and realized that money saved is money earned. Even in 2021, when we are still unsure of what the future holds for us, we need to keep this thinking close to us, as we cannot predict the virus or its impact on people's travel habits in the current context; for instance, travel restrictions across the world have been increased again due to the new UK strain.
During the last one year, hoteliers have made several changes for good and should continue them in 2021 as well:
I am sure just like hotel owners, hotel brand parent companies have also learned to be leaner, with lower overheads, smaller corporate structures, and better ways of doing business. How can brands pass some of these benefits back to the hotels and add to their ROI both in the near and longer term? Hotel brand parent companies should take a target every year to reduce the cost structure for the hotels as they build scale, source locally rather than import and build more efficiently, by ensuring that the allocation of revenue generating areas is higher than back of the house. Brands can also bring in models that help to reduce built-up area where multiple hotels can use a common facility.
Many of the above have been implemented in some degree depending on the external factor. The question we need to ask now is - do we really need an external factor to create these efficiencies or should we make internal targets each year to look at both smaller gains and drastic changes, which will help us to build a better model for the industry as a whole?
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Ajay has had extensive experience with over 25+ years in Hospitality, FMCG, Private Equity & Technology solution companies during which he has worked with several leading domestic and international companies. He has PGD in Hotel Administration and a PGD in Marketing Management and has certifications in Business Strategy, Digital Marketing & Fundamentals of Revenue Management. In his previous roles, he has been Regional Director Sales & Marketing South West Asia IHG, Chief of Asset Management for Private Equity Investor Duet India Hotels and Regional Director South Asia for New Builds & Transitions with Starwood Hotels prior to its merger with Marriott International. Contact Ajay at firstname.lastname@example.org