DECADES OF TRANSFORMATION TO HOSPITALITY INDUSTRY BY NAVNEE GULATI@LEXCLIQ

Pandemics can have a long irreversible transformational effect in different countries around the globe. Arguably no one can understand the impact without experiencing the crisis. Many developed nations have been shaped by various outbreaks therefore the transformational outcomes are nothing new, the just seem surprising because of the rage in developing nations.

 

SARS is one of the major and most talked about outburst. SARS hit hard, with estimates of its macroeconomic impact ranging from $30 to $100 billion. Though the economic impact is inevitable but the history has made us learn that several behaviors contribute in economic acceleration of overcoming the crisis and preparing the nation for any or many such possibilities.

 

First time in the history of seventy five years a pandemic named coronavirus is smashing the societies to the core. This global crisis is much vast than just a health crisis, it is expanding its domain and just like any other termite it is hitting the global economies and societies. This shock wave has shaken all the professions to the core. From concern to carefulness a lot of pressure have been built on every industry. Pressure and pushback on the hospitality industry is also majorly seen during this pandemic. Cancelled flights, empty hotel rooms, quiet restaurants this pandemic has taken a toll on the global hospitality industry. The reality is tragic as the whole hospitality industry seems standstill in the new normal of social distancing and the fear of such deadly communicable virus. Many examples and lessons are being learned worldwide through this massive outbreak.

These consequences of these catastrophic circumstances led to a global lockdown in various sectors perhaps, the travel, tourism and hospitality sector have been attacked on the forefront by this crisis. The tourism and hospitality industry is at the stake of potential job loss of around 38 million. Indian sector is expected to lose around 10 Lakh crores in keeping with the ongoing circumstances.

 

There are decades when nothing happens, there are weeks when decades happen!

According to the World Tourism Organisation there will be a sharp fall of 20%to 30% in the international tourist arrivals in comparison to the figures of 2019 which equivalents the loss of 300 to 450 US $ billion in international tourism receipts. The direct contribution of tourism and travel industry is almost accounted 3.3% to global GDP and 4.4% in OECD countries. It is seen that Asia will see the highest drop in hospitality industry with China accounting for the lion’ share of lost revenue. The world tourism industry claimed a trouble to 75 million jobs  This estimation is even more worrying when we reflect on the fact that tourism is a leading job creator for those vulnerable segments of population: in fact, a far higher share of low-skilled immigrants, women and students are employed in tourism compared to the total non-financial business economy

 

Pandemics like this will dissipate, becoming less deadly, but will not disappear.

The current scenario shows widespread unemployment, business folding under economic pressure, governments proactive of their state by keeping a halt on travels by stringent control on borders. However, such a situation may put halt on all the activities and hit all the sectors of economy deeply, everyone is aware that its not something which will disappear. Therefore,coping with this new normal is what is required and what is to be done!

 

LOCAL TRAVEL MARKET

Just like the Global Recession of 2008, the economy will once again encourage the local travel staycations and people will be holidaying in their own country.  Businesses reliant on tourism will need to re-think their marketing and sales strategies to capitalize on the changed situation. And undoubtably space will open in the economy for new initiatives that offer a novel approach to enabling and encouraging people to make the most of exploring their home country.

 

Even if the spread of virus is controlled in the coming days tourism being the first to shut down will be the last to reopen broadly. As the hospitality industry majorly involves one on one interactions it is likely to the last one to restart. Even when this industry reopen it will be under a new operating procedure because of the impact on the mindsets and behavior of tourists, major change will be seen in hospitality business worldwide.

 

TRAVEL A NECESITY AND NO LONGER A LUXURY

Since travel is no longer considered a luxury but had become a part of every one’s life just like after every outbreak and crises the world has to rise up, so does the hospitality industry. It hast to surpass the mundane routine and rejuvenate. Though their will be a drastic shift in marketing services, luxury travel will take its time to again built an important role in individual’s life.

Air travels are going to witness a cheap travel as globally the demand is going to fall. Airports will be less crowded in this new normal of maintaining social distancing. Luxury hotels will be largely affected which would take a huge toll on them for their depression. However,

The 5 key factors, however, in the overall travel scenario that will drive all of the above trends will be:
1. Safety : both perception and reality will matter
2. Health : government may introduce mandatory checks
3. Hygiene : There will be no compromise on this
4. Brands : Those that will stand for quality will win
5. Value: Good value for good money will be the new mantra.

 

The business may take anything between 9 to 24 months to start climbing back to previous peaks. Till then the headwinds will be strong and severe. Some will succeed, some will struggle, some will perish.

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