Hospitality sector ready with Plan B

The hospitality sector has a backup plan ready if the country faces deficient rains.

A bad monsoon, besides hitting day-to-day operations at a hotel, would mean a slowdown and eventually affect profitability and bookings.

Although not exactly in panic mode, the hotel industry has put in place measures such as adjusting water pressure, rainwater harvesting and sewage and fluid treatment plants, apart from spreading awareness among employees and guests about using water judiciously.

Pradeep Kalra, Senior Vice-President, Sales & Marketing, Sarovar Hotels Pvt Ltd, said: “In case of water shortage, it is the luxuries that get hit first. We turn down the temperature in hot water showers and make it lukewarm so that guests don’t take long showers.”

Sarovar Hotels manages and franchises over 60 operational hotels in 45 cities across India and overseas.

Crist Inman, Executive Director of Raxa Collective, said: “It is a fact that people on vacation use more water than at home.”

Raxa Collective is a management company that also serves as a brand under which Muthoot Leisure and Hospitality Services resorts are affiliated and marketed.

The company has invested nearly ₹1 lakh per guest/bed on water harvesting as a long-term solution.

Inman added: “If monsoons are deficient, guests will be made aware of a water shortage but luxuries such as spa and hot showers are not going to be compromised, as that hampers the customer experience. We will not restrict the consumption of water but operate in a conscious manner.”

HR challenges In addition to operational woes, the industry could also face HR-related challenges.

Rishi Puri, Vice-President, Lords Hotels and Resorts, said: “A bad monsoon or drought is a direct signal to ground level staff to go back to their villages and help the family during the crisis. We now have our own institute through which we overcome the HR challenge faced.”

Puri added that the company resorts to tankers in case of a water shortage. Repair and machinery costs also go up as use of hard water translates into tougher cleaning of overhead showers and filters.

In such circumstances, the company uses laundry with the maximum load, apart from utilising Sewage Treatment Plant (STP) water for gardening. “While our profitability can get hit by 8-11 per cent, we will not resort to a tariff hike. The situation will be reviewed on a quarter-to-quarter basis,” Puri said.

Kalra said a bad monsoon could affect Sarovar Hotels’ gross operating margin by 10-12 per cent and bring down occupancy by 5-15 per cent, but the Government seems much better prepared than in the past to tackle a drought-like situation, if it arises.

“In the South, things seem to be looking up now. We see no sign of the El Nino effect,” said Ian Dubier, General Manager, Taj Club House. The 220-room hotel has been reporting around 65-70 per cent occupancy of late.

“Our banqueting too is doing good,” he said. According to him, occupancy has been dominated by domestic business travellers.

Peak season “More than 60 per cent of our guests are domestic travellers. Maybe in the next few months, the ratio may get skewed in favour of foreign tourists as the peak tourist season begins by October,” he pointed out.

But, room bookings have not started yet. Of late, he said, the lead period has shrunk to just a month or even lesser — bookings are often done just a weeks in advance. “So, we will be able to see any concrete trend only by October,” Dubier added.

T Nataraajan, Honorary Secretary, South India Hotel and Restaurant Association, and CEO of GRT Hotels & Resorts, too echoes the same point of view. “Deviation in monsoon? No, I do not see any threat as of now.

“Only news on rape incidents or any other violence will take its toll on flow of foreign tourists,” he said. However, he added that corporate travel is yet to pick up, and not too many major conferences are happening.

MICE is slow Despite availability of facilities such as big conference halls for conventions and plenty of quality rooms, MICE (meetings, incentives, conferences and exhibitions) tourism is yet happen in a big way.

“But, somehow I am not able to connect monsoon failure with the hospitality business in the immediate horizon,” he added.

(With inputs from R Ravikumar, Chennai)

This is the final part of a series on how India Inc is responding to the monsoon situation.

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