“Tough times won’t last”

M P Purushothaman
President, Federation of Hotel & Restaurant Associations of India (FHRAI)

Many hoteliers are already operating in collaboration with airlines, travel agents etc. for package offers, not only for tourists but also on groups, meetings as well as wedding promotions

Dr Manmohan Singh, Hon’ble Prime Minister of India and a noted monetary Economist, while commenting on the global economic crisis stated that, “countries are now linked through trade and investment with each other and the global economic slow down is likely to affect every nation. The regulations and control systems in India have still not opened fully to the global perils and are insulated to a great extent.” This sums up the Indian economic situation better than any analysis. The Indian economics’ fundamentals are sound and there is little doubt that the global recession is not going to have a lasting effect on India’s hospitality industry.

The Indian Hotel Market Outlook Report, India Digest 2008 (brought out by Jones Lang LaSalle Hotels, a market leader in hotel investment and advisory services) states in an assuring manner the impact is expected to be short term. The Indian economy has withstood such upheavals in the past so there is nothing to panic about. I compliment the Union Government for having moved fast by taking proper steps to check the impact of the global meltdown on India. 

Organisations that want to effectively take note of the recessionary trends and protect their business will have to take on some hard decisions on the business front like back-to-basic kind of planning, and ensure that input costs are maintained at levels that would continue to give them the profit margins without sacrificing the quality of delivery or the products. 

The hospitality industry should work on training, preventive maintenance, multi-skilling, employee exposure, cross training and such measures that are non-financial and would enhance guest satisfaction. Staff retrenchment, cost cutting, travel and advertisement cuts may show savings in the short run but would certainly damage the long term growth of the hospitality industry. The next 18 to 24 months are testing times for the hospitality industry, but the hoteliers with a proven track record will take things in their stride and come out of the recession with better learning and experience. 

Another opportunity before the hoteliers is to look at options of joint promotions. Many hoteliers are already operating in collaboration with airlines, travel agents etc. for package offers, not only for tourists but also on groups, meetings as well as wedding promotions. Hotels have also associated with car rentals, travel portals and airline networks. This is expected to help ease the recessionary cascading effect. 

India’s domestic tourism potential is large and the present times offer an excellent opportunity to devise attractive packages of accommodation, sight seeing and travel arrangements. Hoteliers can join hands with State tourism boards and other private operators and take full advantage of the hitherto unexploited domestic tourism potential.

We must take heart from the fact that international tourists still prefer India and do not consider India as an unsafe destination to travel despite the recent terrorist-related incidents. Ups and downs have always been part of the tourism industry. With the baton of the Commonwealth Games 2010 being passed on to India, and the hotel industry increasing its rooms, things will definitely start looking up in a few months from now. 

We must understand that in the global context, given India’s potential as a tourist destination, the demand fundamentals are extremely good. Increased interest in the Indian markets, improved international access coupled with the modernizing of major airports will definitely boost inbound travel to India.

December 2008

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