PARTNERS IN PAIN OPERATORS WILL HAVE TO RESTRUCTURE COSTS AND FEE STRUCTURES

As COVID-19 debilitates the hospitality industry, prominent owners offer a perspective on what may be required to chart the journey from the current painful situation to a turnaround

Even in normal times, the owner-operator relationship in the hospitality industry requires walking the tight rope. A post-COVID situation makes the situation a lot more difficult. The relationship a more fraught at a time when hotel occupancy and average daily rates are likely to suffer from continuing travel restrictions, even after the lockdown opens, as well as people who are wary of travelling. Hotels will have to put in place rigid codes of safety and health compliance. Not to mention the added pressure on the bottom-line and revenues.

Sandeep Gupta, MD, Aria Hotels & Consultation Pvt. Ltd (owner of JW Marriott Aerocity) says, “I expect the tourism industry to be badly hit for the next four to five months and the climb back to profitability will be slow. At this stage, we can only hope for containment of the contagion. Post that, we need to step-up national and regional marketing efforts.”

Controlling operating expenses will a topmost priority for an owner. It is unlikely that hotels are going to be able to forecast the cost of running accurately, given how dynamic the business is. Besides, once the lockdown opens and flights resume, hotels will have to experiment and devise new opportunities to attract their patrons back and establish new revenue streams, requiring them to be nimble-footed. That may need some amount of spending.