TRAVEL is the bigger picture. Insight of the bigger picture, we need fresh anchors to build our story hereon. The hospitality industry should stop pursuing its alignment with tourism and instead align with travel and infrastructure, as an essential accommodation sector. There is no travel without accommodation. And there is no economy and industry without travel.
The year 2020 will go down in history – not as a year that marked the beginning of a new decade but one that altered the landscape of the world as we once knew it. Like every other industry, big and small, that has felt the shockwaves of the pandemic across the globe, the travel and hospitality industry too has borne the brunt of this unprecedented event, if not more so than others. 2020 began on a high note – with greater emphasis on the industry as a significant contributor to the overall economy, with a 9.2 per cent contribution to the Indian GDP; and employment with an 8.1 per cent contribution to the overall workforce. In 2019, foreign exchange earnings from tourism industry across India amounted to over $ 30 Billion. However, the industry was disrupted without prior notice, by the pandemic in March 2020. In India, the complete shut-down followed by an economic slow-down is seeing long term ripple effects through the sector, with current trends indicating only 30 per cent of occupancy in hotels till the start of 2021, with hotels seeing an 80 per cent to 85 per cent erosion in revenue streams. With the entire value chain linked to travel and tourism estimated to lose ~₹ 5 lakh crore or US$ 65.57 billion, with the organized sector alone likely to lose US$ 25 billion; the impact is being felt across the over 60 million jobs that the sector creates.
With all data pointing towards the pivotal role the travel and hospitality industry plays in the overall contribution to the Indian economy and employment, it is therefore perplexing that the status and future security of the industry hangs in question as we inch towards the end of 2020. While the industry and its players, big and small, have shown tremendous fortitude through collaborative and innovative efforts to steady the sector’s performance even in rocky waters, while opening their purses and doors to help the community during this time of great need, the question still remains.
Did it fail in getting its due recognition and where did the industry’s associations and their leadership fall short, if they at all did, when it came to addressing the industry’s woes and requirements in these times? While the overall sentiment was hopeful post May, when the country began unlocking gradually, with a high-octane expectancy that something significant and tangible will come to fruition to soften the blow for the industry; the non-occurrence of any action of consequence in the following months to date has led to a pall of disillusionment.
Perhaps it is time to do some real stock taking. Yes, tourism got a big miss, as did aviation and hospitality. But the answer came loud and clear from none other than the FM herself, that there was NO sector specific announcements although the government claimed to have looked uniformly across the economy and industries. A few specific sector corrections were undertaken at a later stage, however, our industry did not feature among them.
At ground level, it appears that banks did not consider hospitality a safe bet in the near future given the dynamic situation. While the debate continues, insiders admit it is likely to be a long haul, and while many other sectors are seeing traction, tourism is not. Indeed, regular travel is witnessing ups and downs, making the present situation choppy, to say the least. Should banks have a contrary view? It is a hard perspective, but everybody is cautious, and there are enough bad debts across sectors.
As far as industry leadership is concerned, it must be noted that every association and their leadership put in a united representation towards the continued survival of the sector. No effort was spared. And while there may not have been visible viable outcomes for the industry to date, it did bring the industry together as one.
The bigger question is what makes “tourism” to be viewed as pure leisure and luxury activity, thereby being sidelined as low priority at a time when lakhs of migrant workers were heading back home. How could then, tourism be singled out as a must have? It is not about creating jobs, being the lifeline of the economy – other sectors also employ people, cutting across social and economic strata, it is not only tourism! So, if the industry was looking for an index of how important it was, it got the answer it has always known, it got only reinforced. That in a country of India’s diversity and complexity, tourism is still ‘sair sapatta’. Nothing more, nothing less. And indeed, tourism is just that. So, where is the catch?
It is the realization that the hospitality industry does not fall within the gambit of just ‘tourism’. That we have latched upon the wrong handle. That hotels are in the true sense, essential services just as much as hospitals, schools and colleges. That hotels are essential infrastructure. My learning from 2020 is that hotels have aligned their fortunes onto the wrong bandwagon, that of tourism. Hotels need to re-position themselves as basic amenities at the heart of the travel scene that the PM spoke about so eloquently in his Varanasi address only a few days ago.
My belief and understanding is that hotels are just as important as airports, railways or roads. Travel is essential for any economy, it is perhaps the core activity of any nation on the move, literally. And one cannot travel without accommodation. So, should hotels rename themselves as accommodation industry?
My second learning is that we need to ensure that an expanded understanding of hotels is driven home to the policy makers. Travel is no longer a leisure activity often mistaken as entertainment for the privileged as it once was. It has become extensive into diverse hospitality streams, such as bread and breakfast, co-living spaces, student accommodation, and so much more. We are best advised to look inwards, accept that some nomenclatures have not worked, and we must embrace the larger picture.
My sense if that we must chase the travel picture and allow tourism to be the automatic gainer. Travel needs accommodation and that is where the story should focus on in 2021.
So, coming back to where we started. Did we as an industry and leadership fail? Yes and no, both.
Yes, we went and did hara-kiri by quoting examples of what nations such as Singapore were doing and what Europe was doing. Making power point presentations on what the developed world was doing, where social security systems were firmly in place for decades, and where travel and tourism had evolved over time. These were advanced economies with little poverty to talk of, like we have in our country. Yes, in not reading the writing on the wall correctly.
No, in the sense these were the only facts that we were aware of, in the beginning of the crisis, and that is what the government is also used to hearing. So, we were only quoting examples that we had grown up listening, for years. But this was not the answer.
Let 2020 be the wake-up year, when we shift gears, and move into another trajectory. That TRAVEL is the bigger picture. As an industry let us ride over our fixation for the star culture, which unfortunately we still nurse. In sight of the bigger picture, we need fresh anchors to build our story hereon.
My other submission is that the hospitality industry should stop pursuing its alignment with tourism and instead align with travel and infrastructure, as an essential accommodation sector. There is no travel without accommodation. And there is no economy and industry without travel.
For starters, the accommodation industry needs industry status. And this is where the new story should begin. With this one single move, a dramatic change will happen that will benefit the hospitality sector across segments. It will reduce overall cost of operations and make the industry viable and sustainable. If it is a state subject, let industry associations (those in the hospitality segment) take the example of the Maharashtra government while appealing to other state governments. Let them take this up as a single point agenda. The other is to seek recognition as an essential infrastructure activity which would position itself as travel, and not within tourism, which is indeed a small part of the overall business.