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Approach 2022 with shock absorbers, says travel industry expert Saurabh Rai (Ld)

Amazon is a tech company and is leading e-commerce worldwide, but that doesn’t mean brick and mortar doesn’t exist. Same with Byjus, it’s an edu-tech company that is huge, but on-ground traditional education is still the preferred choice.

IANS | New Delhi |

Hospitality and tourism have been some of the hardest hit industries by Covid, and its impact continues to disrupt travel across the globe. During this crisis Preferred Hotels & Resorts launched Beyond Green, a purpose-driven hospitality brand. It also added 30 new member hotels in just 7 months to its global portfolio, and made enhancements to the company’s loyalty program.

IANSlife caught up with Saurabh Rai, Executive Vice President – South & South East Asia, Middle East, Africa & Australasia, Preferred Hotels & Resorts (PHR) along with Seema Roy, Area Managing Director – South Asia, Middle East & Africa at PHR to get an outlook on the industry for 2022.

Read Excerpts:

The hospitality industry had its hopes pinned on revenge travelling and boom in 2022; but with new variants creating havoc across the world, is the industry’s mood still optimistic?

Rai: While we take a 12-month view for the completion of the books of finance, in reality it is a quarterly forecast and a quarterly review of things, because about 90 days is as far as you can plan to ensure you’re on point. In keeping with the pandemic scenario, it is just so drastically moving that you have to basically shorten the term, so there are stub strategies quarter-on-quarter.

The most important thing and second aspect when approaching our business is to do with agility. Many of our enterprises have been agile. There is something very profound in today’s world about not taking too much time in planning and preparation, because if you plan long term, by the time you get down to execution, you will find that more than half of them become irrelevant or outdated because of the speed of change.

2022 is going to be about staying resilient. Maintain your limbo and agility. There will be sudden slides and quick sparks and a timely response to the frequency of the opportunity, will help you ride the curves. You have to just go with all these crazy fluctuations, and hope that the average median level of travel across 2022 comes simmering down to a point that one may consider acceptable in terms of business returns, allowing us to pay salaries, retaining people, and staying intact. That’s it for 2022.

2021 was even more chaotic and complex than 2020, so I think once bitten twice shy, we are wiser from that experience. As our group walks into 2022, we do so with a very real set of expectations, with eyes wide open, no exaggerations or hopes but with multiple shock absorbers, this is how we are approaching 2022.

Domestic travel for 2021 has more than compensated for the lack of international tourism in India, with hotels running at full capacity and rates revised to pre-pandemic times. Do you think this trend has encouraged the Indian traveler to explore his or her own backyard, and will this continue?

Rai: I think so, because if you look at countries in the West, they have a very rich domestic travel base. Countries like US, China, Australia, South Africa and even the EU as a region have a huge domestic travel market, the vastness and diversity of experience these destinations offer from within their own regions is absolutely amazing for the domestic traveler.

I think when it comes to Indians, all of us would agree for 5 -7 day holidays, extended weekends or school breaks, its very common for us to travel within a 5-hour flying radius to places like Thailand, Malaysia, Singapore and Dubai. These countries have invested in attracting tourism from India and have benefitted more from it than India has. So Madhya Pradesh, Tamil Nadu, Karnataka or Assam have so much history, food and local experiences to offer, that I think there is a lot going on for the Indian domestic travel product. Simply put it needs to be focused on and invested in.

In industry terms Covid has been our best CMO (Chief Marketing Officer), in terms of teaching us to be be able to market most of our hotels and destinations; what some accomplished professionals couldn’t do, COVID stressors has forced them to do and put them on the map.

I do believe that the momentum is like we’ve never seen it before. I think hotels, State tourism boards, the entire travel and tourism ecosystem needs to do its job well, we cannot take this demand for granted! The experience has to be enriched, the experience has to be organised and the experience has to deliver a good value for money product for the domestic wallet within India. With these three components I do believe that domestic demand is sustainable and the size of the market is massive so this is critical.

Many hospitality chains have used this time to their advantage to acquire new properties and develop smaller destinations, what is the idea behind this?

Rai: Sri Lanka has a tiny population, Thailand has millions of visitors, if you look at the sizeable population and disposable income of those who travel every 3 months, even that is in tens of hundreds of millions, so we are talking about a huge base as long as we can organise the experiences and deliver a value for the buck.

People have had nowhere to go for over two years, so they visited inbound destinations, hotels have charged all kinds of rates, many of us have paid those rates in domestic hotels which go into tens of thousands, or over a lakh per night. People are paying that kind of money. Some leisure properties across the country have furnished their highest ever occupancies at their average daily rate; is this occupancy sustainable? I believe the answer is yes, because the market size is huge. But are the rates sustainable? The answer is no! They are overheated rates, and if they have to compete for the domestic traveler when international boundaries are open, they will not succeed. However, this does not mean they have to plummet down their rates to pre-pandemic levels, the sweet spot is somewhere in the middle.

The owners and managers of the assets need to start thinking at what price point do you remain competitive and yet deliver a good value product; value in terms of the right price for the right benefits. At such a high price point, you need to bear the responsibility of being an ambassador for the destination, you have to represent the best of local experiences, and everything needs to be the absolute best or at least the best in class.

With sustainable travel being in focus, Preferred Hotels & Resorts’ launch of Beyond Green is well timed?

Seema: It couldn’t have been a better time, we worked through those early pandemic months to launch Beyond Green in April 2021, with sustainability at its core, committed to building a better and brighter future for people and the planet. It features a global portfolio of 30 hotels, resorts, and lodges that exemplify sustainability in action.

From a development perspective, the key object is to bring leaders in the hospitality space that have sustainability at the core and centre of everything they do. It’s not just about giving back to the planet but all the pillars of sustainability, so community as well as preserving local traditions and heritage. As far as properties are concerned, all the boxes and the indicators of UN sustainability are what we consider as our guideline. As long as properties come good on these, they are accepted into the programme. It is probably the first of its kind in the hospitality space, there are lot of eco tourism companies for responsible travel but from a hotel’s perspective there wasn’t a brand that was charging forward in this space.

Beyond Green comes from the passion of the owners and we have exciting properties in the pipeline. It couldn’t have been a better time for the launch of Beyond Green.

You’ve included a total of 30 new member hotels in the global portfolio in 7 months, please share the idea behind the expansion.

Rai: The number of relationships that have been renewed is 20+ hotels in 2021 alone, so it’s a stupendous achievement for all of us and the team led by Seema, as well as for other regions. It also goes to show how progressive thinking aligns with the future and leads to opportunities. The progressive thinking our hotel owners and leaders have displayed has been very inspiring, and our commitment is demonstrated by the retention and renewal of properties.

The region we oversee is South Asia, the Middle East and Africa and we have brought on board new properties, and new Beyond Green properties, furnishing the fastest growth of the region, led by Africa and the Middle East. In India there are The Leela Bhartiya City, Bengaluru and The Park Kolkata. We have made a foray into Nepal with Kathmandu which is our latest entry, assigned as of November 2021. We also have some very promising discussions taking place in India, Sri Lanka and Maldives.

We are very hopeful about things and there is a great sense of optimism. Whilst the industry remains under stress, the stakeholders and the peer group haven’t shied away in making positive investments into the future, looking beyond the current state of affairs.

With platforms like Airbnb taking a large part of the market share, do you see the future of travel as very different from how we know it?

Rai: So there has been a catalytic disruption within our industry but the market size is big enough for various models to co-exist. This is not a winner takes all, there is enough and more for everybody. There are 2-3 very different sub categories of the kind and nature of hospitality that exist in the travel business today. You can choose which category you want to play in. You have to decide what sub segment of the travel universe you are, and then get inspired to be the market leader and trend setter on that turf.

Amazon is a tech company and is leading e-commerce worldwide, but that doesn’t mean brick and mortar doesn’t exist. Same with Byjus, it’s an edu-tech company that is huge, but on-ground traditional education is still the preferred choice.

Such evolutions and such disruptions are the biggest gift to the industry, it forces everybody to innovate and to recognise the changing realities. Changing marketplaces, changing consumer buying preferences makes everyone move with the times. Millennials and Gen Z are the centre of this change, for them sustainability is a top priority. So I think Airbnb has defined a new genre of experience within the industry. They are not a hospitality company, they are a tech company. They are a mediator connecting available experiences and accommodation to travelers with specific needs.