How hotels in India plan to tide through COVID-19

Hotels are using a combination of platforms to reach out to the guests. These include online travel agents among others. hotels in India are offering guests an option to pay now and stay later.

Cash-strapped and bruised by the prolonged lockdown, hotels in India are offering guests an option to pay now and stay later.

The move, top hoteliers said will be a win-win for both.

India's hotel industry may lose Rs 90,000 crore this calendar year, owing to the nationwide lockdown pressed to curb the spread of COVID-19, according to a recent report by HVS and Anarock.

"Occupancies across hotels in key cities witnessed a sharp decline, as travel restrictions intensified and India went into lockdown towards the end of March," the report said.

The new scheme allows guests to stay at a property of their choice on dates that suit them at a competitive price.

For hotel owners in deep crisis due to the COVID-19 pandemic, it will offer some succour and help them meet fixed costs that include salaries, rentals, and other payment obligations. 

Hotels are using a combination of platforms to reach out to the guests.

These include online travel agents (OTAs) such as Makemytrip.com, Booking.com, Goibibo.com, and Cleartrip.com, among others.

Besides listing on the OTAs, several hotels have opted to get themselves enlisted on an open booking platform recently created by Noesis Capital Advisors, a hotel advisory.

The platform called Paytodaystaylater.com allows guests to buy their preferred hotel's credit voucher worth Rs 15,000 at Rs 10,000, which can be used at a later date.

"It's a non-profit initiative aimed at helping hotels generate some liquidity," said Nandivardhan Jain, founder and CEO, Noesis.

Since the creation of the platform, some 150 hotels have come on board and another 300 are expected to join shortly, said Jain.

These include mid-size, luxury to upscale boutique luxury properties.

Owners who have stepped up their engagements with the OTAs and have listed with Paytodaystaylater.com, have moderate expectations.

They, however, see this as a step to get things moving at a time when shuttered hotels have led to zero revenue.

Manu Rishi Guptha, chief executive at Niraamaya Business group, said: "This initiative will help hotels to wade through the tough months from May to October.

"It offers a good cash management technique."

Niraamaya, a hospitality arm of Jupiter Capital, is an upscale boutique resort with properties in Kerala, Nagaland, and Goa.

A three day holiday at Niraamaya that would typically cost Rs 120,000 is now available at half the price.

"The world will go through a economic deflator. It will apply to every single economic activity on this planet.

"So there is no reason to have high ground," said Guptha.

Suhail Kannampilly, CEO, Fern Hotels & Resorts, is encouraged by the initial response of the scheme.

Fern's Mumbai property recently got a four-day corporate booking.

Besides being listed on Makemytrip, all of 4,000 rooms across the country are listed with Noesis.

"It's the first time that we are doing open-ended bookings," said Kannampilly.

He is not expecting a huge volume as people are unsure and non-committal to travel.

But the move "puts the foot in the door", he said.

Dehradun-based Leisure Hotels is also in the process of listing 65 per cent of its properties on Paytodaytstaylater.com and Makemytrip.

It's also creating its own platform for a similar scheme, said Vibhas Prasad, director, Leisure Hotels.

It is also in talks with other travel agents for bulk bookings in the business-to-business (B2B) segment.

"The volumes may not be big enough, but it will at least set the idling inventory in motion," said Prasad.

"We will work with everyone and anyone. At this point, it's all about how can I tailor the package to fit your bill," said Ajay Bakaya, managing director at Sarovar Hotels.

Sarovar plans to list all its 6,400 rooms at its 84 properties across several platforms and offer pay now and stay later scheme.

Out of total revenue loss likely to be faced by the industry, organised operators are estimated to face a revenue loss of over Rs 40,000 crore, according to HVS.