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The Sinking Hospitality Industry

By 28/12/2020May 12th, 2022No Comments
the hospitality industry

The Hospitality Industry

With international borders sealed, suspension of movement across the country, and the declaration of the nationwide lockdown, the hospitality industry witnessed an unprecedented truncated phase in history. Adding to the persisting nemesis comes panic and dread for travel amongst people.

The hospitality industry feels the heat as travel becomes a long-forgotten phenomenon in this Covid world. The occupancy level of hotels and resorts has hit a major low since the beginning of March as the nervousness and anxiety about the spread of the virus started unfurling throughout the world.

Adding to the tumult, the situation for businesses working on a lease for commercial space has been grim. With bleak chances of revival of business soon, payment of rentals has been one of the most worrisome aspects for many of the business owners in the hospitality sector.

Small to the world is huge to the Hospitality Industry

The hospitality industry has been one of the worst-hit by the pandemic with a shortfall in business and a lack of government stimulus. Closure of food outlets and downsizing operations have been routine since the spread of the virus. The industry has come down to zero revenue in the past three months.

This would customarily lead to the loss of jobs for many in the industry. Food joints have been forced to connect with online food delivery businesses with the hope of some respite. Metropolitan cities, which witnessed business visitors plenty before the pandemic, are anticipated to be ready for tough times ahead.

Revival of Hospitality Sector: Bleak chances in the near future

The hospitality industry despite being the worst hit by the pandemic has received the least stimulus from the government. It is not very soon, that businesses in this sector can be expected to be flourishing afresh. Even with the go from government reopening the industry in June, it would be wrong to expect the situation to get back to normal before November 2020.

The average reset for the entire industry is contemplated to be 12 months, with the major ramp-up of operations that can be expected to arrive by February 2021. The revival period coincides with the off-season period of six months, which is set to commence shortly; and the industry can be expected to only see cash flows improving by the beginning of the next year.

Change of business model for the hotel industry

Post the pandemic, the hotel industry awaits a transformation in operations as well as the setting up of business. Instead of huge properties, developers would be looking forward to small but multiple properties to make the process cost-effective and incur less debt on the balance sheet. Domestic leisure travel facilities could see a boom in business as most people will avoid international vacations for quite some time now.

Drivable destinations would be the go-to place as the hassle of stay could be avoided. Luxury business hotels shall remain in a worrisome position with minimal international travel their operations are not expected to pick until a few months from now.

Hospitality 2.0: The Post Covid Era

The hospitality industry is looking for a way out to kick start business soon after the lockdown. There is a multitude of considerations from operational changes, repurposing property, and maintaining strict hygiene measures before the onset. With many hotels and businesses in the industry being forced to shut down due to the implications of the revenue loss, the industry is hunting for new operational solutions to commence business.

The post-Covid era would expect the industry to enhance its hygiene and sanitization process by opting for more contactless delivery and services. The succeeding times could also witness a revamp of the hotel business model to ensure a safe stay for the customers.

Sonam Chandwani

Sonam Chandwani

Sonam Chandwani is the Managing Partner at KS Legal & associates and heads the firm’s Corporate Litigation Practice.

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