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How hotels are reinventing themselves to stay afloat

- MANU KAUSHIK

Jean-Michel cassé, coo (India and South Asia), AccorHotels, says the world has never been as uncertain as it is today. Even with so much data to pore over, it’s difficult to decide what to do, he says. Nevertheless, the 52 hotel chain has started making city-wise forecasts for its properties, and a new business plan for six months beginning July. “We expect to earn just 50 per cent of the budgeted revenues in third and fourth quarters of 2020. Accor will go for another round of cost-cutting that includes reducing staff strength. Once we reopen hotels – in a staggered way – we expect new types of customers,” he says.

Following the 54-day lockdown announced by the government owing to the coronavirus pandemic, AccorHotels’ business, like that of other hotel chains, has come to a standstill. Even as top bosses work out plans to resume operations, the biggest concern is when and how to restart. This is because if there is limited occupancy in the first few weeks, the cost of running a hotel will be far higher than the cost of keeping it shut. This will further tighten their already-strained liquidity and bring them on the brink of permanent closure. In a recent webinar organised by the Federation of Hotel & Restaurant Associations of India (FHRAI), K.B. Kachru, Chairman Emeritus and Principal Advisor (South Asia), Radisson Hotel Group, said most hotel chains in India don’t have working capital beyond 60 days, which is effectively the entire lockdown period.

“The lockdown has proved to be a double-edged sword for hoteliers. We are advising our hotel partners to hold off openings. Some hotel owners are desperate because they have loans to repay and salaries to pay,” says a senior executive of a hotel management company.