Hoteliers say travellers are back with vengeance but employees are limited

As travel demand continues to recover post the COVID-19 pandemic, the global tourism economy is expected to grow at 5 percent, which is double the rate of growth of the global economy, Tourism Secretary Arvind Singh said on Thursday. He, however, said that attrition is a reality in the industry.

Lemon Tree Hotels’ Managing Director Patu Keswani, too, said the industry’s attractiveness has reduced for employees. “We have been trying to hire employees but finding it difficult,” he told CNBC-TV18.

His hotel had 9,000 employees before the pandemic and the number has come down to 4,000-4,500 as many who left their jobs during COVID-19 have left the profession altogether. However, he said that even as productivity has improved about 65 percent presently, he foresees employment to shrink in the future.

Digitisation is the future, and India is at its edge and manpower rationalisation changes in the business model will need to take place, Keswani said.

Bharat Hotels’ Chairperson and Managing Director Jyotsna Suri believes a lot of rationalisation is taking place in manpower, but that won't be able to reach pre-pandemic levels. “Inventory, revenue management along with manpower rationalisation is happening in a big way,” she said.

The experts also emphasised all joining the sector are made familiar with the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) as a part of the induction.

Lemon Tree Hotels’ MD stressed that inflation in the hotel space is double that in other spaces.

He said the next few years would see mergers and acquisitions (M&As) and will focus on getting capital.

He said that Lemon Tree had built nearly 6,000 rooms in the last few years, but the entire debt structure in India makes it difficult to build a hotel on a standalone basis.

"The tourism ministry also wants international guests to stay in premium hotels, for which there is a shortage of rooms," he explained.

Keswani says the hotel industry cannot become a $600 billion industry in the next 10 years without addressing the weakest links like access to finance. Nearly 20-30 percent equity of hotel industry has been lost in the past two years though the sector is witnessing consolidation happening in the branded space

Commenting on demand, the Tourism Secretary said, “If we have a strong middle class, both domestic and international tourism will see growth.”

Bharat Hotels’ Suri said, “We are a very resilient industry, it will organically grow out of this crisis. ECLG scheme's 2nd phase was far more helpful.

She said demand is undoubtedly growing upwards, so little support on some issues will allow the industry to come out of the situation. She pointed out that balance sheets are stretched, and the industry needs to stand on its feet and consolidate before thinking of borrowing any money since interest rates are huge.

“Tier 2 and 3 cities were the first ones to have bounced back,” she noted.

Ranju Alex, Area Vice President - South Asia, Marriott International, also confirmed the trend in the domestic market. She added that Marriott is looking to open 200 plus hotels by 2025, targeting 15 to 20 hotels each year.