In an exclusive interview with Travel And Tour World, Ajit Shah, F&B Angel Investor and Designated Partner, White Panda Hospitality explains the recent changes in hospitality sector.
Travel And Tour World: Tell us about the hospitality industry in India?
Ajit Shah: The hospitality industry in India has a very wide spectrum of businesses which includes hotels, palaces, and exotic resorts across every state of the country. The restaurant and catering industries also come under the broad umbrella of hospitality. As this industry has been significantly growing year on year, cultural lines across territories seem to have become blurred. Moreover, with evolving customer preferences, restaurants have been coming up with different concepts and cuisines. This has motivated people to experience new dishes and evolve their palettes.
At the moment, like every other industry, the hospitality industry has also suffered a setback due to the pandemic. Given the current circumstances, the industry is under a lot of pressure as revenue structures have deteriorated. However, things are starting to ease now, and the industry is persistently revamping and innovating itself in line with the shifting dynamics after 18 months of hardship.
Travel And Tour World: Can you enlighten us about the recent changes in global hospitality industry in post pandemic time?
Ajit Shah: Post the second wave, there has been so many limitations and restrictions on travel and tourism, and there are limited places one can go to. Most people haven’t moved out of their homes in the longest time to keep themselves and their families as safe as possible. The hospitality industry, which used to be the largest revenue generating industry globally, is now under immense pressure because of lack of customer movement, thus resulting in minimal revenue generation. Furthermore, a lot of people have lost their jobs and closed their businesses due to lack of working capital. We have seen a shift from customers coming to a property for leisure, to service providers reaching out to the customer themselves. Moreover, during the pandemic, the billion-dollar wedding industry in which food and hospitality holds a major share, was immensely impacted during the peak wedding months. All corporate events have also been downsized.
Having said that, during the upcoming wedding and festive season, I am confident the industry will see a rising curve that will be beyond anything we have seen in the past few years. With the coronavirus cases going down and more and more people getting vaccinated, the demand curve is going to go through the roof.
Travel And Tour World: What are the challenges right now the hospitality industry now facing?
Ajit Shah: The challenges in the hospitality industry are countless. These are unprecedented times, and every single person is having to adapt to the new normal. The major challenges to the industry include generating revenues and ensuring transportation of raw materials. Transporting raw materials across borders is one of the biggest obstacles since there are so many restrictions on import and exports due to the pandemic. There is a shortage of a lot of raw materials which are imported in our country. The fact that people are forced to remain in their current locations and are unable or unwilling to take the risk to move around has had a huge negative impact on the hospitality industry. Moreover, the industry’s feeling of helplessness has been aggravated by the fact that the Indian government has not offered much help to struggling restaurants, even though many other countries have treated restaurants as small businesses eligible for government emergency funds.
Travel And Tour World: How are the restaurants and luxury hotels working to regenerate the economic area?
Ajit Shah: There’s a saying- “Falling down is part of life, getting back up is living.” The same holds true for the hospitality industry. With the onset of the pandemic, a lot of the small-time businesses had started to exit the industry in 2020 itself, so there was already less competition in the market. The few who persevered are the ones who have seen business lows and highs and know how to deal with difficult situations. Overall, industry leaders have become a little less risk-averse and take more calculated decisions and have cut down extra costs. Most companies have become leaner, more efficient; hence, existence and survival ability has gone up. To recover from the setbacks due to the pandemic, the restaurant industry is working towards updating operating procedures, reactivating customers to bring them back into restaurant dining rooms, adjusting menus to address shifts in customer habits and preferences, and enhancing delivery capabilities. As an angel investor and partner at White Panda Hospitality, I have also realised that landlords are becoming reasonable with the passage of time. They have realised that the rents they were charging earlier were too high given the existing circumstances. All these efforts together should help stabilize and regenerate the restaurant industry.
Travel And Tour World: How the hospitality industry survived in this pandemic?
Ajit Shah: Overall, I think the industry survived because of the strong financial backing it has had over the years. Due to this financial backing, most of the functional restaurants had either started home delivery or take-away services during the pandemic. This helped them get the working capital in rotation for their employees and to keep the business running instead of needing to shut shop. Loss-making restaurants which could not have sustained themselves are no longer in business but the ones who did survive have become lean and efficient and are here to stay for a long time now!
Travel And Tour World: Do you think that the vaccination and reopening of international borders can make the rebirth of hospitality industry?
Ajit Shah: The hospitality industry thrives on globalism, travel, and international exposure. It cannot survive on local demand. Therefore, I believe that vaccinating people and the reopening of international borders is the key to reviving this industry. Both these initiatives together will enable people to start moving across borders once again and help revive the tourism and hospitality industries.
Travel And Tour World: What are the recent trends the hospitality industry has seen in this field, in your opinion?
Ajit Shah: The hospitality industry is now looking at minimising operational costs by including contractual labour, revenue-based rent payment systems and reducing fixed costs. In addition to minimising fixed costs, restaurant management needs to undertake continuous planning with ever-changing circumstances and ever-changing tastes of millennials. Furthermore, due to the barriers in import of raw materials due to which restaurants are facing shortage, I believe menus should be revised and crafted keeping in mind local Indian produce. This would reduce our dependence on international markets and increase our dependence on Indian agricultural supplies which includes fresh organic plantation and Indian spices. This will give chefs an innovative platter to prepare varied fusion menus, thereby giving India an international window and presence.
On the HR front, the industry is going into contractual staffing rather than full time staffing. These kinds of actions should help the industry get back on its feet. Personally, I feel we should also prepare for the worst and equip ourselves in the most efficient manner to pull through another wave, if at all that situation arises.