2020 will leave its mark in history - as a year that altered lives and businesses, and reshaped the travel and hospitality landscape forever. The pandemic posed an unprecedented challenge and created a new, altered reality. Of all industries, travel was the worst hit. The first quarter of FY21 was a washout, as travel for both work and leisure came to a complete halt. With technology enabling remote working and several companies actively fostering work-from-home ethos, things were looking quite bleak for the hospitality industry.
As one of the fastest growing sectors in the Indian economy, tourism contributes 9.2 per cent of the country's GDP, and generates 43 million jobs, which constitutes 8 per cent of India's overall employment. Tourism, therefore, is a very powerful instrument of income and employment generation with a multiplier effect that accelerates sustainable human development. It is integral to a nation's prosperity and development.
It was, therefore, crucial for the travel and tourism industry to adapt to the 'new normal' and keep moving forward. A few patterns started emerging rapidly. Big brands like ours were going to be looked at through a lens of amplified trust for safety standards. Domestic and regional travel revived faster. Road travel was preferred over train and air travel in the initial period. Staycations at hotels and resorts in large cities worked well. And hoteliers began to explore alternative and new sources of revenues such as cloud kitchens, home deliveries, food apps and laundry services, to name a few.
Before Covid-19 upended the globe, we, at IHCL, had quite a buoyant plan for the upcoming year. Having delivered nine quarters of margin expansion and profitability, we were looking to further expand and strengthen IHCL's hospitality ecosystem. The crisis disrupted the momentum and forced us to reinvent and reimagine our business. Innovation took lead, and we explored new avenues of revenue growth. As they say, every cloud has a silver lining, and every crisis is an opportunity for unexpected growth and fresh learning.
Displaying agility and rapid thinking, we tapped into changing customer requirements by developing new products and offerings -gourmet food delivery, staycations, workcations, driving holidays and alfresco dining experiences, albeit with all-new travel expectations such as digital check-ins and menus, private villas, and curated packages that offered exclusivity and safety. With renewed focus on overall health and wellbeing, we also launched wellness retreats to harness the growing demand for digital detox and holistic health.
Innovation coupled with synergies within the Tata Group also saw the launch of Qmin - a repertoire of culinary experiences and gourmet food delivery with its own Qmin App - a first in the industry by an Indian hospitality brand, across 13 cities. Qmin has now expanded to the offline segment with the launch of the first gourmet Qmin Shop in Mumbai, with many more in the pipeline. During times of hardship and enforced curtailment and confinement, the specially curated menus offer reasonably-priced fine dining options.
Given the demand for exclusive and longer-duration stays, we accelerated the expansion of our homestay brand, ama Stays & Trails. We now have 25 bungalows in some very interesting locations such as Goa, Coorg, Lonavala, Kodaikanal and Trivandrum, to name a few.
With intimate social gatherings following due safety regulations slowly beginning to take shape again, we have recently launched a new and exclusive proposition called Rendezvous by Chambers, our much-coveted business club. These are a series of curated events involving entertainment, engaging speakers and epicurean events.
All of the above were developed on the basis of insights and in-depth analysis of how consumption patterns have evolved and are continuing to change.
Building Consumer Confidence
While brand trust and loyalty have always been a priority for us at IHCL, it gained newfound importance in these unprecedented times, especially for the travel and hospitality industry. With healthy and safety being key factors, we left no stone unturned in our commitment to provide our guests with the highest standards of safety and hygiene. New SOPs and their stringent implementation among our own staff played a vital role in our ability to carry this across to our guests.
In addition to this and as industry leaders, and also South Asia's largest hospitality company, IHCL launched initiative #TravelForIndia on World Tourism Day. The campaign was rolled out through social media to initiate a dialogue on the significance of tourism.
At IHCL, we were on a path to digital transformation when the pandemic hit. As it progressed, our digital strategy, too, evolved, with a sharp focus on social distancing norms. At our hotels, we implemented ZEST: IHCL's Zero-Touch Service Transformation, a suite of digital solutions. From contactless check-ins and check-outs, digital invoicing, online payment options and QR codes to digital menus in restaurants, the customer journey was made as seamless as possible, without taking away the one singular quality that we as a group have always prided ourselves in, namely "Tajness".
The foundation of an organisation is not only built on its successes, but also on its story of resilience. Embedded in IHCL's DNA is a strong culture of resilience. The pandemic has again brought to fore once again IHCL's resilient spirit. From being the first to offer our assistance to frontline workers and migrant workers with the delivery of around 3 million meals or hosting over 70,000 nights for the medical fraternity, the team always prioritised the community and our guests first.
We also ensured we stayed on track towards our commitment of pioneering new destinations and expanding our portfolio of hotels to cover the length and breadth of India. Despite challenges presented by the pandemic, IHCL has signed 14 hotels this fiscal year and opened seven new hotels and five ama bungalows across the country. The Connaught, New Delhi - IHCL SeleQtions, an iconic hotel, was re-opened in November after extensive renovations, in addition to opening new hotels in Darjeeling and Ahmedabad. This growth extended to our F&B expertise as well, as we re-launched the renovated Machan restaurant in Delhi and opened its first outpost in Bengaluru. We also opened India's first on-site brewpub at our hotel in Bengaluru.
Moving on to the current time and with the recently concluded festive season, we have seen very encouraging occupancy trends across our hotels with business growing month by month. Our leisure hotel portfolio has performed well across destinations such as Goa, Rishikesh, Coorg, Shimla, Bekal, Jaipur, Udaipur, and Jodhpur among others, which were in great demand during the Christmas and New Year's period as well as for destination intimate weddings.
We believe this is a clear indication of two things - people are coming to terms with the situation and looking to venture out for pleasure and make the most of their holidays; and that the hospitality industry can offer a strong enough sense of safety for people to do so. What is more, these months have shown us the value and worth of domestic tourism. With in-bound tourism trickling down over the months, it is the Indian tourist who has emerged as the Big Spender.
Lessons For The Road
The current demand indicators signal a recovery, and the last few months of 2020 have reinforced our belief that tourism and the desire to travel is not going to go out of fashion; and if we can make safety a paramount protocol in our service offerings, more and more people will book that ticket and travel, be it for business or leisure. It has also reinforced the significance of innovation and technology. The key learning for us has been that with stragility - a balanced combination of strategy and agility - one can weather the strongest storms.
As the hope for a vaccination closer home grows, not only will it make travelling safer, but will lead to the rise of travel. With this, the hospitality industry will get fresh wind under its sails.
This pandemic is a stepping stone towards reinventing ourselves and continuing to evolve with the times. At the end, I would like to conclude by saying that in challenging times, hope is not a strategy - perseverance and resilience are.
(The author is MD & CEO, Indian Hotels Company Ltd)