What are the most common challenges faced by hotel Industry In India?
The project market of the hotel industry will almost touch the figure of US$ 7.5 billion within 2023. Therefore, it can be analyzed that the market size is relatively large. Apart from that, this market has separate divisions regarding customer services.
Due to such a high market capitalization, the main issue affecting the hotel industry is retaining and hiring staff. It is a full-service-based industry where the market is highly competitive. As a result, a team with better skills and knowledge manages to get better offers from different competitors, affecting service providers’ quality.
Moreover, the impact of COVID-19 is enormous. Therefore, consumers are mainly eyeing the maintenance of health and hygiene. It can be stated that health and hygiene are always concerning factors, but after the impact of COVID-19, customers are much more worried about the issue.
However, small and medium-scale hotels can only spend a little on this segment, affecting customer retention. Moreover, digitalization immensely impacts this industry in this contemporary era so that customers can visit numerous options for online bookings and cancellations.
Here, cancellation of bookings is allowed with zero penalties, which leads other customers not to apply for registration. Later, such cancellations of hotels affected the hotel owners. Further, every individual has different tastes and preferences regarding the availability of services like food, cleanliness, the behavior of employees, etc. It would become difficult for hotel owners to make 100% average.
How have hotels in India adapted to overcome these challenges?
There are three or four common challenges faced by hotel industry, which include retention of employees, maintaining health and hygiene, zero penalties on the cancellation of pre-bookings, and changes in consumer preferences.
Organizations need to ensure a few steps, whereas it can be stated that organizations can incorporate training of the new workforce. It refers to the fact that there should be two workforces, one considered existing and the other considered reserved.
It would help them in the future when employees leave organizations for a better opportunity, and then organizations can use their alternatives to fulfill the gaps. Organizations can also provide a chance to engage the workforce in decision-making.
It helps them understand the staff’s vision and, most importantly, interpersonal communication between employees and employers should be. It creates better bonding, reducing the chance of leaving the organization. Another issue also refers to maintaining health and hygiene factors. Here, hotels can ensure safety protocols by giving vaccinations to staff.
Further, organizations can implement safety protocols like cleaning the floors, washing clothes, and availability of room services at any time. Also, cooking areas should remain clean, ensuring more reliability. Zero-amount charges on the cancellation of pre-bookings are another issue faced by hotels in recent times.
However, hotels can charge security money for the time off for allocating rooms. Further, zero charges on cancellations are only applied if it is conducted 12 hours before allotment. In such cases, hotels can switch such allotted rooms to other customers. Finally, changes in consumer preferences are another issue, and hotels should constantly provide services. It would create brand awareness so those interested customers can only avail of services.
What impact have recent government policies had on the hotel industry in India?
The hotel industry is always lucrative, so the Government deals with it very sensitively. Generally, a few actions are commonly prohibited, like not using hotel rooms as brothels, having no permission to have alcohol without being permitted by law, and so on.
Apart from that, both the State and Central Governments incorporate various policies, whereas the initiatives of the Central Government are,
They have initiated proposals to have FDI on tourism. However, India is considered one of the major countries for investment in tourism. Here, such an opportunity for tourism enlightens the scope of business.
Apart from that, the Government of India also reduces the number of licenses required to register hotels. Further, hotels those are providing rare facilities to tourists for medical tourism should be entitled to get unique benefits.
They have already made policies to promote rural homestays because the Government believes artificial nature can attract people.
The Central Government also observed that every state has its tourism brand, so they have collaborated with each. For example, the Ministry of Road Transport and Highways permits tourists to stay in India for 30 days, where tourists can visit any part of India.
Further, the Government male collaboration with various departments like Indian Railways for Bharat Darshan Tourist Trains
The initiatives of various State Governments are,
- The state Government of Tripura initiates a private and public partnership with hotel management institutes to empower youths.
- The State of Tamil Nadu incorporates new infrastructure rods, electricity, lights, and loans for renovating hotels.
- The state of West Bengal provides land on the northern side for promoting offbeat places.
How has the pandemic affected the hotel industry in India?
It can be stated that the COVID pandemic suddenly spread throughout the globe. Therefore, hotel owners need predictions regarding eradicating challenges and finding possible solutions. However, in a general sense, hotels can be divided into two segments: common purpose and luxurious purpose (tourism and entertainment).
Hotels are closed during the pandemic, so one of the impacts of this pandemic is the mass cancellation of pre-bookings. Apart from that, there is a Government restriction on opening hotels during the pandemic. Therefore, hotels need an opportunity to earn money.
In such circumstances, they have to manage the workforce. Hotels must pay salaries and basic pay to manage the workforce and maintain brand value. As a result, organizations are going through unnecessary cost operations. Here, hotels have to pay regular salaries to their employees and maintenance.
However, only some hotels paid 50% of their wages, but such cost operations negatively impacted the business.
Additionally, regular hotels get essential flexibilities to open, giving them an opportunity for basic earnings. However, luxurious hotels in tourist places face massive restrictions because tourists are not allowed to visit. Apart from that, International flights are also being called off by the Government, so hotels nearby well-known tourist spots face significant losses.
What measures can hotels in India take to attract more customers and increase revenue?
Increasing revenue is considered as the prime goals in business after survival. Here, hotel organization incorporates a few measures to increase revenues,
- At first, they have to understand their categories whether they are regular or luxurious hotels. If it is standard hotels located in office areas then such organizations have to understand their targeted customers and make their pricing strategies concerning them.
- Also, luxurious hotels must focus on different skills like cooking, administration, cleaning, maintenance, etc. However, organizations are making separate USP provides special facilities which free drop and pickup, free tourist guide for customers.
- Another step can be implemented that is giving discounts. Different types of deals can be provided, such as discounts on the first visit, discounts on regular visits, discounts on occasions, discounts for couples, and so on. It would help them to create brand awareness and retention of customers which definitely increase profits.
Moreover, hotel institutions can ask for referrals from their existing customers, and they can also call for old customers for tourism.
In recent times, it is also important to tie up hotels in different websites to promote hotel brands which includes trivago, Make my trip, etc.
Are there any innovative solutions being implemented in the hotel industry in India to address these challenges?
There is a huge market size with different targeted customers in the hotel industry. Therefore, it is essential to capitalize the market by increasing revenue. First, organizations have to provide basic amenities along with a luxury ambiance. Additionally, they have to incorporate different price charts for other targeted customers. As a result, organizations can increase the market size.
Retention of staff
Retention of employees is challenging in this highly competitive market. However, a skilled workforce has a particular demand. Therefore, hotel institutions can collaborate with management schools. It helps them to get an easy opportunity to get an alternative workforce without investment. Apart from that, they can also make agreements with their employees. Therefore, termination of employees would provide nominal financial benefits for them.
For the hotel industry, brand awareness is always a sensitive fact. Organizations might incorporate social media like FB and Instagram pages to promote themselves. Additionally, they can enlist their names under websites like Trivago and Make my trip for an easy opportunity to get customers.
What role do technology and digital marketing play in helping hotels in India overcome challenges and stay competitive?
In recent times, people have loved to stay on social media. It helps to connect people through virtual mediums. However, social media refers to an easy and effective approach in the case of promotion of branding in Facebook, Instagram. Here, hotel institutions promote their brands and communicate with their customers. Additionally, social media influencers are also there where organizations can promote their brands.
Due to the impact of technology, hotel organizations can enlist their names under travel websites. In recent times, it is considered as one of lucrative options to get clients.
To handle the social, it should have quality content considering videos, photos and articles are required. Organizations can hire them by using social media. It would help to avoid unnecessary cost operations.
Internet traffic is always an essential aspect in the contemporary era. However, SEO is essential to engage internet traffic. It would create a chance for the organization to convert visitors as customers.