The Coronavirus pandemic has hit the hospitality industry hard. So, what will the future look like? OYO CEO Ritesh Agarwal weighs in...
It will be a long time before anyone thinks of travelling overseas, for a vacation or otherwise. The future of the hospitality industry seems rather uncertain, but is there something to look forward to? Entrepreneur magazine recently hosted a webinar with Ritesh Agarwal, CEO, OYO, to discuss the future of the hotel and hospitality industry, and attempted to look beyond the circumstances brought on by the Coronavirus pandemic.
Agarwal began the talk by pointing out that the spirit and politeness of the hospitality industry is not going anywhere, even if the smiling faces are now hidden behind masks. “The hotel experience is going to look completely different from how it was earlier. You will see circles and markings when you enter a hotel. The staff will try to avoid touching almost everything. When you enter your room, besides a basket of fruits, you will see a sanitiser bottle. When you enter your washroom, you will see... that there was sanitisation there.”
He referenced his LinkedIn post in which he had talked about Goa being the new Thailand, and that the domestic tourism industry will boom. “Instead of taking a flight, people might take alternatives, such as a road trip with a car. From a hotel owner’s perspective, this is a tough time, but we’re fortunate to have a sizable balance sheet which can see us through... A small hotel owner in Mumbai, or Delhi, might have only, say, two-three months of cash to tide over the lockdown period.”
“I'm very thankful to the MSME program introduced by the government. That will ensure that some of our hotel partners get some benefit in the near future, in terms of liquidity. The second thing is being able to get demand and reduce costs, and bringing workers back at the same time."
Agarwal added that many entrepreneurs might be shying away from the hospitality, or travel industry, as potential fields to start their businesses in. “Think of it as short term pain for long term gain. Right now, industries like pharmaceuticals and a few others are booming, therefore, entrepreneurs might be naturally drawn towards them. But as far as hospitality is concerned, the question is not whether or not it will recover, the question is when.”
He reiterates his belief in personalising a consumer experience, but concedes that more parts of the industry might become automated now. “We have nearly 19,000 OYO properties in India. If any of those areas are declared containment zones, the revenue and operations should get immediately redesigned. Internationally, the industry in China has seen some improvement. In Southeast Asia, primarily Vietnam and Malaysia, we have seen some improvement, as well. So, across the world, there are signs of improvement in this industry.”
Agarwal adds that in these circumstances, cash is king. “Please focus on cash and liquidity,” he urged small business owners. “It will also be critical for you to ensure that you have partners, banks, etc. Keep talking to them as much as you can, and share your situation with full honesty, and work with them to find solutions to problems. Remember, tough times is when great companies are built. I believe that people who start companies now will be the people who will also potentially create some of the most successful companies in the world.” He said that job losses could actually be an opportunity for some to branch out and start their own businesses.