Home Spotlight Where there is despair, there is hope too!

Where there is despair, there is hope too!

As India continues to face challenges posed by the COVID-19 crisis, there is still potential for recovery in the travel and tourism sector and which can be possible, if harnessed in a diligent and effective way.

Prateek Hira

After being locked we entered the phase of unlocking and now we are fast moving towards the phase of being lockless. At work, there was a time when even plain enquiries had stopped, there were no e-mails at all to be answered but slowly all that seems to be changing. Having said that, I surely do not mean that we are inching towards normalcy in travel or that the business is returning in full flow but surely from hopelessness, we are now in the arena of hope and visibility of business is clearing up.

Essential business travel and domestic leisure travel is in sight for now. Long weekend outings in the periphery of 500 km are limping back and most of it is by road. Hotels and resorts are leaving no stone unturned to attract tourists and low tariffs are a big attraction for many. This really is a good way to build confidence among the travellers, if not profitability in business.

 Signs of revival are visible

The trends during Gandhi Jayanti’s long weekend (2-4 October) were really encouraging and it brought back hope that people are now ready to travel for leisure after having spent six months of either government-imposed or self-imposed restrictions. The travel distance from home has reduced somewhat, which was very much expected too, at least in the initial phase of opening up. Self-driven road travel is up due to less confidence in other modes of transport and understandably so, at least till the confidence is regained; train travel for leisure is on hold for now and this seems so because people are not ready to travel by rail, though this too with time will reverse and people will return to this mode of transport; destinations that promise nature retreats and open environs are much in high demand as compared to urban cluttered areas and it seems this will continue for some time till the disease is under control and the confidence to travel returns

It may be ‘new normal’, let’s not make it look ‘abnormal’

Another most important aspect is that most in the industry are now making the ‘new normal’ which in many cases looks like an ‘abnormal’, as they use this term to highlight a ‘sales pitch’ or so-called ‘USP’, which unfortunately will only do more harm than any good to the destination as a whole. This might just create more confusion and fear in clients’ minds, plus induce unwarranted negative competition within the industry, putting the entire destination at stake.

After all, we all care about our guests and do follow prescribed protocols for the safety of our guests and our people and this should always be projected collectively by India as being a safe destination, taking the entire industry in its gamut, to instill confidence among tourists, both domestic and international. Each property or each tour operator, highlighting its own safety (over-safety) protocols too loudly and making these their USP or a differentiator, will only put the destination’s credibility at stake and would do more harm than any good.

Worry about unequaled travel demand

One fact that the industry should be worried about is the unequaled travel demand due to a dampened economy that has left little disposal incomes in the hands of people world-over and has somewhat lowered the sentiments, which in turn has tightened the purses of people. This fact for some time might adversely affect the travel demand. Analytically seeing, the adversity in the travel demand could be a multiple ‘W’ shaped rise and fall for quite some time, wherein, travel will see a sudden rise in certain periods and then a sudden dip, and this trend might last for another one year or so. Ideally, a slow rising slope consistently would have been better to turn around paused businesses quickly and making them economically viable, especially in the present scenario, when travel and hospitality companies are re-starting in phases and rehiring the furloughed staff to reposition themselves in the market.

Image only for representation and explain ‘W’

Overall, the trends have shown very encouraging sign probably for the first time this October and the industry really wishes, it continues unhampered and only improves further, to return to the levels where it had paused.

 Revenge Tourism?

‘Revenge Tourism’ is an interesting term that exemplifies the surge in demand to travel. Anything that is restricted for long, generates a lot of curiosity and willingness, thereby it only pushes the demand upward.

 People had been locked for long and probably for the first time in their lives in such a manner and that too globally. All this while they have been glued to the internet and books, flipping through innumerable destinations, making a long travel wish-list and understanding destinations deeper than they ever did, thus it is very natural that the level of curiosity has gone up. After all, technically, effective demand is when the desire is backed by a willingness and ability to pay. Desire to travel is at its peak and so is the willingness while the market price of products is much lower than they ever were and this in total, is an encouraging trend that will also help in market extension and traverse into new segments. To catalyse travel demand and to return to pre-COVID figures, Revenge Tourism will surely help but having said that, re-growth in travel and leisure has to be responsible.

The fears of some experts about the emergence of over-tourism and tourists turning blind towards social and environmental responsibilities are not unfounded and could be a factual question-mark on sustainability and responsible tourism. As a tourism professional, we of course are in the midst of the worst crisis of our careers but this surely shouldn’t mean that we just unmindfully slaughter the hen for the want of golden eggs, creating a question mark on the sustainability of the destination and finally jeopardising our own existence.

Period of lull is an opportunity to relearn and redo

Every crisis always brings along with it some opportunity. The entire tourism industry should see this period of a lull as a period that could help us ramp up our businesses, rectify all the past mistakes and see markets afresh. For long we have been in our comfort zones of selling what we had been, and not trying our hands on anything new or innovating our existing products, both from a sales point of view and also from the consumer point. The last six months were actually a time to relook and restructure, mend our mistakes of the past, learn and re-learn many things that could help us stay above the rest in the future. For the first time, our businesses came at a level playing field with the best in the trade, as if all of us stood on the starting mark of the race and the real test of our endurance begins now. Only if we see ourselves as a fresh startup, on ground zero and if we imbibe the spirit of a learner, we can revive quickly and much better.

Practically speaking, all travel businesses will post a substantial loss this financial year (2020-21) and probably the next (2021-22) too, the strategy that I suggest to lessen the pain and to breakeven in 2022-23 are as under:-

Realign Business: Our businesses have to go back on the white-board planning, where we ought to re-plan it as if it’s all fresh and new. Relook at the capital and its structured deployment, reenergising our staff that has been the strength but for quite some is the most depressed lot, re-strengthen our customers who will finally be at the core of the business. We have to re-package all our products in the current light and scenario, look for new markets and avenues to augment are businesses and above all have faith in ourselves and bring back the spark that we all had when we had first started.

Plug Financial Leakages: When the business was moving well, there were innumerable financial leakages that we never looked at, as we did not consider that as an important issue. It is now time to plug such leakages, get away from loss-making, painful and financially stressful segments and look at our core competences to get the most out of our business. No matter if it means reducing the size or even augmenting it if required.

Cut Costs – Not Corners: Cutting costs doesn’t mean cutting corners. In a running and a roaring business, costs are often ignored, though it is a proven fact that input costs are inversely proportional to profits, the lower the costs, the higher is the profits. In the 1980s American Airlines saved a whopping $40,000 per year by just removing an olive from every plate of the salad served to its passengers, similarly, Southwest Airlines in 1994 saved $300,000 by not using the garbage bags with its logo on it. Very small efforts often result in huge cost cuttings and add up to our profitability. It surely doesn’t mean, compromising on services or delivery but instead, rationally identifying unnecessary costs and plugging avoidable expenses.

Multiply Revenue Heads: When all is well, seldom do we look beyond what we do. Travel has many verticals and probably we were only putting all eggs in one or a few baskets, despite the fact, there are so many that we never explored or were ever serious about. To ramp up revenue it would be good to multiply revenue heads. If we had not chartered into wedding management territory or the cruise travel, it is time we now do, so that we have added revenue heads. Similarly, exploring new markets is another way to source additional revenue, if as inbound operators we have mastered the UK as our source market, Scandinavia or Eastern Europe could be another source or for that matter even the US or Australia. The idea is to effectively have both, market extension as well as market development strategies in place.

Though in terms of business it is the worst one could experience and quite depressing too but then where there is despair, there is hope too. Let’s also see it positively that the tourism industry has got a breather when it can look back, re-analyse and then move ahead. Being engrossed in work and day to day issues, no organisation ever got this luxury of time to redo many things and think beyond the usual business operations to achieve greater heights and position it more strongly than ever.

About the author: Prateek Hira is the President  & CEO of Tornos & Gastroutes and Co-Founder & Director of River Rhapsody and Indian Frontiers. He is also a tourism researcher and an academician, teaching tourism in different Indian and foreign universities.