Tourism Finance Corporation of India

Reinventing business in the midst of COVID-19

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Just about six months ago, little did anyone expect that the world would be such a drastically different place to live in. With the start of the contagion of COVID-19, almost all the countries in the world witnessed lockdowns in order to limit the spread of coronavirus. Unprecedented in nature, simultaneous closures across the world had its impact on all the segments of business. Tourism was no exception.

As an industry, travel & tourism sector contributed a little over 10% of the global GDP in 2019. In India, the entire sector came to a grinding halt as a country-wide lockdown was imposed by the end of March 2020. By April, prominent destinations, which were once touted to be thriving party locales,across the country wore a deserted look. Employees in hospitality segment were staring at salary cuts across board with possibilities of furloughs/ lay-offs. The country-wide lockdown period resulted in drastic reduction in steady flow of revenues of many hotels, restaurant chains, resorts etc.

SUPPORT FROM ALL QUARTERS

Various timely measures undertaken by RBI & Government of India have helped smaller players in the industry to survive this unprecedented crisis so far. Schemes like Emergency Credit Line Guarantee Scheme (ECLGS) has come as a boon to these players. Additionally, timely support and hand holding by various Lenders operating in Tourism & MSME space, particularly Tourism Finance Corporation of India (TFCI) Ltd (a premier NBFC, interalia providing financial assistance to hotels, restaurants, educational institutions, hospitals, etc.) has gone a long way in minimizing damage to the sector. Further, a few organisations have interalia set up special corpus fund for the benefit of the employees of the member restaurants.

THE NEW NORMAL

Since the beginning of Unlock 1.0, many parts of economy have gradually started opening up.While observing hygiene related precautions, the hospitality segment, hotels/restaurants/resorts across the country are opening up and are witnessing gradual but steady rise in occupancies. With the continued rise in COVID-19 recovery rates coupled with acceptance of the new normal by travellers and the pent-up demand, it is expected that the demand for leisure travels shall gain momentum from Q4 FY21. Younger travellers are likely to be amongst the first to be back on travel trail again. Notably, the tourist season in India usually spans from October to February every year, which shall drive the recovery from the last quarter of current year.

NECESSITY IS THE MOTHER OF ALL RE-INVENTIONS

Faced with these unprecedented crisis, restaurants/food outlets have started reinventing themselves by adopting high degree of sanitation measures, ensuring contactless delivery of your favourite cuisine at doorstep etc. Even 5-Star hotels are delivering their hospitality experience to its patrons in the safety of their homes, by partnering with various food delivery companies. It is heartening to see that a few outlets rather took the path of innovation to stay afloat in times of such distress. An example of this is a Madurai based restaurant, which started making its “Parottas” in the shape of face masks! This resulted in demand of such Parottas even for breakfasts, which are otherwise ordered for dinners.

Going forward, what will surely change in hospitality, is the adaption of change in customer behaviour and buying patterns which would be met through low-touch services, niche travel experiences, guest room automation, etc. Hotels are likely to witness the emergence of a newer customer, whose daily behaviour and thinking will differ from what it was before the COVID-19 outbreak. Social distancing and high hygiene standards are here to stay for a while. Further, with hopes of a safe vaccine being discovered, not everything is all that gloomy. Tourism Finance Corporation of India (TFCI) is actively engaged in the provision of financial assistance to a vast segment of the tourism segment in India.

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