Short of cash and bruised by the prolonged lockdown, hotels in India are offering their guests an option to pay now and stay later. The move, top officials hotel said will be a win-win for both.
“Occupancies across hotels in key cities witnessed a sharp decline, as travel restrictions intensified and India went into lockdown towards the end of March 2020,” HVS-Anarock said in a newsletter.
The scheme allows the guests to stay at a property of their choice, on dates that suit them at a business or leisure destination at a very competitive price. For hotel owners in deep crisis due to the Covid-19 pandemic, it will offer some succor and help them meet the fixed costs that include salaries, rentals and other payment obligations.
Hotels are using a combination of platforms to reach out to the guests. These include online travel agents (OTAs) such as makemytrip.com, booking.com, goibibo.com, cleartrip.com, among others. Apart from listing on the OTAs, several hotels have also opted to get themselves enlisted on an open booking platform, created recently by Noesis Capital Advisors, a hotel advisory.
The platform called paytodaystaylater.com allows guests to buy their preferred hotel’s credit voucher worth Rs15,000 at a price of Rs10,000 which can be used at a later date. “It’s a non-profit initiative which is aimed at helping hotels generate some liquidity,” said Nandivardhan Jain, founder and CEO and Noesis. Since the creation of the platform, some 150 hotels have come on board and another 300 are expected to join shortly, said Jain. These include mid-size, luxury to upscale boutique luxury properties.
Amid the economic impact of the pandemic, which is leading to job cuts and lay-offs, owners and officials, who have stepped up their engagements with the OTAs and have listed with paytodaystaylater.com, have moderate expectations. They however, see this as a step to get things moving at a time when shuttered hotels have earned zero revenue.
Says Manu Rishi Guptha, chief executive at Niraamaya Business group, a hospitality arm of Jupiter Capital, “This initiative will help the hotels to wade through the tough months from May to October. It offers a good cash management technique.” Niraamaya is an upscale boutique resort with properties in Kerala, Nagaland and Goa. A three-day holiday at Niraamaya that would typically Rs 120,000 is now available for Rs 60,000. “The world will go through a economic deflator. It will apply to every single economic activity on this planet. So there is no reason to have high ground,” said Guptha.
Suhail Kannampilly, CEO Ferns Hotels & Resorts is encouraged by the initial response the listing on the Noesis’ platform. Ferns’ Mumbai property recently got a four-day corporate booking. Besides being listed on makemytrip.com, all of 4000 rooms across the country are listed with Noesis.
“It’s the first time that we are doing open ended bookings,” said Kannampilly adding that he is not expecting volumes as people are unsure and non-committal to travel. The move “puts the foot in the door.”
Dehradun-based Leisure Hotels which has properties in Uttarakhand under Leisure brand is also in the process of listing 65 per cent of its properties on paytodaytstaylater.com and makemytrip.com. It’s also creating its own platform for a similar scheme, said Vibhas Prasad, director Leisure Hotels. It is also in talks with other travel agents for a bulk booking in the business-to-business (B2B) segment. “The volumes may not be big enough, but it will at least set the idling inventory in motion,” said Prasad.
“We will work with everyone and anyone. At this point, it’s all about how can I tailor the package to fit your bill,” said Ajay Bakaya, managing director at Sarovar Hotels. Sarovar plans to list all its 6400 rooms at its 84 properties across several platforms and offer pay now and stay later scheme.
Out of total revenue loss likely to be faced by the hotel industry, organised hotel operators are estimated to face a revenue loss of over Rs 40,000 crore, according to HVS.