Tripclap and IIM Lucknow analyzes small hotel operations and challenges in India post-Covid

Tripclap and IIM Lucknow analyzes small hotel operations and challenges in India post-Covid

Gurgaon, April 21, 2023: Tripclap in collaboration with IIM Lucknow, today revealed its latest findings on the challenges faced by small hotel businesses in the aftermath of the Covid-19 pandemic. In its new research report, the company also analyzes the Management Research Problems (MRP) : the activities of small hotels in terms of their business operations, aspirations, and market needs, while also presenting the major challenges encountered by these businesses, and recommendations that can be used for effective management.

To have a deeper insight into small hotels’ activities in terms of their business operation, Gaurav Gupta from Tripclap under the supervision of Prof. Satya Bhushan Dash, IIM Lucknow performed qualitative and quantitative studies, wherein sample sizes from hotels of almost all parts of India were taken (including Hill Stations, Metros, and Non-Metros).

The study highlights that hotels in hilly areas devote the majority of their time in branding rather than hiring skilled staff. At the same time, hotels in Metro devote an average time in doing digital marketing for generating bookings. However, more than 80% of hoteliers from non-metro are saying there is no change in their activities post covid 19. Hotel branding includes identity creation like logo, taglines, etc; positioning; pricing; promotion in different travel events like SATTE, OTM etc; building B2B networks in order to ensure future sustainability and business. Although digital marketing brings more direct sales for a hotel, owners focus more on the branding of hotels by participating in different events and sponsorships. Securing future revenues and long-term growth is more important than the short-term gains for the hotels in metro areas. Though the world has changed a lot, hoteliers are still performing the same activities for managing their properties.

Adding further to the report, Gaurav Gupta from TripClap said, “Post Covid-19, a lot of small and medium-sized hotels were crying foul on the viability of their business due to the absence of a relief package from the government of India. After analyzing the data, we accepted and rejected some hypotheses and ultimately found that the business is back to the same as before COVID-19. No significant changes have happened in the activities of the hotel. There are many barriers/challenges to managing these hotels; however, the major ones are lack of quality/trained staff, absence of digital marketing staff, and last but not least, needing their website. When the world talks about Web 3.0, 40% of hoteliers do not have a website. It is important to note that having a hotel classification helps. This gives all the more reasons for the authorities to increase the set-off period of business losses for this capital-intensive hotel industry.’’

There is also not very clear demarcation between small, medium and large hotels. Only 1880 hotels have taken star classification in India, of which majority is 3 star hotels i.e 564. However, more than 40,000 hotels have listed themselves on Nidhi 2.0 portal. This shows that hotels are not taking star classification for 1 of various reasons. Mr.Jaison Chako (Chief Secretary of FHRAI) says there would be estimated more than 80,000 hotels in India and many of them are in oblivion and are looking for the right platform for generating more sales. Small Indian hotels are underrepresented in the Indian economy as there is no direct mechanism of knowing their contribution. Lot of time studies are conducted around 5 star, 4 star hotels, and the challenges of small hotels remain unknown. Efforts of small hotels get cumulatively added in the SME Service sector of India and don’t get the right recognition. Aiming further at understanding the barriers and facilitators for small hotels in India, the study identifies the inaccessibility of hotels, lack of basic amenities such as water, poor infrastructure, expensive amusement tax, insufficient government support, and natural disasters as key obstacles.

The report concludes that the Hospitality industry faces similar challenges irrespective of the star ratings they have taken from the Ministry of tourism (MOT). MOT has to work more in order to reduce the challenges of operating a hotel in India. They should be whitelisted by financial authorities and there should be more branches of banks in hilly areas as hotels there want easy availability of loans. Moreover, uniformity in GST will help them invest their saved energy & money in more important activities like hiring, training, and branding. Not having its own IT team is the major challenge in managing a business in post covid era. Hotels prefer long-term growth rather than short-term. Therefore it is important for authorities too to invest time in this industry which is so serious about sustainability.

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