Union Budget 2021 India: Says Budget is an opportunity for the government to support sector that is largest multiplicator of jobs
Puneet Chhatwal, MD & CEO, IHCL
Indian Union Budget 2021-22: As head of India’s largest hotel chain and chairman of various industry bodies, what expectations do you have from the Budget?
Umeed pe duniya kayam hai, but hope is not a strategy. We have made several representations to the government for relief to the tourism industry. The Budget is an opportunity for the government to do something for supporting a sector that is the largest multiplicator of jobs, especially in the unorganised sector. Supporting a sector that can help in long-term sustainable GDP growth is a good thing to do. The sector has historically contributed more than 10% to the global GDP and jobs across the globe. Also, supporting a sector that can help build awareness of a nation is good. When India’s Constitution was written, tourism was not a priority. There were different issues then. Seven decades later, the time has come to give the sector the importance it deserves. Other nations treat tourism as a pillar of growth and promote their cities like Paris and London as tourism magnets.
I look at it under three pillars — policy, taxation and stimulus. By policy I mean how you treat tourism. Is it infrastructure or is it getting industry status in various states? By taxation, the perception is that everything is a five star. Today, as we sit at the launch of a new hotel that has upgraded its entire neighbourhood, it is not a five or even a four star. It’s a nice little jewel in the heart of the city. So why should we tax this industry the most because the perception is that every hotel is a five star and meant for the rich?
By stimulus I mean, going forward, coming from a pandemic, one of the tasks is how to generate demand, because without demand sustainable growth will not happen. And that can come in form of some stimulus where we might tax companies less so they have more meetings and incentivise people to travel. When they travel, they buy tickets, book hotels and spend money. Which means more GST. But you have to incentivise them to travel.
You have had new launches in the middle of a pandemic and after a lockdown when business was zero. Do you see this as a passing phase that the industry will overcome, perhaps fueled by revenge consumption?
It is already happening. Revenge travel and pent up demand are being experienced in resorts. Suffering is really in the state capitals and capital of India and commercial capital of Mumbai. Goa is not suffering, Rishikesh is not suffering, nor is Kashmir or Coorg or Kerala. They are all full. People are driving to destinations and even flying now that aviation is 60% back to normal. But the corporate world is not travelling like it was before. At a certain level corporate demand is starting to come back. The middle management has started travelling but the magnitude is still not the same. But at the same time, I believe, yes, this too shall pass.
A qualitative classification by hotel brands, especially recently, has veered toward millennials and offerings for the younger generations. Seleqtions is a nod to nostalgia. What do you have to say about that?
It is not supposed to be like that. It is a collection of some names that are stronger than the brand. Like the Connaught is the Connaught. The Ambassador in Khan Market is Ambassador. It doesn’t matter if any other name is added to them. They will maintain their identity. Like the Blue Diamond in Pune, the Savoy in Ooty, etc. The hotel industry, after experimenting for several decades, has realised that some hotels have their own identity and it’s not good to club them under some brand. So Seleqtions is just a platform of sales and distribution created keeping the needs of such hotels in mind that are in every city and state capital and commercial capital. It includes some very nice properties that retain their individuality instead of a cookie-cutter approach. So this was the thought behind Seleqtions. There is a saying in German which I translate, ‘Let’s not be more Catholic than the Pope’. Memories, heritage and beauty of a place matter. So we are excited to have created this platform that also has clarity.
Look at Cidade de Goa. We were very keen on that property as it has so much individuality. The family that owns the property appreciated that. They have two sons and the owner told us they were giving their daughter to us. That’s the trust in the Tata Group speaking.
To launch a new platform in Delhi, Mumbai , Pune and Goa is always not easy. But we have had a good start and some very big names.
Do you have any plans for a separate brand for millennials?
I think by virtue of our parent group, our value proposition is to be an Indian hotel. We are not following other people in saying this is for millennials. Every hotel should be able to serve every age and every need. We can’t say Taj Mansingh is only for the rich and elderly. The newly-renovated Machan appeals equally to millennials and still evokes memories. In Taj Palace, what does the Blue Bar not have to appeal to youngsters? But if you are saying a brand that is for the upcoming professionals, we have Ginger that we have repositioned to appeal to that group. You can play music there, there are community tables, good Wi-Fi, etc. They are very modern and very vibrant. We call it the lean lux. It’s not cheap, but it’s lean.
We lead in design, community service and growth. We have signed and opened more rooms than anyone else, even in the middle of a pandemic.
What about the use of tech? Will that be taken to even further levels?
We do have things like one device for all controls in rooms in our palaces. What Covid has done is drive touchless tech everywhere. We have the I-Zest for that, a digital platform to drive touchless operations. Covid has accelerated change in all spheres of life to the extent that none of us could imagine, with digital being the number one winner in all that. Even if you were not digitally savvy in the lockdown, eventually you became that. These kind of changes keep coming; the pandemic just accelerated it. And it is an opportunity for the industry to embrace more digital and more tech and be less dependent on individual judgments.
How has the pandemic impeded your plans?
Everything was at a standstill during the lockdown. Progress on hotels was not happening. Offices were shut. Even now, offices are not fully operational and things get slowed down. But I am not complaining because everyone faced the same situation across the globe. We will catch up, and maybe open two hotels a month instead of one.
What about your hotels in the US and UK?
The governments there have other kind of resources. We are expecting some relief package. And with political clarity in the US, we are not worried. We will come back even stronger.
Do you think digital is the lasting takeaway from the pandemic?
I would say not digital, but resilience. Resilience of having patience in dealing with the situation and with others. Resilience of managing with whatever you have. One key thing this pandemic has done is show people how little you need to survive and what are the most important things in life.