Although the hospitality industry is back to pre-Covid levels in terms of revenues and occupancies, the shortage of human resources is a major challenge at present, as hotels continue to look for quality talent, said Ajay Bakaya, managing director, Sarovar Hotels & Resorts.

Due to Covid-19, 40-50% of direct employees in the organised hotel sector in India lost their jobs in CY2020, while a similar number were impacted by salary cuts, according to hospitality consulting firm HVS Anarock. Amid multiple lockdowns, hoteliers resorted to job cuts to reduce costs.

“The biggest challenge is lack of human resources. At the worst possible time, we had to ask a certain number of our people to leave, as high as 50% at some hotels,” Bakaya said, adding that a large section did not return even as business started coming back.

“It is not only a Sarovar issue. It is an industry-wide issue. Everyone in the industry, without exception, is in the same boat,” Bakaya said. However, to deal with the issue, the industry is picking raw talent and training them, he pointed out.

Sarovar cumulatively had over 6,000 employees across its hotels and resorts before the pandemic. “From pre-Coid days, we are 15% lower hotel-to-hotel now. We are looking desperately. We are just not finding the right people,” Bakaya said.

Experts believe that the hospitality industry is still struggling with an overall 20-25% shortage of quality manpower.

However, with 98 properties in total — 97 in India and one in Lusaka, Zambia — Sarovar has not only surpassed CY2019-levels so far as revenues and occupancies are concerned, but it is also looking at a pretty strong performance for the remainder of the year. Most of the company’s hotels and resorts are in the three- and four-star segments across the Sarovar Premiere, Sarovar Portico, Hometel, Park Inn, Park Plaza, Radisson and Golden Tulip brands.

We are above CY2019-levels now in terms of occupancies, Bakaya said. “In some cases, the rates are still lower, but in terms of overall revenues and RevPAR (revenue per available room), we are ahead of the CY2019,” he added. The MICE (meetings, incentives, conferences and exhibitions) and banquet events are contributing roughly 30% to Sarovar’s revenues.

The industry-wide occupancy at hotels in CY2019 was 66.2%, while the RevPAR stood at Rs 3,967, according to HVS Anarock. Owing to Covid, occupancy and RevPAR across the industry declined to 33-36% and Rs 1,500-1,800 in CY2020, respectively. The Indian hotel sector ended CY2021 with a country-wide occupancy of 42-45% and RevPAR of Rs 1,800-2,100 as a result of a strong recovery in domestic leisure travel, and partial resumption of business travel, as well as wedding and social events.

On the company’s expansion plans, Bakaya said that Sarovar opened five new hotels in CY2022 and there are plans to open another five before the year ends. “We will open another 10 in CY2023. We will maintain the growth rate of at least 10-12 hotels a year for the next five years very comfortably and probably increase that,” he added.

Outside India, Sarovar has a property coming up in Kampala, Uganda, and another in Hargeisa, Somaliland. It recently signed a deal with KTM Hospitality, a subsidiary of Nepal’s KTM Group Holdings, to open a Royal Tulip hotel in the neighbouring country.

Bakaya said that while there is a huge surge in domestic travellers at present, inbound tourism is almost negligible. Typically, domestic demand contributes 70% to Sarovar’s revenue, but it has jumped to 95% now.

Better infrastructure in the country allowing people to use their own conveyance and explore new destinations, visa applications taking longer than the usual time to process, as well as more expensive international travel, are among a few of the reasons that have given a boost to domestic travel, according to Bakaya.