Rather than adopting a combative approach, an attitude of cooperation will help all hospitality stakeholders
By Ashish Kapur
Indian Tourism and Hospitality Industry have emerged as one of the key drivers of growth among the service sector in India. With an increase in inbound tourism, the industry is bound to contribute to economic growth. Recently, there has been a lot of noise around various issues, mainly against the disruptions caused by Oyo (India’s largest hotel chain) and Go-MMT (MakeMyTrip’s OTA or online travel aggregator). The current round of strife around disruptions may raise a sense of déjà vu among knowledgeable readers.
The same story was replayed in India’s banking industry in the 1980s, when workers rebelled against computerisation, fearing it would trigger mass retrenchments. Ditto, with the telecom revolution of the 1990s, which triggered higher economic growth and greater prosperity across India.
New-age industries such as e-commerce, fin-tech and food-tech have been upturning existing, inefficient old-world models and replacing them with tech-based solutions. Big data analytics and data-driven systems are building better business outcomes.
Today, India’s hospitality industry seems at a similar crossroads, traditional brick-and-mortar entities are unable to keep pace with the changing dynamics being introduced by online and hospitality players. As a result, some small- and mid-market hotels have come together via various industry bodies to counter the innovative pricing practices and other dynamic disruptions, which they fear will impact their business and erode margins. Small players (yet Goliath of the market) are often influencing small owners that are always in for some additional income, but this is hurting the overall maturity of the market.
Regrettably, such negative perceptions are based on insular, short-term perspectives that do not consider the larger, long-term picture. Be it food, retail, finance and banking or other industries, every sphere has witnessed dramatic change that initially created a fear psychosis about job losses and closures.
Who would have ever imagined that phone and other utility bills could be paid within seconds via MobiKwik, PayTM, PhonePe and other digital platforms? Who would have thought that food could be ordered using an app or that merchandise could be bought from anywhere?
None of the above disruptions have badly impacted banking, restaurants, retailers or kiranas. Instead, the disruptors have opened up untapped segments. Today, banks, restaurants and retailers are more efficient, with courteous, well-groomed staff offering more deliverables via quicker turnaround times.
Yet, none of the above would have happened if the Luddites and traditionalists had succeeded in blocking the disruptors and innovators. Traditional banks and retailers are themselves tying up with start-ups to boost business outcomes and learn new ways of operating efficiently and profitably.
Recall how farmers railed against genetically-modified crops more than a decade ago? At present, the same farmers are rallying to allow GM crops.
Hotels and hospitality is no different. It is precisely such industry-transforming changes that new-age innovators such as Oyo are seeking to bring about. Not just in India, but in China and America, among a host of other nations.
Barely two years ago, who would have ever dreamt an Indian hotel chain could set out to establish its presence in other countries? Unfortunately, dynamic business models are always misunderstood and decried in the early stages. It is only when the critics and naysayers themselves begin benefitting from the new dynamics that opposition finally ceases.
Uberisation of cab services has transformed the taxi industry, replacing to a large extent the old kaali-peelis and taxi stands, to the extent that even white-collar professionals have taken to driving cabs to supplement income. Small and mid-market hotels need to understand that the new age company is moving beyond short-term goals, even going to the extent of establishing skills training and development institutes for hospitality professionals in the country. As the face of the Indian hospitality sector changes for good, all companies—small and big—are bound to benefit from the rising tide of prosperity.
Rather than adopting a combative approach, an attitude of cooperation and conciliation will help all hospitality stakeholders drive better business bargains based on volumes.
The author is CEO, Invest Shoppe. Views are personal