COVID Impact On Hotels Will Remain For 2 Years Despite Business Turns Normal

-Ayshwaria Lakshmi

As the pandemic deepens in the country, the hospitality sector that suffered a setback last year during the first wave is going through the same situation once again. But this time, the situation looks much more severe than last year, said S Rajagopal, Partner, Sangeetha restaurants. Sangeetha group of restaurants is owned by two brothers P.Rajagopal and P.Suresh

“Every industry in India has seen the second wave impact much severe than the first wave. But as always, the hospitality industry is the one to take the biggest hit once again. As the cases rise, the staffs are unwilling to come to work. They are preferring to go back to the villages to stay with their families rather than stay in a rental and work,” said Rajagopal.

He added that for normality in running a business like the first wave, the industry would be back to normal by the end of this year, depending on the third wave. For the restaurants to have financial stability and overcome the staffing issue, it would take at least two years. The other issue because staffing is the lack of skilled staff in the country.

The students from the catering institutes in India prefer to work only for multi-national hotels than stand-alone restaurants. Rajagopal also pointed out that the brands offer much better pay than the larger hotel for a lesser work time. This situation has also seen a change as the offers from the hotels are lesser, the catering students are looking into work with them.

Changes That Affect the Industry

This could be credited to the change in food habits, as this wave is much severe. This impact of the wave could also translate into a reduction in lavish spending and eating out habits. Even if the same thought was believed during the first wave, the number of cases in the country and its impact would definitely have this change among the citizens added Rajagopal.

“We have started to see the second wave impact in the mid of March. Now, with WfH increasingly being the preferred mode to work. Those units have suffered more losses than the residential ones. Our DLF unit in Chennai has not revived until this March. This is as not even nearly 10 percent of the staffs have come back to work,” said Rajagopal.

He further added that during March, only 40 percent of the business was seen in the residential areas and the commercial areas have not even done 20 percent of the business. The impact of this current second wave may last longer added Sangeetha co-Founder.

He suggested that to survive this, the restaurants should have to go through an internal change in the business functioning. For instance, large-scaled shops might not work, but a shop with 2,500 square feet might work much better even to reduce the financial burden. The shops would have to work around the clock, cutting down on menus and workforce would aid in business growth, added the co-founder who has over 30 years experience in the industry.

Automation Would Be the GoTo

Sangeetha has over 54 outlets spanning Chennai, Dubai, Malaysia, Hong Kong, the US, London. Rajagopal added that in Dubai they would have employed only about 25 staff whereas in India it would be double the number of staff to do the same work. He credits this to a lack of automation in India. He also added this would be a good time to look up in automation, as the staffing issues are increasing in the country due to Covid’s second wave.

“When running a restaurant, it is important to look for ways to reduce the production cost and the labor. It holds true to any industry. But for someone to get into the industry, they should know about the industry and be able to put in a lot of time. Only then, the restaurant can provide quality and good customer satisfaction. It is also important to understand what works and what does not in a market like India,” he said.

He also added that specialty restaurants to survive in the Indian market is difficult. It would have to provide various courses as a choice for the customers apart from particularly specialized dishes. In the centralized kitchen, he points out that to be able to serve fresh food to the customers, the centralized kitchen cannot be over 4 -5 kms away. Beyond this, the quality of the food would suffer. Especially in India, freshly prepared foods are preferred.

Views on Kitchen Safety Norms and Expansion Plans

“Our sector has always been with many laws abide by. For instance, all the license renewals would take place in March. Like last year, after renewals, the industry is going through the second wave crisis,” said Rajagopal.

As the partner from the Sangeetha group of hotels, he added that the growth for them has always been greater in India than in any other country. They have more success among the Indian community and India. On the Highway business, he points out that the business is a more seasonal business with more income-generating during the weekends and holiday seasons.

“We do receive calls for franchises even now. But the situation looks like any opening would be possible only after two years. Since planning, staff recruiting would each take a minimum of six months normally,” said Rajagopal on expansion plans.

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