We spoke with Ajay Bakaya, Managing Director, Sarovar Hotels, just before the ceasefire was declared. Of course now, we hope traffic will be back sooner than later, but here was the big response – how hospitality had begun to brace the disruption.
Navin: Ajay, you are, to my mind, one of the most articulate members or representatives of the hospitality industry, given your vast experience in setting up all the hotels. So how many hotels does Sarovar have of date?
Ajay: Around 140.
Navin: And how many in the pipeline?
Ajay: We are operating 140. We only have 80 in the pipeline.
Navin: Okay, so that’s a good 200 plus together. So, what is the immediate impact that your hotels have experienced in the present scenario where we are either on the cusp of war or getting into a war-like situation? Some of us feel it’s already started. That apart, we hope it will end very quickly. But what is the first impact?
Ajay: In the month of May, which is where we are on right now, it is the 9th of May, we see a 50 percent drop. And that is sitting in the 9th, it might be even worse in terms of revenue and obviously even a bigger impact on profitability. Because of our hotels in Punjab, we have two hotels in Chandigarh, hotels in Srinagar; we have three in Rajasthan, which includes Jodhpur and Jaisalmer; hotels in Gujarat, which includes Rajkot, Rajayog, Shardaon and perhaps bigger impact getting into Ahmedabad soon.
About 50 hotels in strong religious places. You can see huge washout in Ayodhya. And a place like Haridwar and Vrindavan may also see some washout. Bcause religious places become sensitive targets in these sorts of times. So, I think we are looking at a fairly strong impact. All of us hope it is short term.
In my opinion for whatever it is worth we are looking at a risk scenario of maybe a month or two and could be anybody’s guess after that.
Navin: Now this 50% fall, which you said, is that across your system?
Ajay: Yes, across the system.
Navin: So, is the impact less in southern states for instance?
Ajay: Yes, it is lesser, for sure. I was in Chennai yesterday and today I flew up and down. It is lesser. However, the flights both yesterday and today were about 30 to 40 percent with vacant seats. I’ve never seen that in India for the last couple of years.
Even a single seat, was not vacant, let alone 30-40%. Airports are quieter. So I think the impact is going to be all over. Of course, much less in the South. Bombay and Delhi are still okay. They’re impacted, but they’re not dramatically impacted. And Hyderabad, Chennai, and Bangalore remain good spots. But I think everything is going to get impacted. And my sense is that the times like this, it always starts at the top. So, luxury and upper end would probably see more impact. Executives, chairman, heads of companies cut off their travel for the security.
Navin: You were also the first hotel to open in the new religious circuit. namely in Ayodhya. Now, what is the impact in Ayodhya at this moment?
Ajay: For the moment about 20-30% because in Ayodhya we always been a full house from the time we opened and we are now seeing cancellations and so we don’t know how long term it’s going to be but at the moment it’s going to take a 30% hit.
Navin: For your hotel in Ayodhya, is the catchment from the immediate surrounding of Uttar Pradesh or is it national?
Ajay: Very much national.
Navin: But the faithful from around Ayodhya, are they continuing to trickle in, in the last few days or have you noticed any drop in that also?
Ajay: You know, we have seen a drop in the last two days on bookings and I think it has nothing to do with anything other than the fact that it becomes a strong target symbolically.
Navin: Understood. So, tell me in times like these, what do you recommend the hospitality industry to do?
Ajay: You can’t just wait and watch. That’s not what you guys are paid for. So, also just one thing stepping back into the old. The closure of airports, we’ve got about 25-27 airports closed at the moment. Has strong local impact. There is talk of more closure. So, if Dehra Doon was to close, it would impact on the entire Char Dham Yatra. And Badrinath, Kedarnath, all of those, those will suffer. Now getting back to what can one do, what does one do?
Firstly, communicate very strongly to your team, or teams a sense of positivity, a sense that we have a battle to win. And we can’t do it by sort of gloom and doom scenarios, oh, everything’s collapsing around me, what do I do? I have the messages, I want to be with my near and dear ones, can I leave my post? So the answer is stay positive, we gotta fight.
The first thing is security and safety of all of our people, so we moved a lot of our GMs into the hotels, we made sure there’s a senior manager on duty round the clock, we do all the drills and everything else. And we are communicating to our own teams to begin with and consequently to our customers that, look guys, it’s a blip on the radar, we will overcome it. So, the positive message has to go across very, very, very strongly. Once you are secured, you are safe and sound, then you start looking at how do you save the best part of your business, what all can you do.
So, no more hire, total freeze on hires. Encouraging people to go on leave without paying, essentially places where they run a business, if they want to take leave and they say they want to go away to feel more secure somewhere, I say fine. We can’t afford to pay you for it,
but by all means go right ahead. Cutting down on all possible costs. But we’re keeping our hotels open, we’re not again shutting down any hotel. That’s the only way to do it and that needs to come right to the top. Security highlighted as a first priority. Chances of making sure your people, your family, your guests are very very safe. Do all the drills, all the fire drills multiple times to make sure you are well worn. And then look at costs.
Navin: And the impact on business is also across F&B, I would imagine?
Ajay: Yes. Luckily, it’s that time of the year when, other than the hills, it’s a time of the year when your big F&B is quiet for the next 3-4-5 months.
Navin: And any kind of, call it wisdom or any gyan which you want to share with fellow hoteliers or maybe down the line hoteliers?
Ajay: We learnt a lot in the COVID experience. That’s going to a stand in good stead. The thing is to be realistic, to see what’s happening. Don’t have a knee jerk reaction, but be prepared to go through a certain time and things are going to be tough and cut down on costs dramatically.
Navin: That is a very good sense from you on what’s happening on the ground and tell me these figures that you were mentioning, obviously they were pertaining to Sarovar Group, what is the sense across the industry?
Ajay: I would say similar, I think the impact is going to be bigger at the luxury end, but that’s only my sense from where I am, I don’t know right or wrong.
To give you an example on the positive side, I am scheduled to go to Chandigarh on the Tuesday. We started a management training program in August of last year. So they are in their last legs now. Now, my own team says please cancel the trip to Chandigarh. I will make sure I go because I want to convey the sense of positivity to the young man in the trainees saying guys this is the way we handle things in a tough situation. By backing out right now, it won’t have any impact on business at all. But I think I will be sort of an opportunity to talk to our new young army, our team of future managers and convey something.
Navin: And like you said, it’s something which we will tide over. If there is anything which the hotels can contribute in any form to the task of being patriots, it’s always there.
Ajay: Absolutely, absolutely, absolutely.
Navin: That’s so true.
Ajay: Ladakh has done a brilliant deal. Ladakh hoteliers have opened the doors to people who have strand stranded there as tourists and offer free meal and board. I think that’s fantastic. So yeah, we are always ready to do whatever needs to be done at any stage.
Navin: So, would you say across your hotels if somebody is stranded, would your hotels be available? I’m not saying on gratis but to see what they can do for them individually from hotel to hotel, location to location?
Ajay: Yeah, yeah, absolutely.
Navin: Okay, so to say that in all the cities where there is some kind of disruption taking place, your hotels are available on an individual call to take the best action forward in supporting the stranded tourists. That’s great to hear.
