Aligning with an organised chain seems to be the only viable solution: Accor India

As in other businesses, the Covid-19 pandemic has led to multiple changes in the hospitality sector, one that thrived on personal touch has to contend with contact-less operations. Just like the operational changes, a structural transformation is underway that has largely gone unnoticed. Standalone hotels in the country want to join large hospitality chains in order to adapt to the fast-paced changes brought by the crisis. 

“In next 12 months, we foresee a significant rise in conversion numbers (from unbranded to branded) as given the current market dynamics being part of the branded hotel chain is a compulsion rather than a choice,” Nandivardhan Jain, Founder & CEO, Noesis Capital Advisors said. With the attention to personal health and hygiene rising, the brand power of large chains is likely to become a major clinching factor for customers.

Though organised hotel chains dominate public perception, unbranded and independent hotels comprise more than 70 per cent of the total available rooms in India. Though many standalone hotels did join branded chains even before the pandemic had hit but the crisis has accelerated the trend.

Attracting customers is just one of the challenges, transforming operations in line with the changed reality is another pain-point for independent hotels. To be able to operate safely, hotels will have to make significant changes in the way they operate. From using technology to reduce contact points to frequent sanitisation, a number of measures will have to be taken. It will require substantial know-how and human resources, which many independent hotels may not be able to find. 

The nature of the industry too has become a major obstacle for unbranded hotels. Before the crisis, standalone hotels were having a smooth sailing with a stable client base. Some hotels catered primarily to business travellers while some focused on religious tourism. The pandemic has disturbed the apple cart. 

The financial headroom for standalone hotels has reduced and aligning with an organised chain seems to be the only viable solution. However, the upfront costs to meet brand standards could be a tumbling block.