Vineet Verma

At the start of 2020, Brigade Hospitality had seven operating hotels with 1,345 keys and a lineup of five projects with over 650 keys in the pipeline. The pandemic changed that.

Vineet Verma, Executive Director and CEO, Brigade Hospitality recalled that while the company put its ongoing projects on hold, it managed to launch Holiday Inn Express & Suites Bengaluru OMR last October. This was because the property was in its pre-opening stage and a part of the Brigade’s mix-use project atop the Orion Uptown mall.

Doing more with less became the mantra at Brigade Hospitality. “To manage the cash flow, we immediately introduced measures to arrest expenses, including postponing of certain non-essential Capex spends, energy conversation through optimal utilisation, curtailing non-urgent spends, renegotiating with partners, landowners and vendors, follow-ups with debtors, availing moratorium on banks loans, etc,” Verma elaborated. The company also reached out to the state government seeking relief on license fees and taxes.

Moreover, the real estate company wanted to justify manpower costs since this is one a major expense in hotels. “We put an immediate freeze on non-critical hiring, rationalised staff strength and staff to room ratios in line with reduced rooms and restaurant occupancies. Collective effort combined with excellent teamwork where all our associates went beyond their brief, helped us tide over the crisis,” Verma added.

MAKING THE BEST OF THE WORST
Post June 2020, rooms business, though extremely limited, was mostly for repatriation and self-quarantine purposes. Since room rates were governed by government authorities, ARRs were around 50% and even less the usual rates for the company.

With room occupancies dropping to single digits during the worst phase of the pandemic, the company sought several initiatives to augment its revenues. This included re-purposing hotel spaces and converting it into revenue generating areas.

People working remotely were invited to work from hotel rooms that were converted as temporary office spaces. A few floors were offered as extended stay options on a monthly/yearly package rates.

“Our entire effort was to ensure that our hotels could break even, if not achieve a GOP,” Verma said. In addition to food delivery, pop-up food counters at neighboring residential apartments were introduced with adequate social-distancing norms.

Hotels generally have an annual business plan when the going is smooth. Following the disruption, Brigade collaborated with its hotel partners to look at quarterly targets and revisit these monthly. Verma stated that by suggesting course correction based on ever evolving situation, we achieved a GOP in July 2021 in all hotels except for one. August 2021 looked even better though the company has yet to come anywhere close to its pre-COVID business levels.