Busyness (noun, pronounced bi-z -n s): the state of having, or being, involved in many activities. That is how Merriam Webster defines the term. That is how one can best define what Neeraj Govil, Senior VP, Operations – APEC, Marriott International was doing since March 2020, if not before that.
When COVID-19 rocked India’s economy, it jolted the hospitality sector terribly, with many companies still dealing with its aftershocks. Coping with these unprecedented times wasn’t easy, especially since there was no playbook on ways to navigate the crisis.
And that’s when Govil got busy. For many professionals, COVID-19 was a crisis unlike any they had encountered and it placed tremendous demand on their leadership skills. Suddenly, they were juggling too many balls in the air – keeping the hotels open, keeping the balance sheet in the black and keeping colleagues and owners at ease.
The best way to deal with this, Govil figured, was by empowering his teams, displaying bounded optimism, making pragmatic decisions amid uncertainty, demonstrating empathy and communicating effectively. When the economy recovered marginally after the first wave, he quickly grasped that if the company had to wait out the pandemic, it needed to realign its existing business practices. Since domestic, especially leisure, travel would lead the way to business revival, it was pertinent to look inwards. A good case in point was the increased focus on localised supply chains to optimise costs, ensure business continuity and also stay green.
“While we haven’t been busy as a business, we’ve been incredibly busy as a team, as leaders, as individuals,” Govil laughingly stated. “We underwent substantive changes, from relooking at business in its entirety and contemplating how to evolve it while caring for various stakeholders by constantly engaging with them. We had to pivot very quickly while staying flexible and adaptable.”
INTROSPECTION AND ACTION
While recalibrating the business, ways to manage topline was the first element to come under the magnifying glass. Govil recalled how he and his team evaluated various price structures, bearing in mind the fixed expenses in the cost-intensive hospitality sector.
It was time to contemplate ways to shift some of these to more variable components. A crisis is characterised by unfamiliarity and unpredictability. This is also the time, when leaders need to improve their response to situations.
“We had to review our brand standards, processes, staffing levels, etc. – basically looking at several things that we never had to look at before. We also reached out to our stakeholders, including customers, associates, owners and vendors, during this process,” he recalled.
This exercise helped the company learn about individualistic experiences and expectations of each collaborator. When the business and occupancy levels went into a slump, hotel employees were worst impacted. This was the time for companies to take a humanitarian approach and safeguard their talent, limiting their exposure to the pandemic.
Marriott did that by introducing bio bubbles, where teams lived on the property rather than transiting to work and exposing their family to any infection. “We are now pushing very hard to vaccinate our associates; at least 80% to 85% have received their first jab,” Govil affirmed, adding that that the hotel chain came up with several measures to help them deal with the mental stress and anxiety due to the ongoing situation.
A major learning for Marriott last year was the need to take short-term decisions and stay agile
He believes that small talk will colleagues can go a long way in building better interpersonal bonding that go beyond professional relationships, and unearthing what truly lies beneath. “We saw several associates struggling financially at hotels where the business impact was the maximum. We provided them with assistance both financial and otherwise through the Marriott Disaster Relief Fund and business councils in India, which is a consortium of our properties in the country. This included supermarket vouchers, so they could buy groceries and household products during this trying phase,” he stated.
Conscious that a top-down approach would disturb the hardearned stability, Govil advocated for flattened hierarchies within the organisation. This would help people move faster up with corporate ladder, especially since multitasking had become the way of life. Associate trainings through virtual mediums was beefed up to help them better navigate the ever-changing business complexities. Such initiatives also brought natural leaders to the fore, who could further foster collaboration and transparency across team.
While recalibrating the business, ways to manage the topline was the first element that came under the magnifying glass.
THE LONG AND SHORT OF IT
A major learning for Marriott last year was the need to take short-term decisions and stay agile, given the prevalent ambiguity in the air. This resulted in the ‘Work anywhere with Bonvoy’ program. It comprised Day Pass, Stay Pass or Play Pass flexible packages. Guests could pick from a one-day stay from early morning into the evening, extended overnight stay with early morning check in and evening checkout or a multi-day work and leisure destination getaway.
“It was incumbent on us to do our best to increase guest confidence. Hence, we put together several initiatives for our loyalty members that removed travel hurdles. This included relaxing cancellation policies and pausing expiration of loyalty points to give people the flexibility and comfort to resume their travel and experience our hotels,” Govil elaborated.
While these short-term decisions can keep the ball rolling, can the brand stop the juggernaut once things revert to normal? Surely, guests won’t take kindly to the discontinuation of pliant cancellation policies post-pandemic!
Rather than do any crystal-ball gazing, Govil preferred to concentrate on present-day matters related to customer experience. “Guests today don’t know whether a destination might go under lockdown, the prevailing regulatory conditions there or if they require a RTPCR test. As hoteliers, we should empathise with their perplexity and not create bigger obstacles on top of this,” he added.
He, however, acknowledged that once demand returns to normal, there will be ways to work around the current flexible environment. That shouldn’t be difficult. In the past, hotels would offer non-cancellation rates for rooms with the lowest tariff, while top-tier tariff rooms had cancellation policies in place.
Moreover, bookings on Marriott.com can be cancelled 24 hours prior to the stay. Revisiting these practices should not be awkward, according to Govil.
“Customers are quick to evolve and businesses have to evolve just as quickly. Given the levels we are at today and the subdued travel sentiment, flexibility is very important, because it underlines that we care,” he emphasised. “Unlike pre-COVID times, a lot more goes into planning a trip, hence, empathy is crucial.”
More than 70 hotels in India are part of the ‘Marriott by Bonvoy’ food delivery programme.
MINDSET MAPPING
“Life is not one long emergency: it is mostly a string of situations for which no exceptional strength is needed, and with which even rather weak people can cope if they have a stronger partner to help them out” – said George Bernard Shaw.
What most business leaders bring to the table during emergencies is their experience. However, unprecedented exigencies like the pandemic require much more. They should have the disposition to unify internal and external teams to achieve a common goal with a single-minded purpose.
In addition to handholding associates, Govil had to project confidence for hotel owner partners, who witnessed none to negligible business since 2020. With depleted capital, many were struggling to repay the bank.
Almost 40 Marriott properties were badly impacted after the first wave, and when the company gradually
reopened them, considerable cash flow issues came to the fore. The company ran an ‘Advance Purchase’ offer in India, where guests could book their stay accommodation at participating hotels, pay in advance and get a special rate. This prepaid and non-refundable stay package infused considerable cash flow to struggling hotels and buffered their occupancy pipeline.
“Ultimately, this was a derivative of demand. We tried to understand our hotel owners’ debt obligations and worked with them through the process,” Govil explained. On the lookout to boost top line revenue and alleviate cash flow issues further, the company rebooted ‘Marriott Bonvoy on Wheels’.
While not all guests might subscribe to contactless solutions, hotels need to have the technology in
place to let them make this choice.
While this food delivery initiative was introduced in 2019 in India, the hospitality major entered into an agreement with Swiggy last year. Today, more than 70 of its hotels are part of this delivery programme. “While reassessing our business, we broke it down into a few guiding principles– reimagine, repurpose and reassure for progress. Moreover, to stay competitive, we decided to renew our collaborative efforts with hotel owners,” Govil elaborated.
Narrowing down hotel operations and looking at each element from ground up, he identified the segments drying up and those likely to take significant time to recoup. That’s where the ‘reimagine’ bit fit into the recalibration jigsaw. “We worked with our owners to put all the moving pieces together. We reimagined the product, services, facilities, operating hours, source markets, etc. Next up was repurposing it based on market trends and customer expectations,” he elucidated.
MOVING PIECES
Of course, while looking at these revenue streams, the moot point was their sustainability. Some short-lived exercises would not last the whole nine yards and could be run for a period of 12 to 24 months.
The next question that emerged was availability of resources to pivot to these new markets. This called for more progressive thinking.
According to Govil the ‘Marriott Bonvoy on Wheels’ initiative exemplifies this forward-thinking approach. While the company had partnered with delivery platforms like Swiggy and Zomato, it also undertook order and delivery itself to make this channel sustainable over a longer term. Similarly, digitising the ‘Club Marriott’ dining programme was a smart move, as it amplified its reach manifold.
But, Govil did not stop there. “We wondered how we could be smart about deployment and move more fixed costs to variable ones? We right-sized the business, but ensured we remained competitive in the
market we are operating in. And most importantly, we were collaborative – by getting support from our owners and hotel teams, as we looked at this,” he clarified.
While taking this multipronged approach, Govil looked at efficiencies from a process and brand perspective, and got individual units to look at things from a business driver perspective. The work
was harmoniously fused before being rolled out at hotels in India.
ROLLING WITH THE FLOW
Once the first wave ebbed, there was visible recovery, albeit in an erratic fashion. Hotels at many leisure locations began registering pre-COVID occupancy levels with RevPAR that was higher than in 2019. However, Govil realised this would not hold over a longer period.
The second wave was an indication of that foresight. There is more hesitancy amongst travellers, which signals a slower rebound. Fortunately, Govil and his team are better prepared to strategically manage the uncertainties around the future of travel and move to creating solutions at a faster pace. While increased vaccination for the team is on top of his agenda, the next item is ensuring that all properties follow appropriate COVID protocols and do not advocate reckless travel.
After 18 months, he is confident that the industry has finally turned the corner. Globally, vaccinations are on the rise, infections are coming down and restrictions are being eased. More importantly, hotels are ringing with the sounds of guest footfalls.
“While China is leading the recovery, touching almost pre-COVID levels, encouraging signs are seen in Europe and the US. Besides China, in the Asia Pacific markets, we are seeing strong recovery in Australia and New Zealand,” Govil cheerfully stated. “We are forecasting some pretty good numbers even in India.”
This has infused him with a sense of optimism, as companies resume domestic corporate travel gradually. Several hospitality projects, which were on hold, have picked up the pace again. The only hovering dark cloud is that business from international travellers is likely to pick up only in 2022. This comes as a setback for big box hotels in metros, since they largely banked of big groups, conventions, exhibitions and banqueting business. With MICE unlikely to see a fillip soon, this will impact their recovery.
While comparing numbers of Q1 2021 with Q1 2020, Marriott India is close to exceeding the 50% occupancy mark in most markets
However, buoyed by the domestic travel in India, Govil is confident that things will get much better than they were in the third and fourth quarter of 2020, barring a third wave. “We can see this in our forecast – not just in leisure locations, but also in tier 2 markets, where the recovery has been good. If travel reemerges in a staggered manner without any major debacles and we navigate the next two quarters successfully, we should be in a good place in the next six months,” he opined.
Marriott believes it is better positioned to assist hotel owners control costs given its scale and resources.
While comparing numbers of Q1 2021 with Q1 2020, Govil finds that the hospitality group in India is close to exceeding the 50% occupancy mark in most markets. While room rates might be disparate for the two periods, the good news is that occupancies are shoring up. Like most hoteliers, he, too, has his hopes pinned on the Q4, which is also the festive season and a major revenue generating period for the industry.
IN THE PIPELINE
At the start of 2020, Marriott had plans to add 20 new properties to its portfolio of 123 hotels and 16 brands across India. This was a regular expansion practice as the company typically introduces 15 to 20 hotels annually.
The pandemic upended these plans. Projects were delayed due to factors including lack of capital, demand and construction workers. While this extended the timelines for several properties to 2022,
six are scheduled to go on the floor this year.
However, Govil is truly fired about the launch of Marriott’s resorts in Coorg and Jim Corbett National Park as well as the introduction of Moxy in the country. This youth-oriented, experiential brand is a boutique-hotel concept for the millennial traveler. Govil said that the company has already signed up a Moxy in Mumbai, Chennai and Bengaluru and the brand is most likely to debut in Mumbai’s Andheri suburb by end of 2022.
“Though a select-service brand, it is very appealing to today’s generation. So, we see a lot of prospects for this it in India,” he optimistically stated.
THE BIG SHIFT
Many hotel owners, especially independent players, are currently inclined towards conversion friendly
brands which promise speedier go-to- market time and can boost occupancy. Luckily, conversion is a big
focus for Marriott in India. “Many owners are now reviewing this route, because it allows them a plug and play into the Marriott system, ties in well with our brand portfolio, gives them great distribution, and access to Bonvoy loyalty programme customer. It really puts them on the map,” Govil acquiesced.
Some of Marriott’s leading hotels in India are conversion properties, holding the door open for further
growth of conversion properties across APAC in the near future. The maximum appetite rests with its luxury brands, including Autograph Collection and Tribute.
The pandemic saw a renewed interest amongst guests for resorts and long-stay properties.
Interestingly, the pandemic also saw a renewed interest for long-stay properties. This is the perfect setting for Marriott Homes and Villas, a home rental initiative launched in 2019 in Europe and later expanded to the US.
Considering the rising demand from customers, Govil revealed that this brand will make its APAC debut in the not so distant future, though India might have to wait a while. “We are conducting feasibility studies and ascertaining the regulatory environment for this product offering in India. Once all our ducks are lined up, we will certainly bring it in, though not in the immediate few months,” he added.
HAND IN GLOVE
The pandemic considerably altered how hotel owners evaluated their business. Appreciating the urgency to control costs, they are keen to work closely with operators on ways to do this in a scalable fashion, in a bid to maximise RoI.
Govil believed this is where Marriott is better positioned to assist them given its scale and resources. “Today, there are over 125 Marriott branded hotel across 38 locations in India. So, we can benchmark practices to understand why some of costs are off. We can also look at other parameters like available room data or revenue data to streamline cost management,” he pointed out.
Given its global contracts with leading companies, the company can, furthermore, help its owner partners get better pricing for various components, like tech solutions. Govil is quick to point out that technology implementation should not be equated with people replacement.
Instead, it is should be viewed through the lens of doing business in a smarter and more efficient fashion. Take the case of contactless solutions, where travellers use their mobile phone to check into a hotel or as a room key.
While not all guests might subscribe to it, hotels need to have the technology in place to let them make this choice. Similarly, most hotels have mounds of data, most of which have lost relevance in light of the changing dynamics courtesy the pandemic.
Technology can play a critical role in predicting contemporary customer preferences and mapping occupancies accordingly without relying heavily on historical data. Accurately forecasting business levels is critical, since it helps a hotel company plan effective resource deployment, which in turn, impacts profitability and shareholder return.
While claiming that Marriott has the best revenue managementsystems, Govil noted that some changes were made to it in the pre-pandemic months. “We can look at historical data in terms of pricing. However, when you look at the brand indicators, one has to look at mobility data, keep an eye on how restrictions are moving as well as recent travel trends.
We wove all this into our forecasting along with new travel consumption patterns,” he explained. Marriott has already started applying some indices like rates yielding business from the past to overlay on to the current space, offering better value for its hotel partners.
“We always work in tandem with the owners, because ultimately in many cases, they have good knowledge of the local market. And it is about really coming together and aligning so that we have an unified approach to win in those particular markets,” Govil affirmed. Accelerating digital adoption through the ranks, looking after the interests of associates, cementing strategic partnerships, putting customers first – he has surely been busy. Govil’s recent elevation as Senior VP, Operations for Marriott International’s operations across APEC (Asia Pacific excluding China) and his shift to Singapore is bound to keep him on his toes.
Not that Govil is complaining. He is raring to experiment with newer opportunities, and swing for the fences to take the company forward, frequently pausing to assess the situation from multiple vantage points, anticipating what could happen next, and then head back to the arena.
