In an environment of lower revenues, high fixed costs, and less than optimal asset returns, Harshavardhan Neotia, Chairman of Ambuja Neotia, believes that hospitality players will need to determine which areas to priorities and invest in. The Kolkata based real estate company focused on equipping and positioning its resorts as long-stay, work-from-home places. Moving forward, it plans to develop more properties ideal for use as staycations or workcations.
It is introducing a 126-room hotel in Patna in partnership with Indian Hotels Company Ltd (IHCL), the first branded luxury hotel in the city. “We also have plans to build hotels in Darjeeling and Lataguri, Sundarbans and Digha,” Neotia revealed. “We have chalked out plans to develop four Altair in eastern India, including the existing property in Kolkata. We also hope to launch Taj City Centre (erstwhile Swissotel) in New Town by April 2022 while the61-key Taj Guras Kutir in Sikkim will open in FY 2022-23.”
BUILDING VALUE
Hoteliers, including the Ambuja Neotia, reduced capital-expenditure spending in 2020 because of the pandemic. The company took steps to ensure that the group’s debt-equity ratio was not distorted. “Because of the pandemic, FY21 witnessed contracted revenues and operating losses as hospitality players struggled to meet their fixed expenses and existing obligations. This increased debt levels as companies opted for loan moratoriums and borrowed incrementally for liquidity and working capital. We re-evaluated the share of fixed costs in favor of a more variable structure to benefit from a hybrid model till our business attains pre-pandemic levels,” Neotia stated.
In an environment of lower revenues, high fixed costs and less than optimal asset returns, he believed hospitality players would need to determine which areas to priorities and invest in. The company, therefore, changed its spending emphasis, focusing on matters like cleaning and sanitation equipment, reconfiguring F&B outlets and installing air-filtration systems to keep hotels functioning and relevant.
The marketing team developed new strategies and advertised in a targeted fashion to ensure proactive communication ongoing with customers and channel partners. Social media was used aggressively to attract domestic clientele.
This apart, it has decided to launch its new properties with minimum staff. “We intend to increase employee strength in these properties once the business reaches pre-Covid levels,” Neotia assured. While the tourism and hospitality industries may be on their knees financially, he believes the spirit of hospitality has arguably never been stronger.
