Healing the Hiccups in Travel and Tourism Industry in 2016

The Indian hospitality industry has risen as one of the main industries driving growth of the services sector in India. It has progressed into an industry that caters to the needs and desires of travel hungry middle class.  According to a report by ICRA, the Indian hotel industry will touch 1.8 billion mark in 2016, however, the pastures are not yet green on the other side.

According to a report by ICRA, the Indian hotel industry will touch 1.8 billion mark in 2016

There are few issues troubling the players from the hospitality industry. Lack of adequate infrastructure is considered to be the Achilles’ heel among the hospitality players.  The hospitality sector has unanimously voiced the need for gaining an ‘infrastructure status.’

Also, inadequate talent pool and high attrition rates are the other teething problems in the hospitality industry

Rajesh Chopra, Senior VP- IT, The Oberoi Group believes that the biggest challenge is the availability of right infrastructure to implement technologies in India. In far areas, network connectivity, lack of ISPs and the speed at which the work needs to be done is a pressing concern. Cloud deployments and mobility depend upon the availability of right quality and uptime of infrastructure.

According to Vijay Choudhary, General Manager-Information Technology, HRH Group of Hotels, point of view, retention of workforce in IT is a pressing concern. For instance, keeping pace with changing technology needs and applications, with the need of high pool of talented manpower and service providers, is a concern. To vanquish all the concerns, “we are addressing these by conducting training very frequently and keeping backup manpower,” said choudhary.

 “The best way to overcome the challenge is to develop the skills in-house, develop a model for outsourcing to manage things in a better way,” said Chopra.

Keeping pace with new technology is a herculean task. On that note, Agarwal said that the technology has been evolving at such a rapid pace that it can be challenging to incorporate newer technology benefits into the business as quickly as possible and remain focused on ROI.

Highlighting the business challenges, Kamlesh Barot, Director –VIE Hospitality, said, “The other business challenges faced universally by this industry are water, fuel, land with hospitality infrastructure, government over-taxation and inflationary input costs.”

The picture doesn’t seem that rosy for online travel agencies.  Integration at the back end with the hotels seems to be a tough proposition. Himanshu Verma, CTO, Yatra.com endorses that point by saying, “hotels don’t have standard and centralized way to manage their inventory and pricing, which may lead to broken experience for the users.”

A large no of hotels in India is to have the technology readiness in place to update their inventory.  He further went on to say, to book a room without any human intervention would be tough.

 INFORMATION TECHNOLOGY AS A CHANGE CATALYST

 What is the role of IT in accelerating innovation in the hospitality sector? Well, Information technology in the hospitality industry has grown manifold over the past 20 years.  The world travel, tourism and hospitality has been transformed due to developments in innovation and information technology. Interestingly, many hurdles in the hospitality industry have been put to rest due to IT evolution.

On IT giving a major fillip to the hospitality industry, Chopra is of the opinion:  “IT plays a significant role in cost reduction, as a good technology solution can help in energy savings and also helps in analyzing the behavior of customers.”

Choudhry intones that, “the interaction with guests digitally helps to generate Data and Analytics helping to predict the behavior of guest pre-arrival or post arrival.”

Verma believes that IT has played a significant and strategic role in their business expansion as it has helped develop tools to collect, store, manage, secure and distribute data effectively. “Over the years, Yatra has been transforming itself from an IT enabled online travel services company to a travel technology company and today technology is at the front and center of what we are and what we do,” he says. 

 GREAT EXPECTATIONS FROM THE GOVERNMENT IN 2016

 Till now, the government has done a lot to give thrust to the travel and tourism market. The present government has mandated that tourism should form an important fourth pillar for them.  However, there are few expectations by the players in travel and tourism market.

“The Infrastructure definitely needs a lot of attention. The bandwidth needs to be streamlined in order  to effortlessly communicate with the people. Also, payment gateways for the e-commerce sites needs attention. We are expecting the government to look into the matter and show us a good solution,” said Verma.

 “In 2016, the much awaited GST, easy and efficient taxation, single window clearance both at the State as well as the Center, less regulations are what we expect from the government to boost our industry,” says Barot.

Choudhry is of the view that as hospitality industry brings foreign exchange, it should be treated as ‘export revenue’ at par with the export industry by exempting it from Service Tax and VAT. This way the players/investors/promoters are encouraged and the potential of hospitality industry can be exemplified by getting more revenue and reach.

With so many expectations, it is high time, the government pays heed to the demands of the industry to improve India’s travel and tourism competitiveness.