The luxury hospitality sector is gradually reviving after the second wave of Covid-19. Many from the vaccinated urban population want to take a break and go on a holiday with friends and family. This segment is willing to pay a higher price to stay at premium properties, driving the revival.The Oberoi Group’s big bosses, CEO Vikram Oberoi and Sanjiv Kapoor, who recently took over as president, believe that the luxury leisure hospitality sector will revive sooner than other segments and business hotels. They talk to Forbes India about The Oberoi Group’s short- and long-term plans, travel trends and the business benefits of vaccinating all their eligible 7,500 employees and third-party aggregators across their 33 hotels, two cruise liners and a motor vessel across seven countries. Q. How is the luxury travel and hospitality industry faring currently?Sanjiv Kapoor: After the second wave, business has picked up. Our leisure properties are doing very well, especially the one in the hills. They are running full over the weekends. The confidence in travelling is back.
Those travelling are mostly all vaccinated. We have also been working with our colleagues in the industry and promoting the idea that the fully vaccinated must be allowed to travel freely and should no longer require a negative RT-PCR test or mandatory quarantine in any kind of domestic travel. We are also hoping that vaccinated foreign travellers should be allowed to visit India. This will help the entire travel industry in India—hotels, airlines, travel agents and other related parties. Q. Do you think India is seeing/will see revenge travel? Vikram Oberoi: We have all been limited in what we can do for a long, long time. Now we want to go visit friends and families, go to places we want to see, and just meet and hug a colleague. To physically meet a guest and customer is very important.
When most people would have gotten their second shot of the vaccine, we will see a return in travel. I don’t think there is any substitute for meeting face-to-face in person.
Sanjiv Kapoor: Last week, we launched a few special packages for staycations and workations for long stays. There is an uptick in bookings. People want to take a break from the stress we have all gone through.
Leisure travel will bounce back faster. It did even after the first wave. Business travel will take longer to revive. Companies are cautious about letting their employees travel before they are fully vaccinated. But we expect this segment to pick up soon as well. Multi-million-dollar deals don’t happen on Zoom.
Q. The Oberoi Group has managed to vaccinate all its employees with at least one dose. How difficult/easy was this?Vikram Oberoi: We all did this together. Not just Sanjiv and I but all our colleagues. It was very critical to create awareness and knowledge in our hotels. We didn’t mandate that everybody take a shot. What we said is this is something that is in the best interest of all the employees and their families. We have a very young team and most of them live with their parents or someone older. My colleagues and I started working on the vaccination drive right back when only Indians above the age of 65 were being vaccinated. Our general managers, trainee managers, resource managers and even department heads at the hotels did a stellar job in creating awareness, which was very important to achieve this milestone. We started poster campaigns, it was discussed in departmental meetings, in general managers’ addresses to their team members. We used all our tools of communication to stress the importance of vaccination. There were questions and answers written down, so the leaders knew what answers to give when people had questions.
More importantly, what gets measured gets done. We had daily updates on how we are progressing. If any hotels were falling behind, we asked them what can be done to help and support them.
Sanjiv Kapoor: We have properties all over the country, in different states, which have different rules. What it takes to achieve such a feat is a lot of co-ordination. The entire project was managed by the Human Resources team in the corporate office in Delhi but implemented by the general managers of the hotels. Depending on the property, they either worked with local hospitals or municipalities to get designated vaccination blocks and time slots. In some smaller cities and remote places, it took a little bit longer as making arrangements there is harder. The great thing is that 100 percent of our employees, those eligible to take the shot, have taken their first dose. A few of our employees were not eligible as they suffered from Covid-19 in the recent past.
This is one of the first things I took up when I joined The Oberoi Group about four weeks ago. The reason I thought the vaccination drive was very important to start with is because, first, the safety of the staff is very important. Second, it also reassures guests that they are safe and being handled by people who are all vaccinated. When we started, we spoke to a company that had already vaccinated all its employees for advice. The whole corporate world is very interested in getting all its people vaccinated and has been sharing best practices to do so and do it fast. Q. What does this mean for The Oberoi Group’s business?Sanjiv Kapoor: It is very important for the guests to know that we walk the talk. They should be reassured that we ourselves are vaccinated and that interacting with our staff is low risk.
Also, we just do not talk about Covid protocols but enforce it in all our hotels. We insist that masks must be always worn and worn properly when in public spaces. Even in the restaurants, guests are asked to wear masks when not eating. Our guests appreciate that we are not confusing service and safety. We do not compromise safety for service. We don’t stop at easy things like cleaning and sanitising the hotels. We are driving a behavioural change. Q. How is the group preparing for the anticipated third wave?Sanjiv Kapoor: We know the risk of the third wave is surely there. And that is why we implemented the vaccination drive for all our employees. We are also going to ensure that all our colleagues get their second dose soon as well. We will not be letting our guard down.
Q. What are the major luxury travel trends in India today?Sanjiv Kapoor: After travel started opening up post the first wave, many Indians who would usually go to foreign destinations for a holiday are now booking our villa properties. Our countrymen have discovered the Indian market and they have been surprised by how good the service and the experiences are. It is a huge positive for the hospitality industry.
Another interesting thing I have noticed is that more business class seats of an airplane are occupied than the economy class. This means people are willing to pay more for being in a more exclusive setting. That bodes well for the premium travel segment. Even for us, our most premium properties with the highest room rates have seen more demand. Vikram Oberoi: We have an amazing country, which is so diverse. I recently went to Ranthambore with my family, and we had incredible tiger sightings. I was able to take a short break and spend time with my children without travelling too much. I think there is a huge benefit in travelling in our country. Q. How important is sustainability for the group?Vikram Oberoi: Sustainability is a priority for us. We utilise solar energy in five of our hotels and the number will grow. The challenge, however, is that it is difficult to make the transition to solar energy faster because the legislation does not favour moving to renewable energy. We owe it to the future generations to adopt a uniform system across states that encourages businesses to invest in renewable sources of power. We are also working on eliminating plastic from our properties. The initiative was put on hold because of the pandemic but we would like to restart it. In our restaurants we have glass bottles of mineral water, but in our rooms we still have plastic bottles, and we would like to change that in all locations soon. We have also been encouraging our colleagues to do little things that each of us can do to save the environment. We are trying to drive the behavioural change of being more environmentally conscious. Q. How important are sustainability initiatives to guests?Vikram Oberoi: I have spent quite a lot of time looking at guest feedback, talking to our general managers, and I wish that these (guest appreciation and decision-making) were more than what it is today.
A recent leaked report on global warming shows how rapidly climate change is affecting us. Some parts of the US are registering temperatures as high as 150 degrees Fahrenheit, which are unheard of in those areas. In global warming, you can see extremes of temperatures, and in the coming years many people will be at the risk of being displaced because of rising sea levels. There is an urgent need for action. I have children and I worry for them. Q. How soon do you think the Indian luxury hospitality sector will revive?Vikram Oberoi: I think vaccination is the key. Currently, I think India is vaccinating 8.6 million people a day. If we can hit the 10 million mark, we will go a long way towards vaccinations. And our industry will revive. I cannot tell you exactly when, but we are hoping that it’s by the end of this year.
Our business is people’s business. We start employing people at a very young age, just as they start becoming adults. The pandemic has impacted the economy but also our industry’s ability in giving employment. Sanjiv Kapoor: India has vaccinated 5 to 6 percent of its population. It is interesting to note that this population most likely represents the segment that travels by air and has been vaccinated. It is the same population that will stay in nicer hotels. Hence, the premium travel sector will rebound faster.
After 30 to 40 percent of the country is vaccinated, we will start seeing normalcy in the business. But when we say normal, it is getting back to 2019 levels. This means you have lost two or three years of growth. I think by next year we should be back to normal. Also, my travel resumes next week, and I will be going to all our hotels.
Q. What are the Oberoi Group’s short-term and long-term plans?Sanjiv Kapoor: In the short term, we want to revive our business and get back on our feet in terms of occupancy and revenue and do everything possible to achieve that.
In the long term, our goal is to grow. We haven’t added as many new properties as some other players in the industry have. As our executive chairman (Prithviraj Singh Oberoi) says, for us its quality over quantity and that will always hold true. But at the same time, we do understand that there is a need to grow our footprint in India and abroad. We are open to all kinds of opportunities–joint ventures, management contracts and more. There are also hotels looking for change of ownership. You might see a lot of activities on that front. But everything we do has to be of superior quality and service and must have good returns.