Having said that, we expect branded supply to grow as an increasing number of independent hotels are likely to join brands to leverage their guest confidence & trust in the COVID era. Franchising is expected to see more traction, as it provides a win-win growth model with lesser risk for both hotel brands as well as asset owners.

 

A few hotels may also consider repurposing as co-working and boutique office space.

 

2. Mixed-use developments: This is going to be the most sustainable model for hotels going forward as they leverage the best of each asset class, while hedging the risks for the investors and enhancing the overall experience for the guests. These projects provide better returns to investors by maximizing land-use efficiency, utilizing FSI optimally and lowering capital costs, thus, improving the viability of the hotel project.

 
3. Ancillary revenues will be a key focus area: The ongoing crisis forced the hospitality sector to find innovative ways to utilize their assets, in the process opening newer ancillary revenue streams. Hoteliers – having realized the true potential of ancillary revenues in improving the topline – are likely to follow the aviation industry’s lead, making every enhancement in customer experience payable and not gratis, as the industry has been providing for time immemorial.
 
4. Outsourcing of F&B spaces in hotels to independent operators to increase: Hoteliers will reimagine F&B by outsourcing hotel outlets to standalone marquee restaurants that had made their mark in the pre-COVID era but are now facing an existential crisis post-COVID. This model can be beneficial for both the stakeholders, as hotels get an opportunity to win-back the customer share they lost to standalone restaurants over the last few years, while the restaurants get an opportunity to renew operations and benefit from captive clientele as hotels get back to normalcy.
 
5. Vacation Home Rentals to become one of the fastest growing segments: Traveller & guest preferences have evolved significantly in the last one year, with hygiene, cleanliness, safety, and privacy becoming their top priorities. People will prefer smaller, independent, and contained spaces, which will be considered ‘safe havens’ for travel, specifically in the upper-upscale category. These evolving preferences will lead to the growth of Vacation Home Rentals in the country, especially when the segment develops and professionalizes further, as they provide guests additional privacy and better value compared to a hotel.
 
6. Technology will bring fundamental changes in hotel operations: Keyless/mobile check-in and check-out, digital menus and contactless payments have become the standard today. Technology adoption for hotels post the COVID impact will be at a much faster pace than witnessed earlier by the sector. Efficient usage of technology will be the new focus as it helps in reducing both capital and operating costs, improving profitability, and streamlining processes, while enhancing guest experience and personalization.
 
7. ‘More with Less’ to be the new staffing mantra: Staff to room ratios are expected to reduce going forward. Hotels were forced to resort to job cuts in 2020 to reduce costs and have realized that the earlier staffing ratio may not be needed to operate efficiently. Moreover, almost every aspect of ‘guest service’ is now available through the guests’ mobile device and hotels are also likely to increase the usage of predictive data analytics to personalize guest services in the post-COVID era.
 
8. Design changes: Going forward, we expect the industry to embrace substantial design changes in hotels – smaller lobbies, keyless check-ins, lesser number of specialty restaurants, etc. – by incorporating some of the best practices followed in more mature hospitality markets. Overbuilding and overspending on hotels has been a perennial problem in the sector, which we now expect will be corrected.
 
9. Hotel REITs: Hotel REITs are also likely to be launched as several assets and asset owners come under financial stress and look for exit. M&A activity in the industry is also expected to increase in the second half of 2021 due to the same reason.
 
10. Rethinking the future with greater focus on sustainability: Last but not the least, sustainability will become more than a buzzword going forward as the only silver lining during the lockdown was the positive impact it had on the environment. Adopting eco-friendly practices will not only help hotels win over travellers, who will increasingly prefer ‘green’ holidays in the COVID era but will also help in reducing costs and improving the bottom line in the longer run. The current crisis has been an eye-opener of sorts for all of us and it is imperative that all the stakeholders collaborate to increase the sector’s focus on sustainability by adopting greener practices as we gradually embark on the path to recovery.