Sailing in rough weather

Global Meltdown and Current Economic Scenario

In today’s business world there is no global barrier and this meltdown has griped most of the countries of the world affecting all sphere of business, manufacturing, service, banking, stock market etc. In the area of Hospitality, Terrorism has dented its growth and sustainability. Service industry globally has started feeling the pinch. Purchasing power is declined and affect is being seen on hospitality sector also.
Powered by increased government spending on infrastructure, revival is being seen in Cement, Steel and auto sector. ‘Revival of demand would also start reflecting in the prices, which were up in March after sharply falling in the previous four months” The Centre for Monitoring Indian Economy (CMIE) said in its monthly review of the Indian economy.

Hope is being seen in the current economic scenario in India:

Economy showing signs of recovery. As per the latest reports India isn’t too badly off despite global crisis. India needs effective handling of the situation. Signs of healing are apparent in sectors like auto, steel and cements. A technical research report by US-based Elliot Wave International has termed India, Taiwan and New Zealand as potential “baby bulls” the report also show positive signs for reaching up to new heights.

Hospitality Growth charter
We are hopeful that very soon we shall establish ourselves as global economic superpower, hospitality sector will boom again by the end of 2009 and hopefully 2010 will be better . April 2009 saw a significant improvement in foreign tourist inflows, country registered only 3% decline in foreign visitors in April 2009 compared to a sharp decline of 18 % in January 2009. Foreign tourist arrival rise compared to sharp fall in last quarter of Financial Year 09.
Organizations are recommending to refurbish the Indian tourism product and market India as a wholesome, safe and secure destination. FICCI’s tourism agenda focuses on tourist’s security, confidence building measures, training of personnel, up gradation of infrastructure, rationalisation of taxes, familiarisation tours of foreign buyers, new marketing strategies focussing on short haul destination, easy availability of visa and some aggressive press and PR activities.
The role of Government and media in instilling confidence in the tourism sector will help the situation from deterioration.
Like the product life cycle growth and down trend are imminent, but what is important is to foresee and plan in advance these challenges and try to handle them effectively.

Focusing on domestic sources generating demand
It is very clear that the momentum of the growth rate of the Indian Hospitality under these circumstances can be pushed up largely by concentrating on raising domestic sources of growth by boosting effective demand and creating more infrastructural support services and increasing output and employment for putting additional purchasing power.

Managing Finances and Cost
Better management of the situation will help organization to sail their ship smoothly during turbulances. Managing Finances and cost and building confidence among stakeholders is challenge. Managing cost along with the profit target will be important consideration and that has to
be assessed periodically. Enhancement of operational performances, reducing overheads and going for targeted cuts can manage our cost base. We need to be moderate in our all approaches. Monitoring performance against financial and non financial areas is the priority. Continuous evaluation of the business forecast and performance & flexibility in approach as per the feed back will help business in taking strategic approach. Which in turn will reduce the impact of risk as per our analysis & forecast. Flexibility in financial and workforce scenario should be adopted quickly. Plan for different scenario with strategic options should be ready to limit potential losses and generating cash flows. Generation of business volume than managing the rates can be the strategy now to keep ourselves afloat the surface of water.

Scope for Creativity
Creativity at this tough time will keep us sailing. Value added services, guest services and product amenities may be focused. Continuous analysis and evaluation of product and customer will help us in getting information helping us to focus on the key risk areas and take timely decisions.Use of latest communication tools and technologies, multi channel web-based distribution systems to attract newer and younger consumers. Presence in the blogs, facebook sites can help to attract new consumers. These network has provided hotels with a far wider and more cost effective method of reaching different markets.

MIS as tool for decision making
Decision making need to be based upon facts. Reliable management information is the key. Study of local competitors and their offers and giving better than them. Historical analysis will help us to know where to target cost ratios. Customer is King hence making all out efforts in identifying customer perceived quality and what customer value most?
Creative using of strength as an opportunity in difficult time is going to help us.


We have to Focus on People
Recognizing the value of our people and maintaining regular clear communication with them. Retraining and motivating the best people is critical to the future. Firm commitment and believe in our self and in our efforts are equally important to achieve success. It is really a challenge to be motivated. Better utilization of manpower with respect to performance standard and productivity will help in a great way in utilizing efficiency of employee in a correct manner.


Quality at the First and all time

Strengthen personalized service. In recession highest quality of service is needed so that word of mouth strategy works. Moment of truth, word of mouth marketing techniques is to be focused. Not focusing only to premier market but to cater for the other segment, considering the volume of the business can also give better return. Focusing on quality for increasing business volume by way of “ Moment of Truth” is going to boost business.


Effective Utilization of Companies Resources

Effective utilization of companies all resources is important. From IT, Marketing and advertisement. Underutilization of these tools will be disastrous. Saving money this time shall be helpful.cutting cost should not damage ability to sell and deliver products and services. Downsizing should not create long term negative repercussions. Greater senior management accountability has to be priority.


Businesses that understand the situation can navigate a down turn in a way that makes the most of opportunities arising. External market information are most important to make offensive strategies at this moment.