Industry Structure and Development
The travel and tourism industry is the largest industry in the world. The structure of
the tourism industry is quite complex, involving many components of tourism. There are six
major components of tourism, These are: tourist boards, travel services, accommodation
services, conferences and events, attractions and tourism services. With many different
types of tourism and types of businesses operating within the tourism industry, from
private companies to charities and NGOs, the structure of the tourism industry is made up
of many different segments and components. The components of tourism make up the entire
tourism system. There are several integral components of tourism. Without these
components, the tourism industry would struggle to function. This was demonstrated, for
example, during the period of Coronavirus pandemic, which halted air travel around the
world. Travel services are a vital component of tourism and without these services being
operational, the tourism industry struggled to survive!
Impact of Pandemic Covid19 on Tourism Industry in India
COVID has left behind an unprecedented impact on the global economy. Tourism and
hospitality is coming to the terms with the corona virus epidemic.
Hospitality and Tourism are one of the biggest and fastest-growing sectors which have
been considered as a vulnerable industry. The hotel bookings have been severely hit
because travel has come down drastically. The change in the perception of travellers is
important to bring their confidence back to travel.
The number one consideration post COVID will be on health and safety. The key is to
provide physical evidence of the hotels concern for health and safety.
There were expectations that the domestic demand will start to pick up during the end
of 2020, but with re-imposed lockdowns, the travelers have held back their plans due to
renewed fear.
As per hotel consultancy firm HVS Anarock, the hotel occupancy rates stayed at about 26
per cent across India in September 2020 - rising from just 10 per cent in April this year.
As per industry experts, occupancy and Average Daily Rate (ADR) are expected to reach
pre-COVID levels by 2022 & 2023 respectively - assuming that a vaccine is in place and
becomes widely available before the end of the year.
Opportunities and Outlook
The hospitality sector in India primarily thrives on tourism, which is an important
source of foreign exchange and employment. The government has taken several initiatives
which play a major role in the growth of the hotel industry.
India is a large market for travel and tourism. It offers a diverse portfolio of niche
tourism products - adventure, medical, wellness, sports, MICE, eco-tourism, film, rural
and religious tourism. India has been recognized as a destination for spiritual tourism
for domestic and international tourists. In the Independence speech from Red Fort, Honble
Prime Minister Mr. Narendra Modi urged people to visit 15 domestic tourist destinations in
India by 2022 to promote tourism. India ranked 34 in the Travel & Tourism
Competitiveness Report 2019 published by the World Economic Forum.
The Ministry of Tourism launched the NIDHI portal to understand the geographical spread
of the hospitality sector, its size, structure and existing capacity in the country. NIDHI
will serve as a common data repository for the Ministry of Tourism, State Departments of
Tourism and Industry; this will enable the Central and State Governments to deliver better
support and services including policies and strategies for the tourism sector.
The launch of several branding and marketing initiatives by the Government of India
such as ‘Incredible India! and ‘Athiti Devo Bhava has provided a focused
impetus to growth. The Indian Government has also released a fresh category of visa - the
medical visa or M-visa, to encourage medical tourism in the country. The Government is
working to achieve 1% share in worlds international tourist arrivals by 2021 and 2% share
by 2025.
Amid the relaxation provided by the government after the covid lockdown, the Indian
Association of Tour Operators (IATO) has urged the government to finalise a roadmap for
resumption of international flights and facilitate e-visas and tourist visas. The Indian
Railway Catering and Tourism Corporation (IRCTC) runs a series of Bharat Darshan tourist
trains aimed at taking people to various pilgrimages across the country.
Subsequently in November end, India introduced a graded relaxation of its visa and
travel restrictions for more categories of foreign nationals and Indian nationals.
Outlook
Post pandemic crisis, the Government plans to tap into regional tourism by opening
doors for South Asian country tourists.
The Government is also making serious efforts to boost investment in the tourism
sector. In the hotel and tourism sector, 100% FDI (Foreign Direct Investment) is allowed
through the automatic route.
Increasing Foreign Tourist Arrivals and domestic tourists, rise in household incomes,
fastgrowing internet and smartphone penetration are some factors that encourage growth of
the industry. Tourists are likely to demand more personalization and customization,
especially in the case of millennials. This is expected to increase the tourism industrys
reliance on technology start-ups.
Tourism not only creates jobs in the tertiary sector, it also encourages growth in the
primary and secondary sectors of industry.
Threats, Risks & Concerns
The hospitality industry has struggled in the past year and will continue to recover
and grow in 2021.
Hospitality businesses are continually faced with many challenges regarding trends and
customer expectations; the industry is rapidly growing, and organisations are struggling
to keep up with the demand.
Employee management is a major challenge faced by the industry. The attrition rate has
gone up due to the lack of workforce quality and increased competition for trained
employees from competing service sectors, such as aviation.
Lack of Infrastructure:
Over the past year technology has ramped up within the hospitality industry; self
check-ins, contactless service, online ordering and payment via apps has become the new
norm.
Its a challenge for the industry to provide a good customer experience with a mix of
human and tech-enabled interactions; customers crave experience thus the company must be
doing everything they can to adhere to this. If the technology system is not in place at
all or is down it can stop the whole production system, thus organisations need to have
back-up plans in place to be prepared for any issue thrown at them with the world of
technology.
Environmentally Friendly Practices
Environmental pressures continue to shape todays hospitality industry, over the past
10 years and it has been a key focus for all organisations to invest in. Sustainable
practices make hospitality companies stand out, consumers want to know that the business
they purchase from follow environmentally, socially and culturally sound practices.
Especially evident with Millennials and Generations Zers, consumers will pay more for
products that dont harm the environment or affect wildlife.
A complete overhaul of the organisations systems and products to follow sustainable
measures will become expensive and wont last, whereas small steps over time to adhere to
socially responsible guidelines will have a lasting effect on your customers and the
environment, increasing the companys reputation. A massive challenge that businesses will
continue to face in the future as sustainability is becoming a way of life to the public
and organisations.
Personalising Customers Experience
Customers today have grown to expect to be recognised and treated as individuals,
rather than a steam-lined operations system. While consumers expect a greater level of
personalization, businesses still struggle to translate data and insights into actions.
This information provides companies with customers past buying habits and their
interests, enabling the hospitality industry to tailor their offers and promotions to
specific customers.
The industry needs to continually find new and unique ways to personalise a customers
experience to keep a competitive edge.
Loyalty Programs
Loyalty programs are one of the top-level marketing strategies to obtain returning
customers and most individuals expect a loyalty system when purchasing from an business.
The hospitality industry battles each other to attract a loyal customer base and provide
the best deals / product to consumers.
There are multiple challenges companies face when implementing a loyalty program mainly
inaccessibility and confusion, as some customers will not participate in a system that has
complex accessibility or that people do not understand. Furthermore, loyalty programs that
are unappealing and obsolete to consumers are also extremely unsuccessful.
IMPACT OF COVID-19 DURING 2020-21 TO OUR HOTEL
The business has been impacted during the period on account of COVID-19. The Company
witnessed softer revenues due to the lockdown imposed by the government. With the
unlocking of restrictions in a phased manner, the Company expects the business to
gradually improve. The Company has ensured the liquidity position and taken steps to meet
its working capital requirements. Further, steps for cost optimisation at operational
levels have been implemented. Accordingly, the financial results of the Company have been
prepared on a going concern basis.
The Company has also assessed the possible impact of COVID-19 in preparation of the
fiinancial results, including but not limited to its assessment of liquidity and going
concern assumption, recoverable values of its financial and non-financial assets and
impact on revenues and costs. Based on the current estimates, the Company does not expect
any significant impact on the carrying values of its assets. The impact of Covid-19 may be
different from that estimated as at the date of approval of these financial results and
the Company will continue to closely monitor any material changes to future economic
conditions.
Adequate safety measures are taken at our hotel units based on the guidelines issued by
the Central/ State/Municipal authorities such as sanitisation, social distancing,
mandatory mask wearing, thermal check at the gate, and maintaining proper hygiene at the
work place The company has taken proper precautionary measures to ensure the safety and
health of our employees and in-house guests.
SEGMENT WISE PERFORMANCE :
The company has only one segment viz. hoteliering. Accordingly the performance is
furnished hereunder.
Total turnover for the year ended 31st March,2021 amounted to Rs. 2076.69 lakhs
decreased by Rs. 4713.37 lakhs as compared to the previous year turnover of Rs.6790.06
lakhs. Total expenditure for the year ended 31st March, 2021 amounted to Rs. 2487.77 lakhs
decreased by Rs. 3689.32 lakhs as compared to the previous year. The profit (EBITDA)
before depreciation, finance cost and tax for the year ended 31st March, 2021 amounted to
Rs. 5.61 lakhs as against the profit of Rs. 1126.58 lakhs over the corresponding period
last year. The deferred tax for the year ended 31st March, 2021 amounted to Rs. -43.97
lakhs. The Loss after deferred tax for the year ended 31st March, 2021 stood at Rs.
-409.80 lakhs as against profit of Rs. 427.74 lakhs.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
Your company has in place an adequate internal control system. The internal controls
are designed to provide reasonable assurance regarding the effectiveness and efficiency of
operations, the adequacy of safeguards for assets, the reliability of financial controls,
and compliance with applicable laws and regulations, protecting the assets from
unauthorized use of losses. The internal controls are supplemented by the programme of
internal audit. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL
PERFORMANCE / BUSINESS PERFORMANCE.
(Rs. in Lakhs)
| Particulars |
31.03.2021 |
31.03.2020 |
% of change |
| Food and Beverages |
745.77 |
3247.9 |
-77.04 |
| Rooms |
989.24 |
2625.17 |
-62.32 |
| Banquets Halls |
9.50 |
81.22 |
-88.30 |
| Spa Collections |
44.91 |
142.06 |
-68.39 |
| Gym Collections |
138.37 |
439.13 |
-68.49 |
| Franchise |
4.80 |
99.19 |
-95.16 |
| Other Services |
29.78 |
93.77 |
-68.24 |
| Other Income |
114.32 |
61.60 |
85.58 |
| Overall Income |
2076.69 |
6790.06 |
-69.42 |
| Occupancy(%) |
44.4% |
77% |
-42.34 |
Overall income decreased by Rs. 4713.37 lakhs from Rs. 6790.06 lakhs to Rs. 2076.69
lakhs. Occupancy decreased by 42.34% from 77% to 44.4%
MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT.
Your company sincerely believes that its employees are its vital assets and hence in
order to keep its employees motivated and changed, your company provides them a good
working environment so that they are able to leverage their full potential. The HR
department updates its HR policies, SOP practice, and processes so as to enable and
empower its employees.
Your company provides the following welfare, employee health-conscious, HR activities
and training to the companys employees.
• Blood Donate Camp
• Christmas Carol Singing
• Hygiene rate classes and auditing the rate of hygiene.
• First Aid Class
• Food Handlers Medical Checkup as per FSSAI Act
• Food Hygiene Awareness
• Food Safety Certificate Program
• Food Wastage Awareness
• Bajan and Yoga class
• Safety & Preventive Maintenance Training
• Covid preventive class
• Zoom class for health awareness
• Womens Day celebration
• Carona test camp for all
• Vaccinated more than 45 years age staff
• Food presentation and platting techniques classes to all chef.
• Cook without fire competition along with IOC.
• Making pizza: class conducted by Mr.Ciroze (foreign chef)
• Train the trainer programme.
By giving these schemes, caring, supporting and training programmes, the employees
become loyal to the company and thereby the employee attrition rate is minimized.
The training focuses on improving high-quality services based on the concept of
customer delight. All employees should attend the training programme specially framed for
96 hours of training for each and it is mandatory.
| Key Financial Ratios |
31.03.2021 |
31.03.2020 |
Difference |
| Debtors Turn Over |
10.28 |
17.28 |
-7.00 |
| Inventory Turnover |
12.99 |
48.76 |
-35.77 |
| Interest Coverage Ratio |
-9.10 |
11.65 |
-20.75 |
| Current Ratio |
1.08 |
1.38 |
-0.30 |
| Debt Equity Ratio |
0.05 |
0.01 |
0.04 |
| Operating Profit Margin (%) |
4.22% |
28.20% |
-23.98 |
| Net Profit Margin(%) |
-20.88% |
6.36% |
-27.24 |
| Return on Networth |
-0.07% |
0.07% |
-0.14 |
Explanation for change in the key financial ratios :
| Debtors Turn Over |
: Change is due to decrease in receivables |
| Interest Coverage Ratio |
: Change is due to decrease in lease liabilities |
| Current Ratio |
: Change is due to decrease in current assests |
| Debt Equity Ratio |
: No change |
CAUTIONARY STATEMENT :
The information contained in the Management Discussion and Analysis regarding companys
estimates, expectations, projections, guidance are based on assumptions and expectations
of future events. The company takes no responsibility on such statements since the company
exercises no control over the events that take place in future. The actual results may
differ from those expressed or implied. The changes in the domestic and global economic
conditions and Government regulations, tax laws and other statutes may affect the
hospitality industry.
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