Gloom & Doom

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Gloom & Doom

Sunday, 09 May 2021 | Tarun Sibal

Gloom & Doom

The second wave of the pandemic has hit the hospitality industry in more ways than one. It has made a mockery of all the insights, predictions and readiness. By the time, this ends and some sort of normalcy prevails, we will all be starting from a sub-zero level, writes Tarun Sibal

Restaurants are built for social contact. Eating out gives joy, it allows people to create memories that last a lifetime. I am optimistic that if we are able to survive this period, we will resurge. We will not be the same; the numbers will be different, the discussions will be different, but we will have something new that we can build upon. Once the vaccine is available, all this will be behind us.

I wrote this about a year ago and till about February 2021, it was all falling into place as predicted. The worst was over, or so we presumed. The Vaccine Drive, the flattening of the curve, the return of the positive consumer sentiment, revenge buying, new launches in the restaurant and dining-in ecosystem, and our favourite food awards all seemed to indicate that after languishing in the deep end after the first coronavirus wave, the restaurant industry had finally found its feet again.

We also saw leniency in travel restrictions, the hospitality industry investing heavily in digital-first initiatives, a rise in staycations, all-inclusive packages, contactless dining, chef-led delivery models, restaurants full to (the new) capacity, return of the big fat Indian weddings, the Sunday night bazaars, tourism regaining acceptance in the Maldives, Mussoorie and Goa. We saw it all and became a part of the counter punch. We were close to the end of the tunnel and it seemed there was enough light there to make it through.

It became an exciting time for food and beverage players as the vertical got some due course correction. People who did not have their skin in the game moved out, the investors moved out, the sharks moved out. There was a return to hardcore hospitality that was product and content centric. We had no surprises on the places that did well post the first lockdown. These were establishments that were built on the core competencies of hospitality, product and service orientation.

The second wave has done damage in more ways than one. It has made a mockery of all our insights, predictions and readiness. By the time, this ends and we attain herd immunity, and some sort of normalcy prevails, we will all be starting from a sub-zero level. For the Food and Beverage Industry vertical, globally things have improved drastically. People are back to eating out, spring break is almost back, and summer set to bloom. For us in India, the vision will take its time.

The Indian Food and Beverage Industry that brings in roughly 60 billion dollars annually and employs around 7 million people (or I may say 7 million families), was directly impacted when the first wave hit. The fraternity was deeply worried and the sentiment to survive was breaking down on an hourly basis. We were the first to close, and last to open. Half of us closed never to open our doors again, but the rest fought back. We paid our dues, gave license fees, rents, salaries, electricity bills, got down to a 50 percent capacity, invested in new technology, invested to ensure guest and employee safety, worked on contactless everything, surface cleaning, digitised menus and payment gateways, reduced staff, immunity boosting menus, helped guests to cook at home, gave back to the community and even became Covid warriors ourselves.

Were we prepared for it the first time around? Absolutely not, but we came out with plausible solutions, swinging hard to knock down our opponent. We were ready to embrace and build the new normal as per the new rules of engagement, and the consumer played ball too. It was all coming together, the salaries were almost back to pre-Covid days, sales were up to 70%, the staff strength was increasing, the grandiose caterings were happening and the sentiment to celebrate was back. Within the industry we started using the term “Post Covid” and I think we jumped the gun.

 

Surprise Surprise

I can’t say it happened overnight but the turn of events was extremely swift. From a fast-paced road to recovery to being the #1 country “in covid terms” broke us badly. For the fraternity, it meant us going back to the drawing board without new answers to the same old problem that has now returned with a vengeance. As I write this piece, we are closed. We started with a night curfew (surprisingly cinemas were on during this time) and are now down to a “delivery only” that features as a part of essentials. “Bars” cannot deliver alcohol but have recently been made to pay the full increased excise license fee for the entire year. It is déjà vu with one change — a lot more people you know are testing positive, many more have lost their loved ones, and the infrastructure that is meant to curtail all this, is crumbling. Covid is all around us, and it is time for sheer survival and nothing else.

 

Prepped up this time?

For sure we were, while hoping that this preparedness never comes into effect. When I say ‘prepared’, it does not mean that we have a magic wand. We are just more cognizant of the fact that we will lose more business, more time will be taken, we will yet again need to invest both in product and in the sentiment. We were ready this time to accept things and be patient, we were ready to manage inventories well, keep our costs down, halt our expansion plans, renegotiate terms of trade, and more importantly, sit this one out. This time, we knew how the ball will roll.

Rahul Gomes Pereira, a celebrated Chef and a friend believes, “the F&B industry has taken to this wave much better than the first. The industry as a whole is going through almost a purge of sorts. Good food, great drinks won’t go out of style and that’s the only trend that’s going to survive. From the perspective of a chef, he feels that chefs should understand the importance of being involved with the business and understanding the numbers even more post this pandemic. It is important to be self-reliant and not at the mercy of investors or restaurant owners.”

 

How and why?

There is no point debating this further. Lives win hands down when it is Lives versus Livelihood. We will surely fight the livelihood battle once we win the first war. It’s time to be safe, keep your loved ones safe, keep your employees safe, customers safe, and take it one day at a time, one win at a time. If we somehow get over this wave, get over the gloom, the road to economic recovery in this sector should not be a cause for concern and we have seen this happening in the last eight odd months.

Srijan Vadhera, GM Hilton Hotels Bangalore, is as seasoned Hotelier. As he puts it: “Travel is an essential part of our everyday lives and travel makes the world a better place to live in. While there is a temporary pause, it’s inevitable that travel will resume sooner than later across the globe. With most governments across the world having started the vaccination drives and Indian government opening up the vaccination for citizens who are 18+ years old, I’m fairly optimistic that some amount of normalcy may return to our markets in Q3 or Q4 (FY22). Food & Beverage are going to be the drivers of recovery for most hospitality establishments once again in a few months.”

 

Staying afloat

Delivery has become a choice for some and a necessity for the others. For some, it means a business vertical extension and for others it means to be relevant in the consumer’s mind space. Irrespective of how and why, ever since the pandemic struck, the case for “dining-in” has become really strong, almost like a service game in tennis “Advantage Delivery”. Your favourite dishes that tantalised your taste buds and got you salivating were suddenly available only via delivery.

Chef Anuj Wadhawan feels that in order to survive or stay afloat, “every restaurant should have a permanent delivery module as well a proper business plan and not as a backup plan. The backup plan always takes the back-burner and this is what we saw last year — every restaurant came up with delivery but once things seemingly reverted to normal, it was just a backup plan. If this plan would have been executed last year in full force, then this year it must have showed some result.”

Saurabh Khanijo, CEO, Kylin Experience, started delivery under the brand “House of Kylin” and is of the opinion that the delivery business will grow four times from where it was pre-Covid and the route to success is to deliver restaurant level taste at delivery pricing.

 

The road to recovery

Once we address the elephant in the room, there will be multiple road maps for recovery and every restaurant establishment, hotel chain etc. will create its own unique path. Some will take more time than the others, some might change the offering, and some might change their location.

From a consumer perspective, safety assurance will be the focal point when making a dining out decision. The consumers will make informed choices basis what has been shared with them. Even more than the information, it will be the on-ground implementation of the laid-out hygiene and safety standards that will make or break any restaurant, bar, club or café.

I am an optimist and believe that the places that will survive the Covid onslaught will bounce back leaner and stronger. A new normal yet again awaits the industry and the country, and it would be exciting and extremely fruitful.

 

The One request

We need the government to acknowledge that the Food and Beverage industry that is roughly 3 percent of our GDP and possibly the single largest employer is in trouble. We need the governments, both State and Central, to act now and tell us that we will be taken care of. We have been waiting for over a year now. Liquidity is our biggest problem and a rebate or a waiver in statutory dues, compliances could be one of the things that governments can re-evaluate. Things like license fees, VAT, GST inputs, interest on tax, and electricity bills could all be looked at to improve liquidity. Lastly, once we survive the pandemic, we will need policy changes that are pro-business and pro-tourism. We hope our voice will be heard.

The writer is a celebrated chef, restaurateur, food and beverage entrepreneur

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