Quantitative study on post-epidemic travel shows Kerala cannot just depend on its medical advantage
Kerala Tourism, like any other tourism entity, stands still at the moment with lot of uncertainty ahead. Whether one is looking at it positively or negatively, the uncertainty remains etched in the minds of each investor and employee. No one really knows how long the current situation will prolong.
At the moment, India is being praised for the way this pandemic has been handled. Kerala is a state which is much talked about in this scenario and appreciated by everyone. This gives us an advantage of safety in the minds of travelers. How long will this hang in the minds of people? What type of customers really look for a place which arrested corona exceptionally? How can we make this work for our advantage?
This article looks through the current situation, the future and ways to get back the lost business.
Looking at the current situation, it can be seen that it’s a zero-sum game. Tourism isn’t functional and work from home is looked at as an option by various companies to gain revenue. One of our target segments include these people who currently work from home. Here we need to analyse the mindset of those who work in other sectors and how those sectors will gain momentum once the corona is arrested.
Let us consider information technology where most of the employees work from home now and they have more than sufficient work to do. Every employee who works from home is not even getting time to have food as the work load is huge. This thought raises a few questions:
*Why is the work load more during work from home, even at a time when the same employee saves 2 to 3 hours daily from their commute.
*Is that these companies are getting more projects or are they pushing employees to finish the accepted projects as early as possible to get payments.
*These questions open up another question – what if the projects are finished? Are the companies trying to finish the existing projects and planning to lay off people or planning to reduce salary once existing projects are completed? Both options will badly affect tourism.
Unless they get new projects no company will keep their employees on their pay rolls. Are we expecting a huge lay off or salary cut in near future then? Will these employees, who are our potential customers, look to travel once they understand that the future is uncertain. Few questions arise here:
*Travel helps to unwind and one gets to spend time with family. During work from home when everyone spends more than required time at home, they are at least seeing family throughout even though they are busy working. In this scenario, will they come out and spend money is the question we need to think about.
*Even if someone comes out, will they go out to nearby malls and nearest places or travel far? The mindsets will be different after spending time at home for more than 21 days, which is the required time to cultivate new habits. What if the new habit makes them sit idle than travel?
*How much time will someone require to get the confidence to go out after the pandemic?
Few scenarios which can happen are:
- Kerala controls the virus but it still exists in India
- India controls the virus but it still exists in other countries
- Few countries are able to control the virus and but it still exists in other countries
With the high efficiency we are seeing currently, Kerala is expected to control the virus first. But it will still exist in other parts of the country. So, people won’t be able to go out of those states and our state may not allow people from outside to travel to Kerala. This won’t help tourism.
India one of the countries showing high efficiency in handling the pandemic, so we can expect it to win over the virus in near future. But what if it exists in other countries? We may expect people to travel within their own countries which can help tourism. But the fear factor will still remain. We had experienced this when virus started spreading in other countries. Travel within India had reduced at that point. So even after recovery chances of people travelling may not be huge. People will have confidence to travel only if we do not allow international arrivals, as virus may exist in other parts of the world. Travel in full swing can happen only after the virus has been arrested completely or when a suitable vaccine has been manufactured.
All these thoughts have helped us to come up with a quantitative analysis to find the future trends and willingness of people to travel. Samples have been collected from domestic travelers outside Kerala, but within India. As the sample is from domestic population, the result sounds good only to domestic travelers and not inbound.
The analysis gives the following insights:
*We can expect people to travel within India than travel abroad – This is a good sign as far as Kerala tourism is concerned and with our marketing efforts, we would be able to bring those people to visit our state.
*We can expect a trend towards south India as well north India, and we need to tap them to travel to Kerala itself.
*Almost 40% of the people will plan for a trip only after the corona disappears from the world. They won’t prefer to travel even within India, if corona exists in other countries. Even if they travel, they may do so only 4 months after the world is corona-free. The other 60% will travel only 4 months after the country is free from the virus.
*Majority of the people will prefer to have short trip of 4 to 6 days only, and only few destinations will pick up during the initial days.
*The most important factor which need to be noted is, out of the survey conducted, even at a time when Kerala is doing an extra-ordinary job in controlling the virus, not even a single respondent mentioned that they wish to travel to Kerala as it is a safe destination. This brings us to the understanding that, even after this corona episode people may not select Kerala as the preferred destination, despite the medical expertise we have shown. I doubt we can capitalize on this for the domestic market.
The above results make us understand that it will take another 4 months for the market to pick up after the corona scare disappears. This puts all of us stakeholders in trouble and our sustainability will be at stake. Unless there is extra money flow from government it would be difficult for us to sustain in this field itself. Running a tour company or a hotel with low income for 7 to 8 months would be difficult for anyone.
We will need robust marketing strategies to bring people here. We can’t just hope to capitalise on the work done by our medical team. People will forget.
How we should survive till the market opens up
We require cash to keep the staff on the payrolls, despite the volatile conditions. If we get soft loans from government, it will be another burden for the investor to repay it even after one year. Imagine if the same situation continues for 3 more months. In that scenario, we will not be even sure how long it would take to revive the market.
From February onwards we have been seeing the dip and we have already paid two months’ salary (Feb and March). Providing two more months’ salary will put the employers in trouble. Many would be needing to pay their vendors too.
As far as airlines is concerned, tour operators would have deposited huge amounts and getting them back would be difficult. Government help is required here to get those amounts back.
One positive thing with the airlines not refunding amount to customers, is that the same customers will travel due to the pressure that the money will be lost if not utilized within stipulated time, even though this is not ethical.
Government is expected to come up with a stimulus package to keep things rolling. Only such help can get things back on track, which will enable us to increase our spending.
Many suggestions have been heard and something which struck my mind is providing the next three months’ salary through ESI or GST refund. At least for registered companies this could be done. This will give a clear indication for unorganized companies to make themselves organized.
How to manage cash flow
As always cash is king, but this time cash is more than that. We will need cash for everything but without any income. Even though moratorium has been announced, interest will still accumulate during this time and needs to be paid. It is not advisable to go for moratorium if the loan is new and or one has a high repayment period as the repayment period will extend. Even for other loans, go for moratorium only if there is serious cash shortage.
Hold all payments and try to get all receivables is what most people are saying. This also is a serious problem as all our creditors are from the same value chain and are people who need to be supported. In case of a tour operator, holding payment to a hotelier or a driver may not work as they have no other income to manage. If you are a hotelier, holding the advance received lands the tour operator in trouble. This strategy again will affect our cash flow, unless an external cash arrangement has been made. This can be through personal sources if it is within limits.
How should we manage our employees and vendors during this period of hardship
It is often said that the life of an entrepreneur is always uncertain. But in this case every entrepreneur knows and should accept that it will take at least 6 months for the market to be in a stable state. Till then he may be able to make his living, working with just a few of his most honest and outstanding employees.
But every employee whether it’s in tourism or in IT or in any field is currently having no idea about his future. He may be having a good amount of debt from banks which needs to be paid off and a family to look after, and he would not have any idea whether the company he works for will exist in future or even if it does whether they will require his services.
It is the responsibility of each boss or employer to make sure the morale of his employee is taken care of. They should not lose their self-confidence or become depressed about the environment. One has to make sure his family too is supported.
Be transparent: This is most important. Talk to the employees. They should understand where the company stands and what the future plans are. They should know about your plans to restore business. How many of them will be called back for work? Are you planning that in batches? What are you foreseeing etc. All these things need to be communicated to them. Please make sure the confidence of everyone is taken care of and that all of them are respected.
Salary: Depending on the financial health of the company, provide salary. Try to provide a minimum amount to sustain their living. Unless there is an external cash flow, paying full salary for the said period may not be possible. At any cost there should be some cash left once the market picks up for marketing and day to day activities.
Be a parent to them: Treat them like your own children, don’t be too bossy and be a parent or a close friend whom they can share anything and listen to all their apprehensions. Provide solutions and make sure you take care of their mental health more than anything.
Do talk to them at least every three days: Pick your phone and call each employee. Ask them to call their subordinates at least every three days.
Have video chat with entire staff at least once in a week: This is not a big thing now, thanks to applications like Zoom where you can continue with weekly meetings. Be the best listener you can be and keep their enthusiasm up.
Use WhatsApp group extensively and encourage them to do activities daily: Be active in your group, be the motivator, resolver and the most humorous person in the group. Do encourage each employee to speak up.
Encourage them to involve in activities: Try to give them daily activities to do, may not be related to the job but to make them active. Cooking, gardening etc.
Give them tasks and keep appreciating them: Google it, you get any number of daily tasks that can be given. Encourage and appreciate everyone to be part of this.
Don’t talk about your tensions to them: You are the leader, and your staff meeting is not the place to relieve your tensions. Find different sources like family, your own mentors, seniors in industry etc for that.
Give them confidence and send messages accordingly: A human being attains confidence over years but it is easy to lose it. Give enough priority to keep their confidence high.
Don’t circulate negative news through your group: Keep away from negative news in your WhatsApp group. As per doctors the number of patients has increased during lockdown, due to sleeplessness.
Treat everyone equally, even if it’s your least productive employee: This is not the time to gauge your employees. Treat even the lowest priority staff well. It’s your responsibility to keep their morale up. Remember you recruited them.
No one should feel that you are treating another employee better: No employee should feel so, if it happens it can lead to more instability. Try to announce all future plans, current situations when you are in the group meeting. Chances of miscommunication is more during this time.
Be the most positive person in the world, but convey the facts: This is where you stand apart, you not only need to convey the facts, you need to be positive and convey in a positive tone. Be a storyteller always.
Talk to all your drivers: If possible, do a personal call, else ask respective people in your organization to talk to drivers in a week. They are most affected than anyone.
Talk to your vendors: They are also in tension, be a supporter to them. Have a call with them and ask the concerned people to be in touch with them.
What should be done, once the market is open
Kerala tourism is one of the first states which promoted tourism successfully in the 1980s. Most of the other states followed the suit and they too did a great job promoting their states which gives us a tough competition. But at the moment everyone has reached a stand still. Some may try to push themselves for a first-mover advantage, once the corona crisis dies down. But this may have its own risk. Kerala Tourism should focus on having enough plans in hand even before the pandemic gets over. An aggressive marketing strategy with innovative methodologies can keep the product up.
*Kerala is known for its medical efficiency now. To keep the momentum up as well to acknowledge those who worked for this, Kerala Tourism should provide a complimentary family trip to those medical staff members. This can be a two-day trip with one-night stay where we need to coordinate with hotels and vehicles. This trip should be highlighted in entire media and should provide a hype in the market.
*Our marketing should be targeted to B2C segments, as the end customer should feel like traveling to Kerala. When we try to market in B2B market, those agents will get money whether they sell Kerala or any other state and they will push as per the customer’s requirement.
*We should focus on domestic tourists first. Then a few of the international markets where people are ready to travel. This should be decided only after doing a market research through surveys.
*We need to segment the market and target accordingly. Folk dances or village experiences may be accepted by an international guest but not a north Indian domestic guest. Our advertisements should be for a particular target group.
*We may provide training to tour operators, drivers and hoteliers on how to treat a guest with better professionalism, during the time when the market is yet to pick up.
*SOPs can be made now and would be easy to start as we are starting from zero.
(Column by Ratheesh R Nath, Managing Director, Paradise Holidays)