Hospitality Paradigm

The other day in our town hall meeting our VP-Sales announced that henceforth all sales folks are to work from home. I have been in the sales profession for the last fifteen years, and with this company for the last five. I could see most of my colleagues clapping with their emojis during the zoom meeting. And the thought process started working… Why did I join Sales as a profession in the first place?

Being a B.Sc 2nd class graduate from a mofussil town in North Karnataka, I had no option of pursuing further studies due to my precarious financial position and my mediocre academic background.

My first job was as a sales executive in a weighing scale company in Bangalore. The pressure on numbers was part and parcel of my sales job. Incidentally, a few of my colleagues left the sales profession within a year. Those with a better academic record decided to opt for a full-time MBA while others opted for a factory job. I still remember one of them, Ganesh, who told me on his last day, “Ravi, I have decided never to get into the sales profession again in my life. Travelling daily on a bike on traffic-congested roads, customers reluctant to meet you, and if this is not enough, my manager screaming down through my throat asking for the numbers is more than I can bear.”

Somehow or the other, I had started enjoying the profession very much. Within the first month, I was able to close a major order and there was no looking back, thereafter. All these years I have been reaching or surpassing the targets. Even in my company, only I would turn up to the office on Saturdays, and my colleagues from production, design, and QC were envious of me. Their tone would express their envy that salespeople have all the freedom in life, they come and leave the office whenever they want, etc. Bhaskar from the accounts department, while clearing my conveyance and outstation claims, once commented, “you lucky guys, you travel by taxi, live in five-star hotels, dine in the best of the restaurants; and all this at company expense.”

I could not explain to my colleagues doing their desk jobs in an air-conditioned and predictable environment that I was in the field most of the time, working in ‘unpredictable enemy territory,’ where even getting a glass of water, leave aside a cup of tea, was a luxury.

But then, how did I survive and grow in this sales profession? Was it the salary and incentives? It was much more than that. As a salesman, I was not perturbed with rejections. Even though seven out of ten prospects did not show interest in my products, it was the sheer thrill of meeting new people every day. Was meeting these prospects easy in the first place? A friendly conversation with a security guard or complimenting the receptionist to get the decision maker’s name was more of a fun game than a chore.

Quite often a client would be reluctant to share competition details. Going out of factory premises for a cup of coffee or a cigarette, discussing office politics, and sympathising with him on his personal challenges would help break and melt the ice.

Talking with security guards with key phrases in their mother tongue also revealed crucial information about competition activities, which was not only fun but also adrenaline-boosting. However one needs to have a considerate manager to encourage you. My first manager, Mr. Inamdar recognised my passion for sales and the results I was generating. He once said, “Ravi, I do not care what time you come to the office, or how many calls you make. You have been given targets in terms of the number of units, value, and profitability. You know the company guidelines and policies. Within that framework, please get the results. If you need any help, please let me know. However, keep me updated on important developments.” He turned a Nelson’s eye if I crossed company limits on my daily expenses. Once in a while, he would say “I trust that you have spent money from your pocket during this outstation call. The company rules do not allow me to pass your travel expenses, and I have to follow company rules. You may cover this amount in your local travel.”

Mark Twain once said, “I did not prevent my school from getting me educated.” On similar lines, my manager, Inamdar was never an obstacle between me and my targets. He was an exception. Most of my subsequent managers were sadly, otherwise.

Pradip, one such manager used to always hanker about reports. I once told him, “I have surpassed my targets, why then do you insist on daily activity reports?” He said, “In our company, we get orders even otherwise. What I need are reports.”

The town hall meeting on Zoom was in progress. I was drawn out of my reverie. The people who were clapping for WFH sales, did they ever have a passion for sales, I wondered? Both the stakeholders, the management as well as the salespeople were gung-ho about WFH selling, but what might be the real issue?

Harsh Goenka-led RPG enterprises have announced that the sales force henceforth shall work from home. The group has companies like CEAT Tyres, Zensar Technologies with a Global employee strength of 30,000. The office-bound staff is to work 50% from the office. ( WFH: Home will Always be an office for RPG Staff ) . WFH has the following advantages for management:

• Lower office procurement costs in terms of rentals or purchase
• Lower operating overheads in terms of electricity, house-keeping, tea/coffee, cafeteria, etc.
• Lower sales expenses in terms of local and outstation travel, lodging, and boarding expenses. The company also claims that for the salespeople it also amounts to the following: Lesser fatigue, lesser travel & quicker TAT (turnaround time)

In the above article, it was claimed that this would lead to higher employee efficacy and business output with an improved work-life balance.

WFH may be the need of the day. But will the management ever realize that there is another side to the story? For a few star performers, Selling is more of fun, passion, and a personal adventure on a daily basis, which distinguishes them from the crowd. Will WFH and its related efficacy claim, ever address this passion?

And, how will star sales performers differentiate from the crowd?

For details: Contextual Selling – A New Sales Paradigm for the 21st Century

“The tragedy of our age is salary”… writes Sunday Adelaja in ‘No one is better than you.’

My fellow working hoteliers are mostly receiving their salaries in part and the extremely fortunate few, in full by now. One’s reaction to a truncated salary receipt, while not initially positive, must compel ourselves to look at our half-filled glass and consider that ‘I have a salary,’ if even in part; for there are many who have not been fortunate to have retained their employment in these trying times. Thus the need to look at Salary from a philosophical & aphoristic perspective.

Those of us who have a passion for hospitality have chosen our own area of calling and purpose and we are working and converting our life into that area of calling. If you are such a passionate employee, you will realize that if you genuinely believe you are not being compensated with salary, it is then that you become the boss over your own life, for you have not allowed money to rule your life.

Mokhonoana in his aphoristic style writes “The reason that man is seldom satisfied with his salary is that when it increases, he increases his expenses.” For those who have received a 50% deduction, a positive way of approaching the current salary crisis is to remember how one lived when one’s salary was half what it is now. The answer perhaps may startle us – we were equally happy and experienced the same level of wants, needs, and satiation at that time. It is only then, that we began to view our Salary from a philosophical & aphoristic perspective!

This tells us that money is a means to an end and not an end to a means.

There’s no money in poetry, but then there’s no poetry in money, either,” said Robert Graves, the Poet; while Voltaire, the writer said, “Don’t think money does everything or you are going to end up doing everything for money.” Profound statements, both eviscerating the ideal stance in the prevailing scenario.

At the pandemic’s outset many months ago, most international & domestic hotel chains in India took policy decisions to cut salaries as per grades and retrench employees in order to stay afloat. These chains are mostly managed or franchised where individual owners come into play. Those employees who were, and still are blessed to receive any salary, need to maintain an aphoristic perspective, to retain their philosophical sanity. On the other hand, some of the larger Indian chains with self-owned properties did not withhold salaries (barring performance bonus), making their employees amongst the fortunate few in the industry – these few and rare instances display the company’s courage to pay complete salaries during these stressful times and it clearly reflects the importance they give to their human capital.

On the other end of the spectrum, there are some hotels which have retrenched and cut salaries quite ruthlessly. A luxury chain has rationalized all salaries above Rs. 50000 p.m. to the base amount (a Manager earning 60k p.m. will get 50k, and a GM earning 500k p.m. will also earn 50k) while several luxury chains have asked its people either to leave or to sit out until further notice. Dickson G. Watts, Author states “Not to have the courage to accept a loss, is fatal. It is the ruin of many.”

Such are the vagaries of business that in order to survive, a business has to reengineer expenses in tune with market trends. Frederic Bastiat, a French economist of the 19th century once famously said “Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.”

Airbnb Chairman, Brian Chesky released a note a few months ago, announcing layoffs and the surmise behind it. In the note to his employees, he writes:

“We don’t know exactly when travel will return. When travel does return, it will look different. While we know Airbnb’s business will fully recover, the changes it will undergo are not temporary or short-lived. Because of this, we need to make more fundamental changes to Airbnb by reducing the size of our workforce. It was important that we had a clear set of principles, guided by our core values, for how we would approach reductions in our workforce. These were our guiding principles:

• Map all reductions to our future business strategy and the capabilities we will need.
• Do as much as we can for those who are impacted. 
• Be unwavering in our commitment to diversity. 
• Optimize for 1:1 communication for those impacted. 
• Wait to communicate any decisions until all details are landed — transparency of only partial information can make matters worse. 

The result is that we will have to part with teammates that we love and value. We have great people leaving Airbnb, and other companies will be lucky to have them. To take care of those that are leaving, we have looked across severance, equity, healthcare, and job support and done our best to treat everyone in a compassionate and thoughtful way.”

This seems to be an empathetic manner of approaching severance and salary cuts.

In the book To Kill a Mocking Bird, by Harper Lee, Atticus Finch tells her daughter: “You never really understand a person until you consider things from his point of view – until you climb into his skin and walk around in it.”

I sincerely commiserate with all my industry colleagues going through this current crisis and do pray that we all live through this period with grace, equanimity, and a strong belief in the Almighty and faith in recovery to better times ahead. It is not easy to have to receive wages less than what has been contracted for and I trust owners will empathize with their employees’ pain whilst implementing such measures.

At the end of it all, we must remember that there is that which is in one’s hands and then, that which is not… As an employee, the quantum of salary pay-out may not be in your hands. However, accepting the inevitable that salary is transient, would be a philosophical way of looking at this aphorism.

In the meantime, it is highly recommended that we invest this time in upgrading ourselves in various areas. You are the best judge for what you need to upskill on, professionally or otherwise. “Better capital in a man’s head than capital in a bank.” – Dickson G. Watts

So keep your thoughts positive. To quote John Assaraf, “Keep your chin up. No one expected you to save the world, otherwise, you would have been born wearing a cape and tights. Just do the best you can.”

Circa 1988, I was chosen for the Management Trainee Program of the fabled Oberoi Centre for Learning & Development aka OCLD, then known as Oberoi School of Hotel Management (OSHM).

Interestingly, the path to this successful selection involved a lot of drive, humility, diligence, and industriousness.

I had always aspired to join the hotel industry. In the 1980s, there were very few people who wished to truck with this industry, unlike now. I learned of the OSHM during this time and read whatever magazines I could on the industry and Oberoi Hotels.

Gen Z (students and new industry workers) may have heard of such ‘prehistoric times – the non-internet age’ from their parents but may find it difficult to comprehend; nowadays any thirst for knowledge is easily quenched online.

A distant relative worked at Oberoi Hotels, Bombay and I requested to be connected with him. I met him for the first time and went to his home to try and understand something about an industry I knew practically nothing about. He was most helpful and supplied me with magazines, newsletters, and brochures, etc., apart from tutelage on the Oberoi way.

IHM Bombay had a professor who was a family friend and I connected with her, to understand what the hotel industry was about. She was very kind to allow me to use the institution’s library to study books on the industry. Lillicrap’s Food & Beverage Service – a reference used even today, was one such book. I poured over all this reading with keen interest, making notes along the way.

All this preparation began a year earlier while in my second year of graduation, and I used this time to also prepare for GMAT and GRE as I was told this would be useful in the OSHM selection process. I simultaneously worked hard to develop my General Knowledge using library time effectively.

Come D-Day, I was all fired up and floated through my college selection (I was the only one selected from at least 100 students). The next stage was at The Hotel Oberoi Towers where I got through the Group Discussion, the written test, and the pre-final interview.

Having got through four stages, 3 months later I was called for my final interview with PRS (Biki) Oberoi and the board of directors at The Oberoi New Delhi. Of all the hundred-odd selectees called in for the final interview, I found myself in the final 18.

Imagine my dismay, when this final 18 were assembled at the end of the interview selection process and told that 15 of them had made the grade. I was among the rejected 3 candidates, who after seemingly getting through the 5th and final stage of selection, had to now fly back home downcast and woebegone and take fresh stock of my life.

I analysed the reason for my rejection and figured that the uncertainty amongst the interview panel, of my passion and sincerity for the hotel industry, probably weighed heavily against me. Being an Economics graduate, my seriousness for this service industry was probably in question. I realised that to show my seriousness for the OSHM, I would have to prove my passion for this industry, the next time I came up before the Oberoi Panel.

I joined a two-year course in Hotel Administration and Food Technology at Sophia Polytechnic, Bombay. During this time did my industrial training at Oberoi Towers, Nariman Point, and then at Sea Rock Bandra.

A year later, when the OSHM selection began, I requested my graduation college to allow me to attend the 1st stage of selection. The rest is history. I sailed through all five stages successfully. In Delhi, at the final interview, I was quite startled when Biki Oberoi told me I had put on some weight since my previous attempt a year ago!

And, that is how I joined the OSHM batch of 1988-90.

Well, the learnings I would encourage here are:

Failures happen… They must encourage and exhort you to do better. Look at ways to convert failures into success. Many of us may achieve success without going through the failure stage and this is dangerous as it does not prepare us for the real world. Popular belief says that ‘failure is bad.’ You need to redefine this for your situation.

Analyse failure. Do not simply disregard it, as it could happen again in a different form unless you are able to fathom the reason for it.

Hard work, hard work, hard work. There is no better formula for success.

Focus on what you want to achieve. Keep your focus constant. Do not say ‘I will try this and if it works – well and good, else I will do something else.’

Without passion for what you want to achieve, you are like an empty vessel. Aspire for something by design and not by default.

For Gen Z who has passed out this year from their catering schools, it is indeed a trying time. Many of you are waiting for the appointment letters you were promised during hotel selections done pre Covid-19, and many are still sitting out waiting for employment.

This is not your personal failure… it is the environment that has played a trick on you. Instead of rueing your luck, look at how you could use this time to upskill yourself or possibly join an organisation as a trainee instead of an employee – for the experience.

Create your future instead of waiting for the future to create you.

Covid-19 has busted hotel pricing myths even as we are in the worst performing year for hotels in a century. This pandemic is nothing like 9-11 or the 2008 global financial crisis – Nor even India’s demonetization or GST implementation!

As a result, corporate travel, leisure (inbound, outbound, domestic), heritage, adventure, MICE, religious, spiritual events are all smitten. Also, the same holds for upcoming high-value niche tourism products. Culinary, Wellness, Sea & River Cruises, Glamping, Rafting, Sports, Wildlife, Agritourism, and many more are all affected.

The harsh reality of Covid-19 has busted a few hotel pricing myths:

1. “Our brand image will take a beating if we offer lower rates.”

   We (the industry) are now on a survival mode. Your guest will not necessarily perceive lower rates to equate with a lower quality. Consequently, market perception during such extreme times will not necessarily define rates. Aspiring travellers are looking for a deal right now and hence being cautious with their money. This is even more relevant for independent and boutique hotels that have spent millions building a brand and a following. Therefore, give guests a chance to experience your product for the first time or as returning guests. Besides, their money will help your cash flow. That is how global recovery starts… one room at a time!

2. “Sub-optimal rates will adversely affect the quality of our guests.”

   Millions have lost their jobs in 2020, thanks to the pandemic. Since mid-March, the impact on organised and unorganised tourism has been severe. The result is a very high unemployment rate in the industry. These are numbers not seen since the Great Depression (1929-33). There is a very good chance the same people who paid a high rate at your hotel pre-pandemic are now under or unemployed. So, are the same people now undesirable because they are financially stressed and clawing their way back up? Why would you not want to get them back at a lower rate for now? After all, they are the same demographic, but with a reduced propensity to spend.

3. “Lower rates will lead to a decline in product quality.”

   In today’s times, this is a misnomer. Without yielding on quality, hotels are now learning to trim costs more effectively. Hence, there is no need to sacrifice quality to match the drop in ARR.

4. “If we lower rates now, it will take years to rebuild our ARR.” 

   In light of the current life-changing pandemic, this does not apply. The world economy has come apart this year. Also, people are still severely travel-restricted. As hoteliers, we must reflect this in our dynamic pricing. Concentrate on occupancy over ARR from the RevPAR perspective for the nonce and therein fill your rooms. You may subsequently pull up your rates when the pent-up demand returns. The same applies to RFP rates – hence a proactive approach to negotiated rates during tough times is the need of the hour.

Based on market conditions, airlines have always relied on massively varying rates. So why shouldn’t hotels do it too?

This article has appeared in TravelDailyMedia.com September 2020

“Charles, you care for nothing but shooting dogs and rats; you will be a disgrace to not only yourself but to your family too.” This was a father’s prophecy about his son. The father wanted his son to be a doctor like him. Charles entered Edinburgh University for medicine at his father’s behest, found it unattractive, later joined Cambridge, and earned an undistinguished bachelor’s degree in theology. He had no firm idea what to do. Charles was an aimless youth at 22. He wanted to do something different. He loved flora and fauna but did not know whether that love could be transformed into a livelihood.

Captain Fitzroy on his ship HMS Beagle was looking out for a naturalist. Charles asked for his father’s permission. His father refused but with a caveat, “If you can find any man of common sense who advises you to go on the discovery, I shall give my consent.” Neither the father, nor the captain were ready to grant permission to Charles.

When Charles approached Captain Fitzroy, the physiognomist in Captain Fitzroy said, “I doubt anyone having a nose like yours can possess sufficient energy and determination for the long voyage.”

His uncle drove thirty miles to convince Charles’ father to grant him permission to undertake the assignment on HMS Beagle as a naturalist.

The Beagle Voyage which included the circumnavigation of globe would be the making of the 22 year-old Darwin. Five years of physical hardship of mental rigour imprisoned within the ship’s walls, offset by the wide-open opportunities in the Brazilian jungles and the Andes Mountains, were to Darwin an eye opener in finding his muse. It took him 22 years to publish his theory of Evolution by Natural Selection in The Origin of Species.

1. The conventional way of selecting a profession for self or for others is primarily decided by the demand for that profession, coupled with tangibles like salary and perks. No wonder Medicine, Engineering and MBAs among others make the cut.
2. A niche-driven approach on the other hand is decided more by finding gaps in the market and differentiating oneself from the crowd to address that gap (as discovered by Charles Darwin). Niche is defined as a comfortable or suitable position in life or employment. Alternatively, it also means a shallow recess especially in a wall to display something of value – a statue or other ornament. (please refer the image)

Is it necessary to be a school or college topper or those in the top percentile rankings to find one’s niche? Quite often the converse is true as ‘brilliant’ students have the best choices in selecting the conventional options in career and institution.

What can happen when one selects a career in a conventional way but is at the bottom of a pyramid in a specific career stream? Getting a job may look easy but one may be competing with a very large number of aspirants. For example: Rakesh had scored 100/100 in Sanskrit in SSLC. Having felt he had a flair for Sanskrit he decided to pursue his college education in that direction. He completed his BA in Sanskrit from Ruia College in Mumbai.

At this juncture he had two choices in further studies – to continue his studies in Sanskrit or look out for a qualification which is marketable in the job market. He decided to pursue a MBA in Finance instead. After spending around Rs. 8 lakhs in fees itself what can be the likely scenario when he passes out two years later?

For a person who wishes to do a M. Tech in Structural Engineering, a minimum qualification of B.E Civil is necessary. Likewise for a M.S. in surgery, a basic qualification of MBBS is mandatory. So, when a person pursues a MBA in Finance with Sanskrit as graduation the basic competency level expected of the student is that of Class 12^th, as a MBA is agnostic to one’s field of graduation.

Conventional wisdom says that one has a wide range of job opportunities after doing a MBA. The opportunities are large but so is the competition. Annually about 360,000 students graduate from 4000 B-Schools of which 61% are unemployable due to skill gaps and low work experience.

Keeping those depressing numbers aside, can Rakesh compete with students from Premier Institutes or those with Engineering and Commerce backgrounds? It is not impossible, but it is a Herculean task.

What would happen if he were to pursue Sanskrit for his PG? In the absence of clear data let us assume that the number of students opting for Sanskrit may be 1% of MBA students that is around 3600. For Rakesh it would have been much easier to be in the 95^th percentile after his MA and in the 99^th percentile with a Ph.D. A lot of research happens in Sanskrit in US and German universities. By differentiating himself and finding a niche, Rakesh could have had a sense of purpose too.

From a financial perspective too, the cost of pursuing a MA in Sanskrit would have been at less than 10% the cost of a MBA. In case of a Ph.D. he could have explored UGC fellowships or opportunities in US or German universities where considerable research in Sanskrit is possible.

An example of a niche-based career is below: My friend Christopher Jayakaran passed PUC, third class in 1962. With hardly any worthwhile career options, his father’s friend suggested him to take up a course in Geology. He completed his M.Sc in Geology at Presidency College in Madras by topping in the University. He worked for an NGO called ‘Action for Food Production’ for 7 years and for more than 25 years in different countries in Africa which include Uganda, Kenya, Tanzania, Sierra Leone etc. He is an eminent Hydrogeologist and a Paleontologist. His Tamil book In Search of Ancestors which is on evolution of man based on fossil evidence has run into six editions.

Why are people in general wary of pursuing niche fields?

1. Obsession for Security: Education is normally pursued in order to get a job. The market demand is thought of. In the post-covid world there is no security either in a job or in one’s qualifications per se.
2. Managerial Aspirations: Indians in general prefer to have a managerial title early in their career sacrificing expertise in a specific domain.

How to find your niche?

Around 30 years back I came across an excellent concept in finding ones niche, based on cybernetic principles which was on identifying one’s core competency and focusing on a specific niche where the strength can be leveraged to maximum extent.

Werner Brandes was a German MBA Graduate who was working in a consulting firm but did not have career growth in spite of working hard in that organization for more than 10 years. He was unable to get good offers elsewhere. He was a mediocre student throughout his academic life and passed out from a tier-3 B-school.

The conventional wisdom of competing with others was not giving any results (like the example of Rakesh discussed above). His work profile was mapped for 15 different competencies. Werner was below average in all save one, which was on Industry Setup in rural areas. When Werner was pointed out that this was his niche. He asked, “How can I get a job with such a small niche?” He was advised to start his own consulting in this field and as he was in the top 5% of this ultra-specialized area of business consulting, slowly he was perceived as an expert in this field. Business started growing. Being a sunrise sector wherever the data was not available, his customers helped him in providing the necessary details.

Fascinated by this counterintuitive concept, I launched a program called Strategy for Quantum Growth. After 4-5 programs I had to withdraw as most of the participants did not want a long-term strategy but a new job which paid them 3-5K more.

One crucial difference between the conventional and the niche-based strategy is the type of growth. In case of the former it is logarithmic growth – where it is easier to get a good well-paying job immediately after graduation but after a few years the growth may taper off. In case of niche areas there is a considerable struggle initially but after a few years when the market perceives you as specialist, the growth becomes truly phenomenal. You are considered as a pioneer and get a first-mover advantage.

Christopher, Werner Brandes or Charles Darwin were not brilliant in their school days in the conventional sense but were able to find their niche. Have you found yours?

Two roads diverged in a wood and I… I took the road less travelled. – Robert Frost.

Rajan Parulekar – Director, Hospitality Paradigm

There are a few guidelines for both the hotel industry and tourists to pivot towards, that would make tourism more resilient as well as climate friendlier. Encouraging destinations that are closer to the traveler, making stays longer and keeping profits local, are some ways to move away from the focus on volume and energy-intense products:

• Increase the length of stay or the length of days in packages sold.
• Focus on closer markets, long-haul travelers are the ones contributing to vast emissions of greenhouse gases.
• Rethink the food that you serve, organic and regional can benefit farmers nearby.
• Move towards a high-value model, where individuals spend more.
• Think about what you buy: a lot of the profit is made by foreign-owned, global platforms such as AirBnB and booking.com.
• Rethink carbon-intense travel, for example cruise holidays.

Buyers will need to address a few issues specifically related to Covid-19 in negotiations this year, including:

• Cleanliness standards. All buyers should confirm cleanliness standards as part of the negotiation process. The enforcement of social distancing and cleanliness standards in guest rooms, meeting rooms and other common areas is paramount, and measures will need to be addressed in contracting.
• Amenities. The need and availability of hotel amenities will be different. For example, what will free breakfast entail? Will “grab and go” replace the buffet? It may not make sense to negotiate in breakfast or even the shuttle service if buyers are not confident that the appropriate social distances measures are in place or if travelers will not be comfortable using the services.
• Room availability and upgrades. The fact that many hotels will be operating at lower inventory levels, with many operating at 50 percent capacity, make room type negotiations more challenging for some buyers. The likelihood of securing room types beyond standard will decrease, and it will be incumbent on buyers to sharpen their pencils in to obtain upgrades for their travelers.
• Cancellation policies. While hotels currently are offering flexibility with bookings to spur demand, they might adjust their cancellation policies down the road, given the planning and costs hotels need to apply to spacing out incoming and outgoing guests and having guests placed in every other room and other measures to manage guest flow. With inventory constraints and social distancing measures, cancelations will be more costly for hotels and they will likely need to apply more stringent penalties which could result in increased costs for buyers in the form of fees. Cancellations and penalties are a negotiable item in the RFP process, and buyers should be prepared to address them.