In conversation wih Kuntal Rai Bhatnagar, Practice Head, Grassik Consultants, People Matters explores the challenges that Indian hospitality industry will face in the coming years and how to overcome them.

How do you perceive the evolution of Indian hospitality industry in another five years time in terms of growing foreign tourist footfalls?

The growth tempo of the travel and tourism industry in India is fragile at this point in time. Although the numbers have been moving north this year, the delicate socio-economic climate in the country makes this growth trajectory vulnerable. The primary objective here is not to rely on a marginal growth, but to aim at opening the floodgates on international arrivals into the country. Compared to other Asian tourism hotspots such as China and Thailand, our numbers have a long way to go. I would view this as a brilliant opportunity, rather than a weakness. For us, the single largest focus needs to be on infrastructure development.

Hospitality space is in fact one of the critical pieces in this puzzle. The largest opportunity lies below the tip of the pyramid. The 5 star hotel market in our country is shaped well and at par with international standards. The growth focus needs to be on budget and mid-scale segments. This is where the real volume is. We need to focus on providing an end-to-end ‘experience India’ option across price points.

So far our numbers are limited because of a lopsided focus on only the premium segment. Therefore, it is not so much about creating demand anymore. The main challenge is to facilitate convenient and comfortable access into our country because India has and always will continue to intrigue people.

What are the challenges for large chains in homogenizing customer experience across hotels?

Increasing pay scales and talent retention will be the top challenges in the Industry for the year 2010. Prominent international and domestic players have taken detailing to a whole new level. Although these brands have got it right in terms of standards, the challenge lies in being able to execute and replicate these standards worldwide. Factors such as education, ethnicity, training resources, quality manpower are some of the prominent hurdles. Employee engagement becomes crucial to overcome all of the above as it is vital to have them believe in these standards before they can be expected to execute these with utmost efficiency.

There is increasing focus on the perceived shortage of skilled manpower in the hospitality industry. What are the causes of this talent crunch and how to overcome them?

In my years of Executive search, I have seen a visible shift in not only the quantity of available and qualified manpower, but also the quality. The numbers have dwindled owing to the demand of hospitality professionals in other service industries, such as entertainment, real estate and retail.

A critical solution is emphasis on retention. Hotels must provide a fully maximized career, rather than just another job.

What are the key challenges in terms of people management in the hospitality sector for the year 2010?

With the recovery mood fast setting in, employee expectations are in proportion as well. As we have been reading in the papers, India is looking to lead the highest pay scale incremental index across Asia. Although this is good news, what needs to be factored-in is the fact that the Indian hotel industry shall not churn out abnormal profits driven by average room rates that governed the year 2007 – 2008.

Second is talent retention. With newer brands coming into the country, the talent pool shall be further under duress.

The hospitality industry has a variety of strategies with respect to outsourcing of activities. Can you please elaborate on this?

In hotels, like any other business, it is all about ROI – Return on Investment. Where outsourcing is concerned, the objective is to ensure quality and consistency through a sound business model. For instance, laundry services provided by a hotel can be in-house or out-sourced. There is no right or wrong – as long as the desired value is delivered to the guest.

However, the larger international hotel brands would continue to retain all essential services in-house that directly contribute to guest experience.

What is the typical career progression that hospitality offers to employees and how does this link to succession planning?

The average employment in a senior hotel management position is shorter than other industries for reasons such as wider exposure/ acceptability ratio in comparison to other industries. About a decade ago, succession planning was more a default function. However, in the last 5 years, new age companies are waking up to the importance of succession planning and have incorporated innovative ways to ensure the same. These include prospects such as 360 degree appraisals, train-the-trainer formats among others.

At every level of the hierarchy, the next step should be visible so that both the employers as well as the employee are aware of what needs to be worked towards.