Uphill Battle
Patu Keswani, the Chairman of Lemon Tree Hotels, recently decided not to take salary for three months. Other senior members of Keswani’s A-team (such as vice presidents and managers) also took pay cuts of between 50 per cent and 65 per cent. When Business Today spoke to Keswani, his rationale was an eye opener. Just about 15 per cent staff in his hotel chain accounts for half the wage bill. “The key decision at the moment for managements is to take pay cuts instead of firing employees, and look for ways to cut fixed costs. Hotel chains can bring down their wage bill by 30-40 per cent without touching 85 per cent of the staff,” he says.
In the large universe of the travel and tourism sector, Lemon Tree is among the bigger names that have been affected by the coronavirus pandemic. As per industry body FAITH (Federation of Associations in Indian Tourism & Hospitality), the travel and tourism sector is staring at losses of nearly ₹5 lakh crore, apart from five crore lay-offs, as a result of coronavirus, though these projections keep changing as the situation evolves.
Most large players are devising strategies – almost on a daily basis – to tide over the crisis. However, the way the crisis is unfolding is so unpredictable that even the best strategies can fail. According to the promoter of a leading hotel chain, it’s estimated that nearly 20 per cent travel and
