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Vol. XXX No. 13, November 1-15, 2020

How the hospitality industry is coping with Covid

by Our Special Correspondent

The third article in a series exploring the pandemic’s effect on Chennai’s industries, this piece takes a look at how the city’s restaurants have been braving the crisis.

According to industry estimates, Chennai and its suburbs are reported to have around 8,000 eateries of varying sizes. With a curb on social gatherings, the pandemic has hit the city’s restaurant industry quite hard, causing a significant number of hotels to shut down permanently. Dine-in services capped at 50 percent occupancy were allowed to resume in the month of June, but the number of customers choosing to eat out are understandably nowhere near pre-COVID levels. Even though food delivery services have fared better – a Zomato report published in August estimates that food delivery orders across the country has reached around 80 per cent of its pre-pandemic business – restaurants are reportedly earning less than half of what they used to before the crisis.

Kiran Rao, a restaurateur who manages premium eateries such as Wild Garden Cafe (Amethyst) and Chamiers recalls the panic that followed the initial lockdown announcement in March. “It was a nightmare. We had to give away all the perishables – food, fruits, vegetables. We were also concerned about the staff. We instructed them to stay put and assured them that their salaries would continue to be paid.” Many hotels had to make arrangements to ensure that the spaces were secure and well-maintained even when not in use. Kiran reached out to staff who lived close by. They visited the spaces when they could. They aired the place out and cooked their meals on premises, too. “Cooks became gardeners,” said Kiran. “It was crisis management across the board – everyone pitched in.”

Restaurants are finding it hard to manage financials as well. While revenues have reduced, operational expenditure and other costs such as repayments on bank loans, commercial rent and staff salaries remain due. In fact, it was reported that the Tamil Nadu Hotel Association applied to the government for rent relief in March. Despite a reported manpower shortage – a significant percentage of employees at specialty cuisine restaurants are not locals – many hotels have had to either lay off their staff or reduce their salaries.

With customer surveys suggesting that most plan to order in rather than dine out in the near future, food delivery services such as Swiggy and Zomato have been an alternative source of income for hotels. They provided an easy platform to immediately digitize ordering and outsource delivery, even in legacy restaurants. In fact, quite a few hotels in the city registered themselves on food delivery platforms during the lockdown. Restaurants and food delivery services are also working closely with each other to help customers feel safe and secure while ordering online. They provide transparency into the safety measures taken by the hotel and the delivery professional as well. However, some point out that the margins retained by the restaurants are much lower, since the model involves a commission pay out to the delivery platform.

In a bid to recover dine-in customers, restaurants are taking multiple measures to reassure patrons of their safety. Most hotels ensure that their properties are sanitized regularly, while the staff wear masks and wash their hands on a regular basis. Air conditioners are left switched off in accordance with mandated guidelines and customers are seated as per social distancing norms. Restaurants are turning to technology to minimise human contact, as well – from touch-free transactions to robot servers, they have brought new ideas to the table to secure the safety of customers and staff alike.

Menus have also undergone innovation, of course. The number of items on offer has been optimized, with hotels making dishes that comprise ingredients that are easily available and are easy to store, too. Evergreen items like the biriyani are finding a place in hotels that didn’t offer them earlier – people are turning to favourites and comfort food in these troubling times. There’s also been a rise in home entrepreneurs in response. Many are offering customers home-cooked meals, desserts, breads or condiments such as pickles or podis to great response. Hotels, of course, have followed suit with their own strategy – some have begun to offer customers the option of buying ready-to-cook versions of their signature dishes as well as condiments like sauces or gunpowder.

As the city’s restaurants work up an appetite for growth, they’re doing their best to adapt to the new normal. That the sector will recover is in no doubt – after all, a good meal will always be in demand. What remains to be seen is how long it will take to get there.

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