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Worsening shortages, high prices restrain US manufacturing activity

WASHINGTON: US manufacturing activity slowed in October, with all industries reporting record-long lead times for raw materials, indicating that stretched supply chains continued to constrain economic activity early in the fourth quarter.

The Institute for Supply Management (ISM) survey on Monday also hinted at some moderation in demand amid surging prices, with a measure of new orders dropping to a 16-month low. Still, demand remains strong as retail inventories continue to be depressed, which should keep manufacturing humming.

According to the ISM, “companies and suppliers continue to deal with an unprecedented number of hurdles to meet increasing demand.” The government reported last week that the economy grew at its slowest pace in more than a year in the third quarter because of widespread shortages tied to the COVID-19 pandemic.

“Stress in U.S. supply chains isn’t abating, lending downside risk to our forecast for GDP growth in the near term and a clear upside risk to the forecast for inflation,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.

The ISM’s index of national factory activity slipped to a reading of 60.8 last month from 61.1 in September. A reading above 50 indicates expansion in manufacturing, which accounts for 12% of the U.S. economy. Economists polled by Reuters had forecast the index would fall to 60.5.

The ISM reported 26 commodities were in short supply in October, some for as long as 13 straight months. That compared to 24 in September.

The economy is struggling with shortages across industries as global supply chains remain clogged. Supply constraints were worsened by a wave of coronavirus infections driven by the Delta variant over the summer, especially in Southeast Asia. Congestion at ports in China and the United States was also causing delays in getting materials to factories and retailers.

The motor vehicle industry has been the hardest hit amid a global semiconductor shortage. Transportation equipment manufacturers in the ISM survey said they had perted chips “to our higher-margin vehicles and stopped or limited the lower-margin vehicle production schedules.”

Other industries are also hurting. Manufacturers of computer and electronic products reported “extreme delays” and that “getting anything from China is near impossible.” Food manufacturers said “rolling blackouts in China starting to hurt shipments even more.” Makers of electrical equipment, appliances and components said though demand remained strong, production continued “to be held back by supply chain issues.”

The ISM survey’s measure of supplier deliveries increased to a reading of 75.6 last month from 73.4 in September. A reading above 50% indicates slower deliveries. Economists and businesses expect supply chains could remain tight through 2022.

Longer waits for materials meant high inflation at the factory gate persisted. The survey’s measure of prices paid by manufacturers accelerated to 85.7 from a reading of 81.2 in September. Prices increased for 48 commodities last month, with only prices for wood falling. Prices for products like steel have increased for 15 consecutive months.

These higher costs are being passed on to consumers which, together with surging wage growth, is raising concerns that high inflation could be more persistent rather than transitory as Federal Reserve Chair Jerome Powell has repeatedly argued. The government reported on Friday that wage growth in the third quarter was the strongest on record.

Fed policymakers are due to meet on Tuesday and Wednesday. The U.S. central bank is expected to announce that it will start reducing the amount of money it is injecting into the economy through monthly bond purchases.

Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury yields rose.

The ISM survey’s forward-looking new orders sub-index dropped to 59.8 last month, the lowest reading since June 2020 when COVID-19 lockdowns were in effect, from 66.7 in September. Factories have plenty of unfinished work.

“One interpretation of this dramatic fall could be manufacturers facing a shifting paradigm that accepts supply constraints as a new reality,” said Kurt Rankin, an economist at PNC Financial in Pittsburgh, Pennsylvania.

“Demand does not appear to be abating, raising the question of whether businesses’ patience and profitability potential is becoming exhausted and that new inventory management techniques and the promise of fewer goods on offer could be emerging.”

Factories hired more workers, with employment expanding for a second straight month. Though manufacturers said they were still struggling to find workers, there were hopeful signs.

According to the survey, “an increasing percentage of comments noted improvements regarding employment, compared to less than 5% in September.” It also noted that “an overwhelming majority of panelists indicate their companies are hiring or attempting to hire.”

This, combined with a jump in consumers’ perceptions of the labor market last month, suggests employment gains accelerated in October after the economy created the fewest jobs in nine months in September. Worker shortages, however, remain a constraint. There were 10.4 million unfilled jobs at the end of August.

The Labor Department is scheduled to publish its closely watched employment report for October on Friday.

A separate report from the Commerce Department on Monday showed construction spending dropped 0.5% in September, which was blamed on shortages and Hurricane Ida in late August.

Still, the spending composition was not as weak as the government had assumed in its advance third-quarter GDP estimate last week. That led some economists to anticipate that third-quarter GDP growth could be revised up to about a 2.2% rate from the published 2.0% pace when the government releases its second estimate later this month.

UK to remove all countries from its COVID travel ban red list

Beginning Monday, the UK will remove the remaining seven countries from its COVID-19 travel ban red list, which will be reviewed every three weeks and revised in case of emerging COVID variant threats, the British government has announced.

From 4am on Monday, the remaining seven destinations on the UK’s COVID-19 travel ban red list – Colombia, the Dominican Republic, Ecuador, Haiti, Panama, Peru and Venezuela – will be removed, it said in an update on Thursday.

The red list itself has not been scrapped and will be reviewed every three weeks, with restrictions imposed in case of emerging COVID variant threats.

The Department for Transport (DfT) said that Delta is now the dominant COVID variant in most countries around the world, which means the risk of known variants entering the UK has reduced.

“This is another step in the right direction for international travel with more good news today for passengers, businesses and the travel sector,” said UK Transport Secretary Grant Shapps.

“Whether it’s reuniting family members or making it easier for businesses to trade, the success of the vaccine rollout both at home and abroad has allowed us to reach this milestone. However, we must not be complacent and remain ready to spring into action and defend our hard-won gains if needed,” he said.

The travel regulations between India and the UK for fully vaccinated passengers had been eased earlier this month, with Covishield-vaccinated Indians not required to undergo self-isolation at a declared address on entry into Britain.

Travellers coming from red list countries continued to be subjected to a mandatory 10-day quarantine at a government-sanctioned facility. The latest update means travellers vaccinated with UK-recognised vaccines will all face similar international travel rules.

“The red list and quarantine remain vital in protecting our borders – we are keeping a small number of quarantine rooms on standby and will not hesitate to take swift action by adding countries to the red list if the risk increases again,” said UK Health Secretary Sajid Javid.

The DfT said government scientists will continue to closely monitor variants of concern in order to ensure the UK’s approach remains “proportionate”, surveillance through regular testing continuing throughout.

Meanwhile, under rules effective since October 24, fully vaccinated travellers returning to England from countries not on the travel ban red list – including India – can use a COVID negative Lateral Flow Test (LFT) instead of the more expensive Polymerase Chain Reaction (PCR) test.

All travellers must complete a compulsory passenger locator form prior to travel, including providing a test booking reference number supplied by a testing provider.

Passengers who are not fully vaccinated with an authorised vaccine must still take a PCR test on day 2 and day 8 test and complete 10 days self-isolation on entry to the UK.

It comes as the UK recorded 39,842 coronavirus cases on Thursday, reflecting a downward trend over the last few days having crossed 50,000 daily cases last week.

Travel cos expect more nations to accept Covaxin

Travel service providers expect more countries to ease travel requirements for Indians vaccinated with Covaxin even as the World Health Organization (WHO) this week sought additional clarifications from Bharat Biotech before granting emergency use licence (EUL) for its Covid vaccine.

Oman added Covaxin to the approved list of Covid-19 vaccines for travel on Wednesday, lifting quarantine requirement for passengers from India who have received two doses of the vaccine at least 14 days before the estimated arrival date.

Travel platforms said they are seeing an uptick in bookings for destinations that are accepting Covaxin such as Greece, Sri Lanka and Mauritius.

“While WHO acceptance opens the doors to multiple global destinations and is certainly of value, inpidual governments can take an independent call,” said Romil Pant, senior vice-president, leisure travel at Thomas Cook (India). “And, of course, what is a clear positive is that several destinations such as Dubai, Malpes, and Russia offer entry irrespective of vaccine status with checks and balances like RT-PCR being in place,” he said.

“With the WHO expecting to reconvene for the final risk-benefit assessment for Covaxin on November 3, we are hopeful of an approval this time round,” Pant said.

Nishant Pitti, CEO of EaseMyTrip, said that while countries are not bound by WHO suggestion and can decide on their own to recognise Covaxin, approval by WHO will work as a shot in the arm. “A significant part of our population is vaccinated with Covaxin. The approval will further enable more travellers to visit their favourite international destinations,” he said.

Ixigo said countries such as Serbia have recognised Covaxin based on a ‘mutual acceptance’ of vaccines, while Oman has possibly approved it for ease of travel of Indian nationals.

“Similarly, for ease of travel and to attract tourists, Mauritius is also accepting Covaxin,” the company said.

“Global acceptance of Covaxin will definitely ease international travel plans for Indian travellers who are currently vaccinated with Covaxin but cannot travel or have to face mandatory quarantine due to current restrictions.”

Subhash Goyal, chairman of STIC Travel and Air Charter Group, pointed out that Prime Minister Narendra Modi and some cabinet ministers have taken Covaxin and it has been cited as being effective against the Delta variant.

“Some people have preferred Covaxin over Covishield seeing encouraging findings. Some countries are recognising Covaxin bilaterally,” he said. “So, the sooner WHO recognises it the better. There should not be unnecessary delays just because it is from a developing country.”

Daniel D’Souza, president and country head at SOTC, said he is hoping for positive news for travellers doubly jabbed with Covaxin. “As per a recent report, the United States Centres for Disease Control and Prevention (CDC) has given clearance to Covaxin with certain riders. If more countries approve of Covaxin it will enable Indians to pursue their long-pending travel plans,” he said.

Marketers need to engage through empathy: Salesforce’s Stephanie Buscemi

Two weeks ago, shares of Salesforce soared to a new all-time high, giving the software giant a market cap of almost $250 billion. Despite a spectacular quarter in which it passed $5 billion in quarterly revenue for the first time in the company’s 21-year history, Salesforce laid off around 1000 people, approximately 1.9% of the workforce, as per reports. In a way, the coincidence of these developments perfectly captures the prevailing mood of uncertainty in the post-pandemic world. A world where businesses and people have to navigate an unprecedented crisis in the present while safeguarding the future.

In an exclusive interaction with Brand Equity earlier last month, Stephanie Buscemi, EVP and global chief marketing officer of Salesforce, shared her views on the forces reshaping relationships between people, corporations and brands. The company declined our email request for a comment from Buscemi on the recent layoffs and impact on the employer brand, but explained the cuts as “reallocating resources to position the company for continued growth.”

Edited excerpts:

Brand Equity (BE): How has the pandemic affected relationships between brands/companies and customers, in your view?
Stephanie Buscemi (SB) : Values and belief systems matter more than ever. Businesses are powerful platforms for social change and one of the platforms where we can best help educate, elevate, empower, and learn.

Marketers need to engage through empathy. To gain empathy, we need to listen to our communities, employees, customers and partners, and remind ourselves that we’re marketing to people.

BE: What’s the defining trend of 2020 that will reshape the marketing ecosystem?
SB: Large segments of society are now addressable by products and services previously out of reach. With a digital-first mindset, there’s a good opportunity to be smarter about using data to make sure that our touch-points with customers are intentional, mindful, and impactful. For marketers, smart use of data and AI delivers personalization, and personalization drives growth.

Of course, a lot remains unknown. I believe that human connection will persist and there will always be a need and longing for true connection with one another. This pandemic is a full demonstration of that. We just aren’t made for isolation. Even though we’re moving towards a more digital world, the human connection will always persist.

BE: From a marketer’s perspective, how are you dealing with the challenges of the fractured world of business?
SB: The pandemic has tested the marketer’s ability to be adaptable. So, while retrofitting was an initial coping mechanism, we must now continuously rebuild to adapt to our ever-changing situations.
While working through the challenges of Covid-19, I have created six core principles that help guide us.

Gearing up for the new normal: How SMEs can manage their finances better in the post-COVID economy

By Jaya Vaidhyanathan

Small businesses find themselves in a precarious situation today. Yes, the economy is in a bad shape now, but it was so even before the outbreak of COVID-19, and small businesses were undergoing a prolonged period of lacklustre demand. This has since worsened. Assuming the night is darkest just before the dawn, small businesses can hope to reboot operations once the dust settles. Let’s see how a changed approach towards finances can help speed things along.

Alleviating the punishing interest burden: The Reserve Bank of India (RBI) has been criticised in the past for keeping interest rates high, making it difficult for small businesses to compete with conglomerates or foreign competitors who enjoy cheap credit in currencies like the USD. While the RBI has dramatically reduced interest rates over the last two years, banks have hardly passed on this reduction to their customers, constrained by their own limitations in the form of high NPAs and such.

The recent directive of the RBI for banks to link their interest rates to external benchmarks is a step in the right direction. Small businesses will do well to shift to the new regime where rate cuts from the central bank are reflected sooner in the rates they lend from banks.

Differentiating between liquidity and solvency: While banks expect their borrowers to be solvent over a period of time, cashflow mismatch is something they have ignored for quite some time. Let’s take a hypothetical. Say a small-scale manufacturer from Tirupur supplies PPEs to government hospitals. While he enjoys favourable demand (translating to good top line), the hospitals are making things difficult by delaying payments, thereby stretching out the time to realise the proceeds of his sale. In this case, what the small business owner needs is temporary funding to meet his cash crunch – cashflow financing – rather than funding to buy assets.

SBI has recently announced the change of the credit appraisal model for small businesses from asset-based to cashflow-based financing. This will be a gamechanger, leading to easier funding for businesses that do not fit the traditional working capital models of large corporates that the banks are used to funding.

Going digital to reduce concentration risk: This lockdown period saw our neighbourhood “kirana” shops innovating quickly to meet public demand – by taking orders over the phone, arranging hyper local door delivery, and the like. On the other end of the spectrum, India’s largest company is also doing the same with the test launch of JioMart in Mumbai that provisions orders of groceries over WhatsApp. Both are essentially reaching out to a wider customer base, now that digital is trumping brick-and-mortar, even in sectors like education.

Businesses can be small in size, but big in reach, so that they are not at the mercy of a handful of customers. Digital can be truly empowering in this regard. A few weeks ago, the weavers of rural Bihar, with their garment inventory stuck due to lockdown, were able to sell sarees through Twitter promotion!

Green shoots and greenfield industries: The emotional backlash against China in these times could potentially develop into an economic backlash, with countries across the globe wanting to persify their supply chain and neutralize their dependency on China. In India, for instance, discussions are full-on with foreign companies encouraging them to see India as an alternative to China. While this effort requires broader, centre-level policy changes to materialize, it opens avenues for small entrepreneurs to grab their share of the market – which is currently dominated by China.

In such cases, small businesses can opt for supply chain financing, that helps them to cheaper credit from banks based on the comfort factor provided by MNCs who avail goods/services from them. Not only does the Indian MNC get assured funding from the banking system, but its small suppliers (who may not be well known or have enough bargaining power) also get to secure cheap funding, so that the entire supply chain is well equipped for global competitiveness.

Keeping tabs on borrowings: Entrepreneurial ventures need to keep their debt burdens at manageable levels. Another black swan event like the COVID-19 pandemic will likely wipe out debt-laden businesses. Small businesses that compromise on growth temporarily by keeping indebtedness low are likely to sustain a good momentum of growth over the longer period.

While banks have a responsibility to ensure that loan funds are put to optimal use, borrowers also need to realise that resorting to uncouth tactics, like funding long-term assets using working capital borrowing, is only going to damage their competitive streak by permanently tarnishing their image in the market.

(The writer is CEO, BCT Digital.)

( Originally published on May 23, 2020 )

Sewing machine biz growing strong during pandemic, says Usha International

Sewing machine major

Usha International

on Monday said that the demand for household machines has gone up in the past one year amid Covid-19 disruptions. Company officials said that sales in semi-urban and rural areas are thriving, while it is also on track in urban centres such as Delhi, Mumbai, Chennai and Kolkata.

“We have seen a healthy growth of more than 15 per cent in this (household) category. Usha’s market share in the automatic zigzag (white machines) category has grown substantially and closed 2020-21 with over 65 per cent market share in this category,” Usha International Senior VP (sewing machines category) Parveen Kumarr Sahni told PTI.

“The sewing machine is contributing around 30 per cent to the company’s revenue at present, and we intend to increase this contribution further by expanding the category across India,” he said

Sahni said that southern states are the priority right now for Usha International, followed by West, North, and East.

“People in the southern region are more inclined towards pursuing sewing and quilting as a hobby followed by West and North. However, North and West are emerging to be a big market in the coming years,” he said.

Usha remained optimistic in high growth during the second half of the year with upcoming festive months.

“We are optimistic about sales especially as the festive season rolls in, starting with Onam and Raksha Bandhan. We hope to see demand increasing, and the momentum going through Durga Puja and Diwali,” Sahni said.

How the supply chain broke, and why it won’t be fixed anytime soon

Computer chips. Exercise equipment. Breakfast cereal. By now, you’ve probably heard: The world has run short of a great many products.

In an era in which we’ve become accustomed to clicking and waiting for whatever we desire to arrive at our doors, we have experienced the shock of not being able to buy toilet paper, having to wait months for curtains and needing to compromise on the color of our new cars.

Of far greater importance, we have suffered a pandemic without adequate protective gear. Doctors cannot obtain needed medicines. In Alaska, people are struggling to find enough winter coats. Airplanes are delayed while crews wait for food deliveries.

Why is this happening?
The pandemic has disrupted nearly every aspect of the global supply chain — that’s the usually invisible pathway of manufacturing, transportation and logistics that gets goods from where they are manufactured, mined or grown to where they are going. At the end of the chain is another company or a consumer who has paid for the finished product. Scarcity has caused the prices of many things to go higher.

When did this start?
The disruptions go back to early last year, to the beginning stages of the pandemic. Factories in parts of the world where a lot of the globe’s manufacturing capacity sits — countries like China, South Korea and Taiwan as well as Southeast Asian nations like Vietnam and European industrial giants like Germany — were hit hard by the spread of coronavirus cases. Many factories shut down or were forced to reduce production because workers were sick or in lockdown. In response, shipping companies cut their schedules in anticipation of a drop in demand for moving goods around the world.


That proved to be a terrible mistake. Demand for some things — restaurant meals, trips to vacation destinations, spa services — indeed cratered.

But Americans took the money they used to spend on such experiences and redirected it to goods for their homes, which were suddenly doubling as offices and classrooms. They put office chairs and new printers in their bedrooms, while adding gym equipment and video game consoles to their basements. They bought paint and lumber for projects that added space or made their existing confines more comfortable. They added mixers and blenders to their kitchens, as parents became short-order cooks for cooped-up children. The timing and quantity of consumer purchases swamped the system. Factories whose production tends to be fairly predictable ramped up to satisfy a surge of orders.

Why couldn’t factories just produce more?
Many did, but this produced its own troubles. Factories generally need to bring in components to make the things they export. For example, a computer assembled in China may require a chip made in Taiwan or Malaysia, a flat-panel display from South Korea and dozens of other electronics drawn from around the world, requiring specialized chemicals from other parts of China or Europe.

The dramatic surge in demand clogged the system for transporting goods to the factories that needed them. At the same time, finished products — many of them made in China — piled up in warehouses and at ports throughout Asia because of a profound shortage of shipping containers, the standard-size steel boxes that carry goods on enormous vessels.

What happened to all the giant container ships?
In simplest terms, they got stuck in the wrong places. In the first phase of the pandemic, as China shipped huge volumes of protective gear like face masks and hospital gowns all over the world, containers were unloaded in places that generally do not send much product back to China — regions like West Africa and South Asia. In those places, empty containers piled up just as Chinese factories were producing a surge of other goods destined for wealthy markets in North America and Europe.


Because containers were scarce and demand for shipping intense, the cost of moving cargo skyrocketed. Before the pandemic, sending a container from Shanghai to Los Angeles cost perhaps $2,000. By early 2021, the same journey was fetching as much as $25,000. And many containers were getting bumped off ships and forced to wait, adding to delays throughout the supply chain. Even huge companies like Target and Home Depot had to wait for weeks and even months to get their finished factory wares onto ships.

Meanwhile, at ports in North America and Europe, where containers were arriving, the heavy influx of ships overwhelmed the availability of docks. At ports like Los Angeles and Oakland, dozens of ships were forced to anchor out in the ocean for days before they could load and unload. At the same time, truck drivers and dock workers were stuck in quarantine, reducing the availability of people to unload goods, and further slowing the process. This situation was worsened by the shutdown of the Suez Canal after a giant container ship got stuck there, and then by the closings of major ports in China in response to new COVID cases.

Many companies responded to initial shortages by ordering extra items, adding to the strains on the ports and filling up warehouses. With warehouses full, containers — suddenly serving as storage areas — piled up at ports. The result was the mother of all traffic jams.

What exactly is in short supply?
Just about anything that is produced or manufactured — from chemicals to electronics to running shoes. Shortages beget more shortages. A paint manufacturer that needs 27 chemicals to make their products may be able to buy all but one, but that one — perhaps stuck on a container ship off Southern California — may be enough to halt production.


Why are new cars so hard to find?
Cars use computer chips — lots of them — and the shortages of chips have made it more difficult to produce vehicles. In turn, that has made it harder and more expensive to buy cars.

Why are some food pantries running short of goods for hungry people?
The global supply chain shortages have affected aid groups and nonprofits by making it more difficult for them to acquire excess inventory from profit-making companies that are themselves dealing with supply chain issues.

Is this really all the pandemic’s fault?
The pandemic has certainly made supply and demand extremely volatile, shifting faster than the supply chain can adjust. But that came on top of decades of very lean inventories kept by companies to limit their costs.

A dollar that a car company spends to warehouse computer chips as a hedge against supply chain troubles is a dollar that it cannot use on something else, including bonuses for executives or pidends for shareholders. Monopolistic tendencies also help explain shortages. Beef is scarce and prices are high, but this is largely because meatpackers have consolidated and eliminated capacity as a way to bolster prices and profitability. These sorts of choke points exist throughout the supply chain.

When will the shortages end?
No one really knows, but there are good reasons to suspect that this will be with us well into 2022 and maybe longer. Shortages and delays are likely to affect this year’s Christmas and holiday shopping season by making it much harder to find key goods. A lot of companies ordered earlier, which is exacerbating the shortages, sending more surges of goods toward ports and warehouses.

For hotels, hygiene has become an important aspect of brand standard: RepUp’s Pranjal Prashar

Hit hard by the pandemic, the hotel industry seems to be on the road to recovery. With Covid cases declining and people finding the confidence to take a vacation, hotels across the country are seeing a turnaround. In an interview with ET Digital, Pranjal Prashar, Co-founder, RepUp, talks about the lessons learnt, the role of technology and preparing for the future. Edited excerpts.

Economic Times (ET): How has the hotel industry recovered from the COVID shock, and what are some emerging patterns in the new normal?
Pranjal Prashar (PP):
After experiencing a slump for more than a year, the hotel industry is finally seeing light at the end of the tunnel. The occupancy rate in hotels has reached 44-46%, which is almost half the hotel room inventory occupied in India.

We have also witnessed revenge travel and significant recovery in some markets like Goa and Himachal Pradesh where occupancy has touched 80% and 60% respectively. Hotels and businesses that were ready with data, packaging, and processes have done really well in these times.

We are seeing some emerging trends across the globe. Hygiene has become an important aspect of any brand standard; a strong communication plan is a key to building trust. Hotels have realized that going digital and direct to customers is the sustainable way. A new way of doing business is emerging. This includes new technology solutions focused on post covid opportunities.

ET: Why are brands increasingly embracing digital transformation and a mobile-first strategy to provide the best possible guest experience?
The hospitality industry has been slow in digital transformation even before Covid. During the last 18 months, it has become clear that digital is a new way, and companies are not able to catch up on technology and will not be able to grow in the new normal. Personal touch in hospitality is now required to be delivered with less human interaction.

Also, companies are constrained with limited staff and resources, both significant problems that can be solved by new technology. Delivering an excellent guest experience digitally and with less manpower and manual processes is the way forward.

The mobile-first approach needs an omnichannel touch. This means personalized guest communication should be enabled across email, SMS, WhatsApp, FB messenger, QR Code, etc. Hotels are embracing applications such as allowing guests to digitally check-in, checkout, offer upsells, ask feedback requests, etc.

ET: How do large hospitality firms revitalize and communicate new brand standards to their customers?
Large hospitality firms have tools and means to communicate the new brand standard. The new brand standard emphasizes cleanliness and a contactless experience. Hilton properties around the globe have implemented the CleanStay program in partnership with RB, the manufacturer of Lysol products and other disinfectants. Accor Hotels developed the ALL SAFE Cleanliness & Prevention campaign in partnership with Bureau Veritas – a health and safety inspection and certification company. Similarly, IHG launched the “IHG clean promise” campaign.


Pranjal Prashar

A good first step is updating all online listings and brand assets on OTAs/websites with new brand images, hygiene standards, and policies. The second part is communicating it proactively to upcoming guests and past visitors. We are seeing examples where hotels are sending emails/WA messages with their hygiene practices before check-in irrespective of booking source. A detailed log and trail of cleanliness staff/processes etc are also being made available to guests in some chains now.

We are seeing marketing and PR campaigns focusing on the use of digital tech to deliver a contactless experience, high standards of cleanliness, commitment to social distancing guidelines, constant sanitization of common areas and frequently touched items, temperature checks, and health declarations at the doorstep to make guests feel safe.

ET: How can businesses capitalize on the growing popularity of domestic travel by focusing on a certain customer segment?
India due to the large domestic market has seen some positive trends, unlike some other countries where the dependency on international travel was significant. Domestic opportunity is significant and we have seen huge demand in markets like Uttrakhand, Himachal, Goa, and other accessible places from the metropolitan cities.

To leverage the domestic opportunities, hotels have to bundle their offerings and look for new segments of customers who are available and traveling. Staycation was not a buzzword earlier, now everyone is leveraging the new trend. Also, hotels with F&B units were able to market their F&B offerings to city guests to earn that extra revenue.

The foundation of such marketing and promotion is having a good data system that can help identify targets, plan and automate such promotions across multiple channels like email/SMS/WhatsApp/Social, etc.

ET: AI as a new distinction: How can technology assist the hospitality industry in regaining lost business?
AI had been a far-fetched idea in hospitality with very few companies actually delivering promised values.

Machine learning models are relevant in almost every stage of the guest journey. One key approach is identifying the persona of the guest based on available data at different touchpoints and maximising revenue. This can be done using multiple models across Web engagement (a bot), personalized upsell & bring back campaigns.

ML also has good use cases in reducing the manpower/manual processes. Our reputation management solution RepUp uses ML to gather, analyze and automatically reply to reviews based on the context and sentiment. The platform identifies issues from reviews and automatically creates tickets and assigns them to relevant teams.

ET: Making the consumer king, why should businesses strive for a more personalized experience for their visitors?
Personalized experiences are very important for converting visitors to brand promoters. Visitors who have received a personalized experience are likely to spend more and stay loyal to the brand. Personalization is more than just adding the first name in guest communication.

Personalized marketing can wow guests and increase conversion and engagement for every message sent. Platforms like Xperium can combine historical, demographic, behavioral, interest, preference, booking, and footprint guest data to create hyper-personalized guest communication.

ET: What are the lessons from the pandemic for smaller hotels and hoteliers?
Small hotels need to be agile in their approach and quickly adapt to the changing market dynamics. Hotels need to keep their data in a format that is easily accessible and can provide actionable insights.

Marketing to the right audience at the right time can help hotels generate more revenue from each vertical like Rooms, F&B, Spa etc. Small hotels need to repackage their offering and cater to specific customer segments such as people working from home.

Actor Sonu Sood to debut as TV anchor for Good News Today

Bollywood actor, producer, philanthropist and humanitarian Sonu Sood is set to make a debut as a TV anchor for Good News Today, the latest news channel from India Today stable.

Sood will go live at 9 pm every evening as a host of the channel’s signature program ‘Desh ki Baat Sunata hoon’.

The show will have inspirational stories of human triumph from across the length and breadth of the country, including stories of people, who make our country proud with their struggle, determination and achievement and inspire many others to aim for higher goals.

Sood’s presence as an anchor consolidates the line-up of programming for the channel, which aims to shift the focus of news towards constructive and affirmative narratives.

Sood has been the harbinger of humanitarian goodwill stories during the pandemic, standing for hope, human triumph and inspiration.

“Sonu Sood has touched humanity with his actions during the pandemic and emerged as a source of positive energy and inspiration. He personifies the intent of our channel – GOOD NEWS TODAY. His presence on the channel amalgamates our efforts to bring about more good news and the following smiles. We are excited to present him in his new avatar,” said Kalli Purie, Vice Chairperson, India Today Group.

Good News Today, which goes live on Sunday evening, intends to shift news presentation from doom and gloom of the world to stories around hope, success and achievements abound.

The news channel rests on the motto of “acchi khabar, sacchi khabar”- true stories that foster goodwill and unite audiences in their higher purpose.

Coronavirus impact worsens India’s educational divide, UN agency says

India’s school closures and its children’s lack of smartphone and internet facilities amidst the COVID-19 pandemic have worsened an educational pide, the U.N. cultural agency said, flagging risks to young people’s futures.

About 248 million students were hit by school closures since March last year, UNESCO said in a report, though many states have started easing curbs as infections dwindled and vaccinations rose in the last two months.

Nearly 70% of students lacked smartphones or other devices to access classes online, while a majority grappled with poor Internet facilities, or none, especially in rural areas, it added.

“There is an urgent need to plan to get students and their teachers back to school,” the agency said in its report on education in India issued on Tuesday.

Almost 40% of parents could not afford internet costs, affecting learning, and so widening the educational gap between different parts of society, it said in the report, based on government data.

Widespread economic distress and job losses as people fled home to villages in the countryside have pushed families into poverty, worsening distress for children from such woes as malnutrition and early marriages for girls, the agency said.

Worst-hit were private schools that receive no government grants, but where many poor families aspiring for a better education send their children, as parents found themselves unable to pay fees after the reduced economic activity.

India’s economy contracted an annual 7.3% in the fiscal year that ended in March 2021, in the worst recession since independence from colonial ruler Britain in 1947.

Salary cuts or job losses faced teachers in the private schools employing nearly 30% of India’s total of 9.7 million, as many students were withdrawn or shifted to schools subsidised by the government.

UNESCO called for India to recognise teachers as “frontline workers” in the battle on the pandemic, and improve working conditions for them to ensure better outcomes in education.

“Quality of education is the core challenge of the next decade,” it said.