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Ergo Update

21-May-2020

Introduction

As several countries including India remain in lockdown and continue to follow strict social distancing measures, the question on everybody’s mind today is how quickly will we return to “business as usual”, after nearly eight plus weeks of standstill?

After lockdown, travel restrictions and social distancing will certainly be advised to continue for some time. Consequently, businesses should adjust their procedures in order to ensure that regulatory compliance, safety and effective business operations are achieved in a seamless manner.

Except essential services, currently all businesses are facing revenue and operational crisis, in particular, those in the leisure and hospitality sectors. The hospitality industry is expected to take at least 12 – 18 months to recover with some experts predicting that revenues for 2020 may contract 30% - 50% from 2019 levels.

Essentially a ‘people’ industry, the hospitality industry stands to lose if people fear travelling and meeting other people. One of the most significant obstacles hotels will have to overcome is regaining guest confidence in the safety, health and hygiene standards maintained by hotels.

Safety of Guests

Many international brands have already commenced this ‘confidence building’ exercise in earnest, including Marriott, Hilton, IHG, Oberoi, MGM Resorts, Radisson, Best Western, Hyatt.

Most brands have developed special ‘protocols’ or ‘programs’ emphasising their enhanced hygiene initiatives to ensure guest safety during their stay. For instance:

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Hilton has tied up with the makers of disinfectants ‘Lysol’ and ‘Dettol’ and have consulted the Mayo Clinic to develop new cleanliness processes and training, called ‘Hilton Clean Stay’ system.

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Marriott has set up a ‘Marriott Global Cleanliness Council’ which is a multi-pronged platform to raise cleanliness standards to counter current health and safety challenges brought about by the COVID- 19 pandemic.

The key measures which these international brands intend to implement on the path to revenue recovery include:

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Hospital grade disinfectants for cleaning including enhanced technologies such as electrostatic spraying technologies for cleaning.

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New cleaning protocols are being established for both, hotel back of house and hotel front of house. Thorough deep cleaning of rooms especially high touch points such as doorknobs, switches, television remotes, climate control switches, beds and bedding etc. Some brands, such as Hilton, are considering taping on doors to the hotel rooms which have been deep cleaned and sanitised to provide comfort to the incoming guest. 

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Some hotels are also considering decluttering stationery items such as pens, notepads and in-room menus from the rooms and replacing these with digital alternatives or providing them only on request, so as to reduce the number of items required to be sanitized.

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Higher frequency in cleaning of public areas such as staircase, lift, lobby, gym, restaurants etc.

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Strategically located hand sanitizer dispensers and disinfectant cleaning wipes in high traffic areas such as elevators to enable guests to clean their hands and the buttons before / after use.

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Signage at hotel lobby and back of the house listing out social distancing norms. Perhaps even a physical barrier at the lobby for check in. Some hotels are even considering contactless check-in and electronic key facilities using the hotel’s customer mobile application.

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Along with security checks, there will now be mandatory temperature checks at the entrance of the hotel. Some hotels are also considering a full body thermal scanning in order to be unobtrusive. 

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Face masks and hand sanitisers will have to be made available to guests on request as part of the toiletries products which are usually kept in the room. Although, this provision may vary from location to location as not everyone is aligned on whether masks are appropriate.

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In line with the social distancing requirements, rules for guests using common area amenities such as the swimming pool, gym, restaurants are being relooked at. Restaurant capacities are also being reviewed to ensure safe distances between tables are maintained.

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Laundry handling will be strictly segregated to ensure there is no cross contamination. All laundry equipment will also undergo thorough sanitisation and deep cleaning at regular intervals.

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Guests will be asked to sign written declarations regarding their health and have temperature checks done at least daily. All non-resident guests of the hotel will also have their temperatures checked before entering the hotel.

The American Hotel and Lodging Association has published Guidelines on ‘Enhanced Industry-wide Hotel Cleaning Standards in response to Covid-19’ requiring, amongst other things, use of additional signage, better cleaning products and social distancing.

Health & Safety Protocols | Employees, Suppliers & Contractors

As priority, hotels have to provide a safe place of work for their employees.

The following steps are being implemented by hotels to ensure compliance by their employees, suppliers and contractors of the health and safety protocols being put in place by such hotels:

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Mandatory employees’ self-declaration regarding their travel history and contact with family members / other persons who have tested positive for COVID-19.

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Employees will be tested for COVID-19 at regular intervals and appropriate protocol would be followed for positive cases, including immediate isolation and suitable communication to third parties.

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Necessary Protocol training to be conducted to ensure employees follow all the health, hygiene and safety procedures including wearing gloves and masks, social distancing, frequent sanitisation of work equipment such as alcohol trolleys in restaurants and coffee machines etc.

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Employees will be asked to share their residential address to determine whether they will travel from a containment / restricted (red) zone and also share details of the mode of transport to be used by them.

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Rotation of employees is also being considered to ensure employee safety.

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Suppliers and contractors visiting / working in the hotel premises will be required to follow similar health and safety checks as the employees. In case of certain hotels, delivery trucks will be permitted to enter the hotel premises only after sanitisation of the truck and temperature check of the driver. Some hotels also intend to take a self-declaration from vendors and suppliers that they do not have flu like symptoms before permitting them to enter the premises.

Insurance & Liability

Hotels should review their current insurance policies to ascertain the nature and extent of cover for business loss on account of the current pandemic and the resultant governmental orders for lockdown. Most of the domestic business interruption policies cover interruptions due to physical damage of the property on account of acts of God but do not cover a pandemic situation or government mandated lockdown situation. Perhaps hotels could consider getting the required insurance cover to account for such pandemic / epidemic and resultant government mandated lockdown in the future.

Further, it should be examined whether the hotel is covered from risk in case if any guest contracts COVID-19 within the hotel premises and makes a claim against the hotel. If insurance does not provide protection or comfort, hotels should consider having guests sign waiver/relinquishment forms at the time of check-in.

Revisiting Material Contracts

Hotels should be examining all material contracts with suppliers and contractors to make sure that they contain adequate provisions to protect the hotel with respect to COVID- 19 risks and how the performance of those contracts could threaten the safety of employees or guests.

Hotels should consider whether any licenses or concessions in the hotel require re-negotiation to deal with COVID- 19 risks.

Conclusion

A systematic and comprehensive review ought to be undertaken during this lockdown period in order to ensure that business recovery after lockdown occurs in a safe and efficient manner. While the hospitality industry has weathered many storms in the form of SARS, swine flu and the like, the current situation is indeed ‘novel’. Flexibility and adaptability will go a long way to ensure successful navigation of the path to recovery. 

-       Sudip Mullick (Partner) & Sneha Oak Joshi (Senior Associate)

For any queries please contact: editors@khaitanco.com

Sudip Mullick (partners)

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The contents of this email are for informational purposes only and for the reader’s personal non-commercial use. The views expressed are not the professional views of Khaitan & Co and do not constitute legal advice. The contents are intended, but not guaranteed, to be correct, complete, or up to date. Khaitan & Co disclaims all liability to any person for any loss or damage caused by errors or omissions, whether arising from negligence, accident or any other cause.

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