Hotels cut back on staff, redeploy manpower to cut costs

The lockdown due to the pandemic delivered a body blow to the revenues of the hospitality industry during FY21, with room occupancies crashing to their worst-ever levels across the country.

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26 Aug, 2025 12:21

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Closed properties and mounting losses have forced premier hotel brands to do away with excess staff in a desperate attempt to stay afloat in a challenging business environment.

Several luxury properties under the Oberoi, Trident, Taj, SeleQtions, Vivanta, JW Marriott, Renaissance and The Westin banners, to name a few, have rationalised their staff strength.

The lockdown due to the pandemic delivered a body blow to the revenues of the hospitality industry during FY21, with room occupancies crashing to their worst-ever levels across the country.

During the peak of the lockdown, hotels were either completely shut or were working with occupancies of just 10-15 percent as foreign tourist arrivals came to an abrupt halt. Rooms were occupied by healthcare workers or by quarantined guests (at discounted rates) and long-stay guests.

30% reduction at Oberoi

Vikram Oberoi, Managing Director and CEO, EIH, the flagship of the Oberoi Group, said: “We have reduced our manning by just under 2,000 people, which is a 30 percent reduction. Not all of this is permanent in nature. Some of it will come back as business levels pick up. We continue to focus on multi-skilling and continue to deploy technology. We are at 4,500 (staff) as of now as against 6,500 prior to the pandemic.”

Oberoi was talking to analysts post the announcement of the April-June quarter, where EIH posted a consolidated net loss of Rs 107 crore. The loss in Q1 followed the consolidated net loss of Rs 384 crore clocked during FY21.

IHCL reduces headcount by 25%

Tata Group’s Indian Hotels Company (IHCL), one of the country's biggest hotel chains with 150 operational hotels in India, has reduced its headcount per room by 25 per cent. From 1.53 in April 2020 the staff-to-room ratio stood at 1.14 as of March 2021. The SeleQtions and Vivanta brands saw the maximum staff related changes. IHCL is the biggest employer in the Indian hospitality industry with more than 34,000 employees.

With a complete freeze on hiring, IHCL redeployed staff to new properties opening in other locations. The company also rolled out a new programme called A1 wherein the same employee does different jobs during an eight-hour shift.

Puneet Chhatwal, Managing Director and CEO, IHCL said: “We redeployed staff in new properties that are opening and redeployed some corporate employees in other Tata group companies, multi-skilling them. We scaled our people in different areas so they are able to work in different departments within an eight-hour shift, and that’s the new way of working.”

Chalet Hotels, promoted by the K Raheja family, with brands such as The Westin, JW Marriott and Renaissance, also rationalised staff to improve productivity and boost efficiency. The Mumbai-based company had 2,817 temporary and contract staff by the end of FY21 from around 2,900 in FY20.

Chalet Hotel’s staff-to-room ratio stood at 0.74 employees for the second quarter in a row in Q4FY21. This ratio was 1.18 employees to a room in December 2019.

Permanent closure risk looms over many hotels

According to the Federation of Hotel and Restaurant Associations of India (FHRAI), the country’s hotel industry suffered a revenue loss of over Rs 1.3 lakh crore in FY21 due to the pandemic. About 20-25 percent of branded hotels in India are at risk of permanent closure, according to the Hotel Association of India.

The Hyatt Regency in Mumbai abruptly shut operations in June due to the lack of working capital and non-payment of staff salaries and vendor expenses. Its staff of 300 moved the industrial court against the property’s owners, Asian Hotels (West), seeking relief.