Exclusive Interview | CA Mukul Asthana , CFO, Ahuja Residences
/“The hospitality industry is expected to face significant financial shifts in the coming years due to evolving consumer preferences, technological advancements, environmental concerns, and economic factors.”
With over 17 years of experience across multiple industries, what drew you to the hospitality sector, and how has the transition been for you?
Transitioning to the hospitality sector after 17 years in various industries has been both exciting and rewarding. What drew me to hospitality was the dynamic, people-centric nature of the industry. Unlike other sectors, hospitality thrives on creating memorable experiences and building genuine connections with guests, which aligns closely with my passion for service and relationship-building.
The transition has been smooth, thanks to the transferable skills I’ve accumulated over the years, such as leadership, problem-solving, and adaptability. However, I’ve also embraced the unique aspects of hospitality, like its fast-paced environment and the importance of attention to detail. It’s been a fulfilling journey so far, and I’m excited to continue growing in this vibrant industry..
What are the key financial challenges you’ve encountered in the hospitality sector compared to other industries you’ve worked in?
Hospitality is a high manpower and seasonal industry as compared to other stable industry, though we at Ahuja residences mostly cater corporate travel still we have to seasonality challenges during festival season etc (in India we have lot of festivals), also demand is quite volatile during weekends, if we talk about manpower there is challenge on cost as hospitality is all about skilled manpower there is attrition issues also. Higher fixed cost like lease rentals is another area of challenge specially during off-seasons.
As a finance leader, how do you balance risk management with aggressive growth strategies in a dynamic industry like hospitality?
Balancing risk management with aggressive growth strategies in a dynamic industry like hospitality requires careful consideration of factor like-Data driven analytics and decision making, Risk assessment and mitigation strategies (like diversifying revenue streams, Budgeting exercise etc.)
Strategic Investment (balanced portfolio-mix of high growth and stable projects) and right capital allocation (using tools like NPV and IRR calculations).
Cash flow management is another key area in any business setup but in hospitality it is more critical considering the significant fixed costs e.g. Manpower, Rent etc.
Your LinkedIn post highlights strong growth projections for India’s hospitality sector. What factors do you think will be most crucial in achieving these numbers?
The growth of India’s hospitality sector is driven by economic, social, and infrastructural factors. Key drivers include increasing affluence, urbanization, tourism development, infrastructure development, policy and regulatory support, skilled workforce, technological advancements, sustainability, eco-tourism, marketing and branding, health and wellness tourism, safety and security, and public-private partnerships. Economic growth and rising disposable incomes, government initiatives, cultural and heritage tourism, and medical tourism are key factors in driving growth. Infrastructure development, such as improved transport connectivity and digital infrastructure, is crucial for making tourist destinations more accessible.
Policy and regulatory support, such as ease of doing business and favorable tourism policies, can attract investments in the sector. Investing in hospitality education and training programs, certification programs, and technological advancements can enhance service quality and operational efficiency. Sustainable practices, eco-tourism, and strong branding can differentiate India from other destinations. Safety and hygiene are also essential for building trust and encouraging repeat visits. Public-private partnerships between the government and private sector can drive investments in infrastructure, marketing, and service quality improvements.
Health and wellness tourism is projected to grow rapidly. How should financial leaders in hospitality plan investments to capitalize on this trend?
Financial leaders in the hospitality industry should strategically invest in wellness offerings to capitalize on the growing health and wellness tourism trend. This includes developing specialized wellness offerings, expanding into wellness destinations, enhancing guest personalization, investing in staff training, targeting the right audience, and forming strategic partnerships.
These investments should align with wellness trends, such as mindfulness, holistic health, and personalized nutrition, and align with post-pandemic expectations.
To create unique experiences, wellness leaders should invest in spa facilities, fitness centers, yoga studios, meditation spaces, and wellness-focused dining options. They should also leverage technology to provide personalized experiences for guests. Additionally, they should invest in sustainable and eco-friendly design, offer data-driven insights, and develop wellness-focused loyalty programs.
Financial leaders should also focus on ROI and scalability, testing new wellness offerings on a smaller scale before full implementation, and adapting to post-pandemic trends by ensuring health and safety standards and mental health focus.
The F&B sector within hospitality is growing at 10-12% CAGR. What financial strategies can help brands optimize revenue from this segment?
The Food and Beverage sector in the hospitality industry is experiencing significant growth, and financial leaders can optimize revenue by implementing strategies such as diversifying revenue streams, enhancing customer experience, optimizing menu engineering, leveraging technology and data, strategic pricing, marketing and branding, operational efficiency, partnerships and collaborations, and focusing on health and wellness trends.
To diversify revenue streams, F&B brands should expand offerings, introduce pop-up restaurants and events, and offer catering and delivery services. They should also enhance customer experience by personalizing menus, integrating technology, and investing in restaurant design and ambiance.
Optimizing menu engineering involves analysing profitability, incorporating seasonal and locally sourced ingredients, and upselling premium items. Utilizing technology and data, such as inventory management and predictive analytics, can help reduce waste and improve cost control. Dynamic pricing models, value bundling, and loyalty programs can also be implemented to attract larger groups.
Financial planning and investment should focus on capital allocation, cost control, and revenue forecasting to optimize operational costs and capitalize on the growing demand for diverse and high-quality dining experiences
Looking ahead to 2030, what are the most significant financial shifts you foresee in the hospitality industry, and how should businesses prepare for them?
The hospitality industry is expected to face significant financial shifts in the coming years due to evolving consumer preferences, technological advancements, environmental concerns, and economic factors. Key trends include a greater emphasis on sustainability, the integration of advanced technologies like AI, IoT, and contactless services, dynamic pricing and revenue management, changing consumer preferences, health and safety priorities, the rise of alternative accommodations, global economic influences and volatility, investment in workforce development, increased focus on digital marketing, and regulatory changes.
To prepare for these changes, businesses should adopt greener practices, invest in advanced technologies, and train staff to work alongside new technologies. Additionally, they should focus on personalized marketing strategies, maintain stringent health protocols, and invest in technology for enhanced sanitation.
Additionally, businesses should diversify revenue streams to mitigate risks associated with economic downturns, invest in workforce development, and cultivate a strong corporate culture with opportunities for career advancement and employee well-being. Lastly, businesses should stay informed about potential regulatory changes and develop compliance strategies in advance. By preparing for these changes, hospitality businesses can position themselves for growth and resilience in the coming years.
