Gandhi Institute of Technology and Management,

Visakhapatnam, Andhra Pradesh.

Project Title:

Changes in Consumer spending in hotels during Covid-19.

Subject:
Consumer Behaviour
Submitted in partial fulfilment of the requirement of Masters in Business Administration (PG)

Under the Guidance of:

Submitted by:
Dr.Smitha Viswanathan Girija
Team 6 Assistant professor,
Dept. of marketing
Twinkle Poddar (122023603028) GITAM Institute of Management,
Visakhapatnam
N.G.Nithya (122023603019)

Gautam Raj Nekkanti (122023603034)

Udumula Narendra Reddy (122023603009)

Pujari Yasvanth (122023603005)

Jakkamsetti Tarun (122023603024)

N.S.V.Pavan Vijay (122023602051)

OBJECTIVE
  To understand the recent trends in the consumer spending behaviour in India,
amidst COVID-19 pandemic.
 To fill the gap in the academic literature where no research paper as of now focuses
on understanding the behaviour of consumer spending at the time of pandemic.
 To study the awareness and knowledge of consumer towards COVID-19.
 To study price, availability and other problems on the COVID-19, impact on
consumer spending behaviour.
 To analyse the consumer attitude towards the COVID-19, impact on the consumers
spending.

LITERATURE STUDY
The customer conduct is constantly impacted by financial variables like practices, customs,
way of life, business status, pay levels, purchaser spending plan and so forth, in the
exploration expressed that the purchasers altered their outlook for voyaging and are quicker
with the idea of video chat like online course as this lessens their movement and
convenience prerequisites. As COVID-19 pandemic has prompted social removing,
lockdowns, self-confinement and travel limitations and has led to decrease labour force in
every financial area (Nicola, 2020). Approximately 122 million individuals have lost their
positions in India in April, 2020 which has decreased to 11 million in the long stretch of July,
2020 (CMIE, 2020). India's per capita pay is anticipated to diminish by 5.4% to Rs. 1.43 lakh
in 2021 from Rs. 1.52 in 2020 (Business Today, 2020). Along these lines this pandemic has
impacted financial states of shoppers and thusly has impacted purchaser purchasing
conduct.
The COVID-19 pandemic has conveyed the world to a stop with the friendliness, travel and
the travel industry section being the most impacted in view of development restrictions
over the world and across India. In their research papers, shoppers have shown a sharp
reduction in spending towards lodgings and eateries because of social removing standards
and successive lockdown. A review directed on 15 lodging administrators in India showed
that the vast majority of the inns will require over 2 years for their business to get back to
income per accessible room (RevPAR) levels of the year before. The overview also
uncovered that business trip is relied upon to diminish in post pandemic period as
organizations will limit spending on movement (Financial express, 2020). Indian Hotels
Company Limited (IHCL) auxiliary of TATA bunch aggregate had procured income of Rs 144
crores for the quarter finishing June 30, 2020 when contrasted with Rs 1020 crores for
similar time of 2019, along these lines happened drop of 86% in its income for the quarter
finished June 30, 2020 because of COVID-19 (The Economic Times, 2020).Hyatt lodgings
have lay off 1300 representatives worldwide and began deducting pay rates of load up
individuals, the board levels and all workers (NDTV, 2020).Marriott International inns have
begun deducting 20% compensation of their corporate staff, half of senior supervisors of
inns and 30% cut of head of offices pay rates and on a similar line Lemon Tree inns have
begun cutting 50-65% compensation for its authority groups (The Economic Times, 2020).
As the pandemic has impacted customer conduct towards inn industry, in this way inns are
accepting every one of the essential safety measures as given by World Health Organization
and Ministry of Tourism to protect their visitors. Honey-Roses et al.(2020) expressed in their
examination that associations need to reconfigure their guest plans in the public region to
secure and defend their clients wellbeing. The Oberoi gathering of lodgings has presented
number of measures like consistent sanitisation of touch focuses in open regions, seating in
anteroom and eateries has been organized remembering the social separating, temperature
readings of visitors at entrance, guestroom sanitisation after visitors look at and abandoning
spaces for something like 24 hours after the visitors look at (Oberoi Hotels and Resorts,
2020).Taj Hotels has decided to dispose of its rich smorgasbord spread and decrease the
breaking point in restaurants by 50%. Other prudent steps taken are fogging and cleaning
different touch points like clockwork and giving PPE units to guests and staff (Business Line,
2020).Hotel chain Oyo is giving preparing to its 1000 inn accomplices on the standard
working methods, cleanliness and sanitisation, usage of defensive supplies and instruments
and the organization assuming liability to screen the practices through customary reviews to
guarantee its rules are being adhered to (Quartz India, 2020). Well known inn brands like
Marriott and Hilton are moving towards bright light innovation and electrostatic sprayers for
sanitisation (CNBC, 2020).
While the situation seems be to be optimistic a strong recovery in consumer spending once
the COVID-19 virus is under control, the pandemic, like past crises, will leave permanent
scars. This paper aims to determine what it means for consumer behaviour and spending, a
critical component of global economic recovery.
Fear of COVID-19, social distancing measures, and outright closures implemented locally at
various periods in 2020 resulted in a noticeable shift in consumer spending volume and
nature. In 2020, actual personal consumption expenditure (PCE)5 decreased as spending
alternatives dwindled and the epidemic's economic impact slashed people's wallets. Even
working people held back on spending last year as a result of economic and health-related
anxiety. Concern for personal well-being and friends and family members peaked in April
2020 and the fourth quarter of the year, a global study of consumers. 6 In December of
2020, the personal savings rate was 14.2 percent, nearly double what it was in December of
2019.
Canadian consumers plan to spend 20% less on discretionary items in the next four weeks
than they did in the previous four weeks, according to the State of the Consumer Tracker,
which is tracking worldwide consumer sentiment during the epidemic. Over the same time
period, they plan to spend 51% less on travel, 15% less on restaurants and takeout, and 14%
less on entertainment. Consumers, on the other hand, anticipate to spend 29% more on
food and 16% more on internet and mobile services.
Business travel, which has long been a significant source of revenue for the hospitality
industry, will take time to recover as well, with forecasts ranging from the end of 2020 to
two or three years from now. Some business travel, perhaps 5 to 10%, may not return at all
since the company that had paid for it may go out of business. 3 Hospitality businesses
should keep up with business travel trends and alter their business plans accordingly.
METHODOLOGY
The study is descriptive research where both primary & secondary data is used. Primary
data is collected by circulating questionnaire. The questionnaire included four demographic
questions i.e. gender, age, occupation & income. It also included ranking questions & close
ended questions with 5 point Likert scale in some questions. The questionnaire was targeted
at population who travelled during covid & was floated through various social networking
sites & messaging applications. The data is collected by using convenient and random
sampling.

RESULTS AND FINDINGS

Demographics analysis

No. of
Demographic Responden
Variables ts
Gender
Female 26
Male 41
Age
22-35 39
36-50 4
Above 50 1
Below 22 23
Occupation
Self-employed 36
Student 22
Other 9
Income per month
26k-50k 17
51k-75k 9
Above 75 k 5
Below 25,000 36

ANALYSIS
Mode of Transportation
35
30
25
20
15
10
5
0
Bus Car Flight Train

Before pandemic During Pandemic

 The
Changes in ranking priorities while selecting hotel survey
250
revealed
218
207 205 that 49%
200 193
185 182
people
160
150
148
140 preferred
135
122 115 train
100 before
pandemic
50 but this
0 0
behaviour
0 changed
Food Amenities Location Customer Price Contactless Contactless
Service Payment Service due to
safety
Before Pandemic After Pandemic
concern
and people opting for cars increased by 153%.This also shows that people were more
concern about their health. Although there is not much change in the consumption
behaviour of bus and flight as the changes are almost negligible.

Before After
Factors Pandemic Pandemic
Food 1 1
Amenities 4 3
Location 2 2
Customer Service 5 6
Price 3 4
Contactless
Payment - 5
Contactless
Service - 7

This graph deal with customer’s decision making and the priorities they consider for
selecting a hotel. Respondents were asked to rank the given factors (1- most preferred)
while they choose a hotel. In order to draw comparison, the respondents were asked to
rank the factors they preferred before pandemic and then rank their priorities during
pandemic. Reverse weightage is used to arrive to the results. Respondents were asked to
rank five factors that is food, amenities, location, customer service and price was g
Note: Contactless service & contactless payment emerged during pandemic and hence,
these were not included in ranking option before pandemic.
The table helps us to understand the shifts in the priorities of consumers. Though food &
location maintained the top priority in both the periods, amenities replaced price during
pandemic. That means amenities became more important that, includes emergency doctor,
hygiene, sanitised rooms, vaccinated staffs, followed by price. Contactless payment which
was not a popular option before pandemic suddenly emerged as an important factor in
customer’s decision making and gained 5 th rank. Customer service was sixth important
factor followed by contactless service.

Price Per night per room

30

25

20

15

10

0
500-1000 1000-2000 2000-3000 3001-4000 4000 and above

Before pandemic During Pandemic

In order to
Chart Title understand the
changes in
Above 75 k consumer
spending pattern,
51k-75k respondents were
asked the price
26k-50k
they paid for per
room per night for
a room. It seems
Below 25,000
to be quite
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% obvious from the
graph that
Decrease Increase No changes
consumers started
opting for next
best category of hotel than what they choose earlier. The maximum increase of 2.7 times
was seen for the hotels with tariffs 4000 and above. This can be because consumers believe
and expect that these hotels maintain hygiene and other covid protocols like sanitized
rooms. The maximum fall of 33% was seen in the rooms ranging from 500-1000. This again
can be because of safety concerns.
The above graph gives a detail view of the mindset of consumers.
Respondents were asked to mention the changes in price they have observed. The data
collected was then analysed on the basis of their income per month. Around 67% of the
respondents with income below 25k which constitutes 35% of total respondents stated that
the room tariff has increased as compared to before pandemic period. Only 11% of the total
respondents feel that the price has decreased. While 21% and 67% of total respondents.

Stated that there are no changes in the price. 45 respondents voted that price has increased
after pandemic.
This graph stated the factors that are going to sustain over a long period of time in
consumer’s decision making.87% of respondents voted that hygiene and sanitized rooms
are the factors that they are going to look for every time they select a hotel. Out of the
given five factors, more than 50% of respondents have accepted these factors as most
important criteria while selecting a hotel.
The below graphs show the ratings of customers on a five point Likert scale. The questions
deal with their experience in the hotel when they stayed during Covid-19.Income per month
is used as another factor to help analyse their spending patterns.

Food Rating
16
14
12
10
8
6
4
2
0
1 2 3 4 5

Below 25,000 26k-50k 51k-75k Above 75 k

 Hygiene
18
16
14
12
10
8
6
4
2
0
1 2 3 4 5

Below 25,000 26k-50k 51k-75k Above 75 k

Chart Title
18
16
14
12
10
8
6
4
2
0
1 2 3 4 5

Below 25,000 26k-50k 51k-75k Above 75 k

Most of the people with income above 75K rated the food as satisfied and highly satisfied.
People with 51k to 75k income were not very much satisfied or dissatisfied with the food in
restaurants in hotel. The good part is no one had an experience that can be stated as highly
dissatisfied.
People with high income of above 75k are most satisfied with the hygiene protocols

followed in the hotel while the group below the highest income was just satisfied with the
hygiene maintained. Earners with income below 25k were neither satisfied nor dissatisfied
with the hygiene followed.
 Covid Protocol
20
18
16
14
12
10
8
6
4
2
0
1 2 3 4 5

Below 25,000 26k-50k 51k-75k Above 75 k

Group with 26k – 50k income is somehow satisfied with the covid protocals followed by the
hotel but around 26% percent of respondents whose income are also more than 75k are
most satisfied. Covid protocals include social distancing, sanitization, contactless service
among others.

Overall experience
14

12

10

0
1 2 3 4 5

Below 25,000 26k-50k 51k-75k Above 75 k

When asked for overall satisfaction with the services they received in hotel, around 48% of
the above 75k earners and 41% percent of below 25k earners rated satisfied while 10 out of
18 respondents earning 51k to 75k were highly satisfied with the service.
CONCLUSIONS
By analysing the survey results we determined that there is a difference in consumer
spending behaviour in hotels before and during the pandemic. Before the epidemic, people
chose public transportation, whereas, during the pandemic people preferred personal
vehicles. People's top priorities when choosing a hotel during a pandemic are a sanitary
atmosphere and contactless service.
People used to travel for vacations before the pandemic, but now they only travel if it is
really necessary, such as for business or academic purposes. During the pandemic, the
number of days spent in the hotel was also reduced.
During the pandemic, hotels' COVID-19 protocol, hygiene standards, and general experience
by the public in hotels were all granted a near-five-star rating. During the pandemic, the
hotel sector raised charges to maintain COVID-19 standards, hygiene, sanitation, and a few
other services essential for client safety.

LIMITATIONS OF STUDY

 The study was carried out in India during Nov – Dec 2021 and revealed the
sentiments of Indian consumers who travelled.
 But, the size of the sample is relatively small and the results we get can’t be
generalized throughout the country.
 Due to lockdown revenue generated is lesser than before and this also impacts on
spending.