Answer to Question #267066 in Management for Meghna

Question

Lemon Tree, a premium chain of hotels across the country has suffered tremendous losses during this pandemic and have hired you as a consultant in order to analyze the same

a. Can you explain Political, Economic and Social forces which have had an impact on the business?

b. Can you also help them apply the contingency approach of Modern approach in order to face the pandemic effectively?

Answer 1

Lemon Tree Hotels is one of the largest hotels based in India. It has been affected by the pandemic.

Political Forces

Political forces that have affected the hotel during the pandemic is the Nationwide lockdown and the limit by the government for hotels not to overcrowd and maintain the social distancing rule.

Economic Forces

Economic forces that have affected the hotel during pandemic is that due to low customer numbers, the benefits of the business have dropped drastically and they have had to retrench some workers which in turn has led to slow services as the number of employees has reduced.

Social Forces

Social forces that have affected the hotel is the fear many people have contracted the virus. Many people have stopped visiting the hotel premises since hotels always have a lot of traffic of people coming from different places which people fear makes the hotels a hotspot for the contraction of the virus.

Contigency Approach to Face the Pandemic

·        Coordinate your response

They should consider setting up a dedicated team that reports the management and take responsibility for assessing and managing the potential impact of the pandemic. The team should have representatives from various departments.

·        Manage the impact on the workforce

Management of the lemon tree hotel should comply with health and safety duties and broader duties of care and good faith owed to workers. Steps to consider, subject to local law requirements, include taking action like monitoring Government and World Health Organization advice and notifying staff of recommendations not to travel to particular areas and of measures to help prevent the spread of the pandemic, introducing self-isolation policies among others.

·        Manage contractual risks

The management can evaluate the potential implications for their customer and supply chain contracts. Review how Covid-19 will affect their ability to perform their contractual obligations (either directly or due to issues in their supply chain) by assessing what rights they might have if the other party is unable to perform its obligation.

·        Manage financial arrangements

Borrower and lenders may need to review finance documentation and related arrangements to assess potential consequences and contingency measures. Some of the considerations can be; Representations – whether the company is able to make the specified representations at the required times.

Undertakings – whether the company can comply with its undertakings.