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Deep Kalra, Founder, MakeMyTrip. com shared how hotel inventories will increasingly find their market on the Internet: the inevitable way to go. Turn to page 6
It was Calypso time yesterday: the team of JW put together a theme around the tea-break. Staff did the Bravo dance celebrating the victory of the West Indies team at the recent T20 World Cup
Focused HOSI highlights challenges in operations, HICSA kickstarts today
It was an evenful HOSI yesterday. Some 200 general managers must have walked through the different sessions. It is HICSA time today, with CEOs from Indian and foreign hotel companies sharing their perspectives.
HICSA is right here. The annual assembly keeps growing in importance with senior industry looking forward to sharing learning experiences on critical issues, besides finding it a great forum for networking. Two days of brainstorming will do good in taking the industry forward and also the country's tourism potential. Is the cycle of growth assuming critical mass to show itself on balance sheets of hotels? Is the golden period almost over and become history? Foreign arrivals, it is said, are somewhat down for leisure, and how much resilience will the domestic market show up? Over the next two
days, some of the answers will get tangible answers. Yesterday's deliberations seemed to reflect challenges and some key speakers including Deep Kalra, Roshan Abbas and Kapil Kaul, among other, emphasised some learning ahead to be able to take advantage and leverage economic and social trends. Today's line up is formidable. The sessions, as in the past, promise interesting thought. The Hotel of the Year awards will be much awaited segment, as we gather the interest has only increased year on year, with the award getting more and more coveted.
Last night, it was ITC Maurya hosting the General Managers and delegates at HOSI. We bring you a few images.
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HOSI recognises the Big Winners
As HVS’s Manav Thadani repeatedly echoed, it was a tough competition but ultimately there could be only one winner. In four categories, amid big suspense, the awardees were announced, reminiscent of the Oscars and the Filmfare awards in their industries.
Luxury Hotels Shridhar Balakrishnan Nair, The Leela Goa
Upper Upscale & Upscale Saurabh Bakshi, Sheraton Grand Bengaluru Hotel at Brigade Gateway
Upper Mid Market & Mid Market Hotel Segment Mohinder Pal Singh, Lemon Tree Premier, Ulsoor Lake, Bengaluru
Budget & Economy Hotel Category Ravi Khubchandani, Ibis Gurgaon
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Hotel industry should keep an eye on air infrastructure development: Kapil Kaul Lack of airport infrastructure momentum at some of the major destinations in the country could be bad news for the hospitality industry. By ritwik sinha
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rima facie, aviation business registering a galloping growth trajectory is the good news for the branded or organised hospitality segment. Among other things, this obviously also entails more guests for the hotel operators. The present sentiment in the Indian aviation business simply reflects a buoyant mood – with over 20 percent growth in the domestic passenger segment and a similar pattern of growth in the international segment, Indian aviation is the fastest growing market in the world today, even ahead of China. Of course, this is much in line with the overall bullish sentiments which have
come back to the global aviation business after a long time thanks to the decline in oil prices. The icing on the cake is: the leaps and bounds growth pattern is likely to continue in the Indian aviation business in the near to medium run. Does it mean that the hospitality industry will be receiving a more robust supply support from the aviation business in the coming years? Kapil Kaul, CEO (South Asia) of CAPA touched upon this critical point in his presentation yesterday at HOSI and his detailed analysis did not only carry positive forecast especially in a medium term perspective. Instead, Kaul strongly suggested the hospitality industry to keep an eye on air infrastructure development in specific
☛ Airports like Chennai, Pune, Jaipur and Ahmedabad will reach to a saturation point in the coming years. ☛ Delhi-Mumbai and DelhiBengaluru are the most popular city pairs emerging as the golden triangle of the Indian skies. ☛ While Delhi and Bengaluru airports have adequate capacity for the future, capacity is going to become a major issue at Mumbai airport soon.
cities while taking a call on their future moves. “I see so many hotels coming up in Chennai and Pune. But the airports at these cities are nearing their saturation point. Same is the case with other airports like Ahmedabad and Jaipur. Since no fresh move is visible to augment the capacity in these buzzing centers, hoteliers must take into the consideration the emerging challenges while planning to make new moves in these cities,” Kaul emphasised. CAPA South Asia chief also shared the details of the city pairs which are fuelling the growth in the Indian aviation business, a pointer for
the hoteliers to understand which way the wind is blowing in terms of traffic generation and footfalls. According to Kaul, about 15 city pairs today account for nearly 41 percent of the domestic traffic with Delhi-Mumbai (over 7 percent) and Bangalore- Delhi (over 4 percent) being the most popular routes. “Delhi, Mumbai and Bangalore are like the golden triangle of Indian aviation space today. While Delhi and Bangalore will have the capacity to absorb the projected augmentation in the traffic volume in the coming years, for Mumbai it looks doubtful due to space constraint,” he pointed out.
Hotels should shift their focus to customers’ time than his wallet The growing distance between the hotel units and their new-age customers does not bode well and the hospitality industry needs to get into a fire-fighting mode on an urgent basis. By ritwik sinha
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hen popular media personality Roshan Abbas took to stage at HOSI convention yesterday, in his usual friendly style (filled with wit and humour), he did not miss the opportunity in pointing out at some of the major shortcomings of the hospitality business. Drawbacks which are quite obvious if analysed minutely but usually not deliberated in the open. “There was a sense of respect when we used to refer the star grading system for hotels till a couple of decades back. Does that star system has any relevance now?,” Abbas posed the moot question just at the beginning of his presentation which was interestingly titled as, “Dude, Where’s Your Audi-
ence?” The title itself underlined the growing distance between the hospitality industry and their customers and Abbas pulled no punches in repeatedly highlighting
☛ The relevance of star grading system of hotel units, earlier defined by their differential deliverables, is questionable today ☛ Customers are increasingly showing preference for experiences outside the hotels ☛ To respond to the aspirations of the new-age customers, hotels will need to become digital marketers, culture curators, storytellers and savvy Instagrammers
this trend during the course of his presentation. “Time and the demand patterns have dramatically changed. You are now catering to the customers who prefer to tweet before they eat. The new age customer is seeking experiences outside your hotel. He is no longer interested in décor. You need to consider this point seriously. You are living in a walled space which is your bastion and you don’t want to come out of it,” Abbas asserted while underlining that today’s customer has a more powerful voice than ever before. “If the customer is unhappy with you today, he will not yell in the lobby. He would rather post online and it could impact your reputation,” he pointed out. Abbas further highlighted the growing disinterest of the customers in making use of non-rooms
assets of the hotel units. “Your grand ballrooms are no longer big enough for the large-scale, experiential events. Your food offerings do not tickle their palette. The equation with your customers no longer entails getting a greater share of their wallet. You should rather eye for greater share of their time. Hotel units which have become a transaction should loosen themselves decisively and become a destination,” Abbas advised. The popular media personality cited a host of examples from the global arena which underline the innovations which hospitality players are indulging in to interestingly engage their new age customers. For instance, a noted hotel unit in Indonesia is keeping its customers engaged by taking every order on twitter during their stay. Similarly, noted luxury hotel chain Loews
Meanwhile, Kaul also suggested the gathering of hotel GMs to keep a tab on aviation trends for their own benefit. “Currently, there is inadequate understanding of aviation business across industry level,” he said. He also advised the two industry streams to work more closely to derive mutual benefits. “There could be collaboration with airlines which will derive increased revenue by way of last minute inventory distribution or joint holiday package sales. Working with airline distribution teams can create new customer segments for the hospitality industry,” he recommended.
Hotels ask their customers to send the memorable pictures of their stay and the best of them are used for the campaigns of the hotel in the future. “These are the ways to engage your customers. You have to transform yourself as digital Van Gogh and your destination should be Instagram where you can also display short, interesting videos. To bridge the gaps in your connect with customers, you need to become digital marketers, culture curators, storytellers, savvy Instagrammers and engage social influencers,” Abbas concluded. And considering the thunderous applause which he received, Roshan Abbas’ plain-speaking certainly managed to strike a chord with the gathering.
editor:
Navin Berry navin@tourismfirst.org contributing editor: ritwik sinha ritwik@tourismfirst.org features editor: Priyaanka Berry priyaanka@tourismfirst.org senior writer: Shashank Shekhar shashank@tourismfirst.org
Tourismfirst is owned, published and printed by Navin Berry and printed at Anupam Art Printers. B-52, Naraina Phase II, New Delhi. It is published from 36-37, 3rd Floor, Indra Palace, H-Block, Connaught Place, New Delhi – 110 001. Tel: 011-43784444. Total pages 32
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Driven by their appetite for innovation, standalone restaurants will lead F&B segment Technology and convenience will drive the F&B segment in the times ahead. Given that stand-alone restaurants have demonstrated a stronger appetite for innovation, they are most likely to carry forward the segment. By shashank shekhar
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&B industry is a dynamic entity that has constantly evolved, shaped by the changing demands of consumers. Taking a stock of the future of F&B in the coming months and years, Zorawar Kalra, Founder and Managing Director, Massive Restaurants said that fine-casual was going to be the next big trend in the segment. “Given that today’s consumer is driven by a vast array of information through technological input, fine-casual will be the megatrend. I will go as far as calling it a phenomenon,” he said. Noting that
son for this trend is the abundance of choice that consumers have in their midst. Abundance of choices makes you decide. With the power of choices at hand, people have the instinctive luxury to out-rightly reject you,” he said. Sharing that for service providers to be able to succeed in a very competitive market space, suppliers must be able to have clarity about their goals in the long-term. “The issue will come down to who has the ability to connect to the audience,” he substantiated. Rohit Dasgupta, Senior Vice President, EasyDiner elaborated how he was able to make a dent
☛ The reason why hotel restaurants may find tough to compete with stand-alone restaurants is that they do not have such a profound focus on marketing their product healthy eating habit that was percolating in the masses was fuelling healthy and casual dining, he said “people have increasingly begun consuming more organic food. Another fascinating development is the focus on regional cuisines which is picking up at a pulsating rate.” Rahul Khanna, Owner and Co-Founder, Azure Hospitality explained why there was sudden push towards casual and finedining. He attributed the trend to changes that had come about in the past 2-3 years. “The biggest rea-
in the market. “We started in 2012. We started as a website which powered table reservations,” he revealed. Giving an insight into his company’s growth, he shared with the gathering that they survived because they had a functional phone-line that drove as much as eighty percent of their entire bookings. “If you look at the trend now, there is a complete reversal in the last four years. Today, almost 80 to 90 percent of our bookings are driven from the online space. It is mostly because people want to discover new products and services;
it is also to do with the fact there is an instant gratification,” he shared. Rohit Dasgupta, Senior Vice President, EazyDiner noted that there had been a drastic shift in the way business was being approached by service providers. “Consumers are shifting from offline to online. Earlier, there was inhibition to go to a five star restaurant. Portal like ours is making people try new things in spending the same amount of money.” he explained. Rahul Khanna, speaking on the issue, said that he did not look at it as a high-street mall vs. a hotel thing. “Hotels are beginning to realize that they are good at providing good accommodation. As the trend continues, high-street food will come to hotels,” he added. Zorawar Kalra concurred with Rahul Khanna stating that the reason why hotels were more into
rooms was to do with plain economics. “Hotels will focus more on rooms and it is a given when over 80 percent of your entire revenue is generated through rooms,” he explained. He further argued that there was more innovation now in stand-alone segment. “It is unfolding in India, as we speak. This change will have a profound impact on the industry and works well for consumers because it makes eating-out more affordable,” he said. Looking ahead Rohit opined that hotels needed to figure out a way to reach out to people. As far as standalone hotels went, their entire focus was on marketing. “The reason why hotel restaurants may find tough to compete with stand-alone restaurants is that they do not have such a profound focus on marketing their product,” he reasoned. Adding another dimension to
the argument, Vivek Kapoor, CoFounder, Dine-out added that being bereft a larger budget, stand-alone restaurants were more open to innovation and working on joint platforms. “It helps them in marketing their products better,” he added. Rahul Khanna noted that it was up to the operator to cherry pick amongst a number of platforms to choose from. “Ideally, a restaurant must work with someone who understands the market and has a long-term vision about heading forward,” Rahul said. Zorawar concluded by arguing that food-tech was a fabulous space and bound to grow. “The reason for its success will be convenience. Convenience will rule the market. No matter what happens, a consumer will always give priority to convenience, and that is why I believe food-tech is the next big thing in the F&B space,” he noted.
General Managers need to be Peoples’ Manager Higher employee satisfaction tends to reflect in higher RPI which leads to higher GOP and growth making hotel GMs good asset managers as well. By Shayan Mallick
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he fourth edition of Hotel Operations Summit India (HOSI) ended with an engrossing panel discussion on ‘When Would GMs Become Good Asset Managers?’ The session, moderated by industry veteran Kapil Chopra, President, The Oberoi Group, brought together industry stakeholders representing some of the top names, both in terms of individual and the company that they represented. Amidst a volley of oft probing and oft testing questions the discussion focused on assessing the various
Starwood Hotels and Resorts; Ranjit Batra, President Hospitality, Panchshil Realty; Sanjeev Pahwa, Sr. Vice President – Operations, South Asia, Carlson Rezidor Hotel Group and Sunjae Sharma, General Manager, Grand Hyatt Mumbai & Area Director – West India, Hyatt Hotels Corporation. The first question that Chopra tested his panellist with was, What’s very important, guest satisfaction, employee satisfaction or profit? What comes first for a general manager? Sharma says its people first. Whether it is the stakeholder, owner, guests or the employee.
☛ Whether it is the stakeholder, owner, guests or the employee. If you have them together and you deliver in a way that they can do their best, profits will follow, Sunjae Sharma. facets of hotel operations, asset management, corporate value vis-à-vis profitability as well as challenges that are faced. The panellist on the session included Anil Chadha, Area Manager – South, ITC Hotels & General Manager, ITC Grand Chola Chennai; Anuraag Bhatnagar, Area General Mananger – India,
If you have them together and you deliver in a way that they can do their best, profits will follow. Agreeing with Sharma, Pahwa says that if the employees are happy the guests are happy; they are going to be looked after. He however also added that ‘profit’ remains number one priority stating, “We are working for somebody else. We need
to first see how we can deliver the profit. And for that keep in mind the first person to deliver that profit is your staff and employees.” Chadha while sharing some useful details on his property that he manages informed that ITC Grand Chola, despite being 600 keys property in a city like Chennai, was able to close last year with 75 per cent occupancy thanks in large part to the wonderful team that he runs his property with. He also pointed to the need to understand long term
approach in case of large inventory assets that company invest in. Bhatnagar said that its people who create brand, its people who deliver guest satisfaction. He also said that they have seen that hotels with higher employee satisfaction also tend to have higher RPI which leads to higher GOP and growth. Indicating that job of hotel management should better be left to the experts, Batra, who currently asset manage portfolio of five properties, says that we want the best
people to manage our hotels. Batra acknowledged that they are willing to further diversify their brand portfolio and are considering brands like Lemon Tree they have hitherto not dealt with. Batra said that there are properties and locations where a domestic player can do much more justice whereas in markets like Pune which are driven by large RFP based accounts more recognised international brands can be preferred.
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Talent acquisition and management is the key for qualitative growth, says leaders panel
t the leaders’ panel session at the Hoshi convention, the discussion took off on a confident note in terms of size and scale of the noted hospitality groups in the near to medium run in the South Asian market, particularly India. For instance, InterContinental (with 5000 hotels globally) has 26 hotels in South-West Asia currently and 42 units are in the pipeline. Carlson Rezidor with 76 units in India is further shaping another 43 units which are at different levels of execution. Marriott has 52 properties in the pipeline in South Asia as against the present inventory of 32, Hyatt is opening three more hotels in India this year with 24 units in place and The Leela Palaces is looking forward to the opening of four more units in the country in not so distant future. The real issue for the industry leaders, as the deliberations highlighted, is ensuring the qualitative growth. Particularly in terms of acquiring the managing the talent
Shantha de Silva Head- South West Asia, InterContinental Hotels Group
Today my GM has to be the guardian of my brand, a sound asset manager as well a leader of the people.
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Kurt Straub VP (Operations), Hyatt Hotels Corporation
It is exciting to have young people at the leadership position. They bring new energy and approach to the operational and management issues. But you have to ensure proper guidance to them and they can go off very quickly. concern quite often. We have embarked on our own home-grown strategy wherein we are mostly preparing our unit leaders from within,” said Raj Rana, CEO- South Asia, Carlson Rezidor Hotel Group. According to Shantha de Silva, Head- South West Asia, InterContinental Hotels Group, the company
☛ The growth in the hospitality business has outpaced the growth in the talent pool. ☛ Today GMs have a host of new set of responsibilities including communicating with the clients on the digital platforms. ☛ GMs now are relatively younger than what the trend has been in the past. pool. “This business is very people driven. But it seems that the sector has grown faster than the talent pool,” Achin Khanna, MD (Consulting and Valuation- South Asia), HVS said in his opening remarks. The panellists had a uniform voice on this issue saying that it is indeed taking a quite a lot from them to respond to the challenge of finding right kind of manpower when the quantitative growth is unfolding at a rapid pace. “Our talent pipeline is clearly not as robust as our unit pipeline. It does become a major
is resorting to align with the noted academic institutions (also offering hotel management courses) to keep their ranks in the fine fettle. Neeraj Govil, Market VP- South Asia, Marriott International maintained that the company’s core philosophy of adequate attention to the employees is helping us in dealing with the manpower dynamics in the hospitality industry. “We believe in the philosophy that if your employees are happy, your guests will be happy. And if your guests will be happy, they will come back
Achin Khanna MD (Consulting and valuation south asia), hvs
This business is very people driven. But it seems that the sector has grown faster than the talent pool.
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Raj Rana CEO- South Asia, Carlson Rezidor Hotel Group
Our talent pipeline is clearly not as robust as our unit pipeline. It does become a major concern quite often. We have embarked on our own home-grown strategy wherein we are mostly preparing our unit leaders from within.
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Rajeev Kaul President, The Leela Hotels
GMs should try and create value. Your tenure will be valued long after you are gone. So try to create something which can be endured.
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to you. We do many things not only to attract the right talent but also in maintaining them by ensuring their proper career growth within the company. For our manpower management practices, we have made it to “Best Places to Work” list on several occasions. Right
now, we are also focusing on getting more women employees and encouraging them to make it to the leadership rank,” he informed. According to Rajeev Kaul, President, The Leela Hotels, the luxury major has its own mechanism to deal with the manpower issues. “The most exciting aspect of our man management exercise is that the Leela offers a greater opportunity for everyone to contribute to the culture of the company. We believe in realising the abilities of others and putting them on a fast-track growth,” he said. With quantitative growth being the most defining trend of the day, a critical change has crept in vis-à-vis the experience level of the hotel unit heads. “Earlier managers in their late 40s or early 50s used to become the GMs. But the new lot of GMs are much younger,” pointed out Achit Khanna. The moot point is: with lesser experience, can the new lot ensure high-standard management quality? “It is exciting to have young people at the leadership position. They bring new energy and approach to the operational and management issues. But you have to ensure proper guidance to them and they can go off very quickly,” responded Kurt Straub, VP (Operations), Hyatt Hotels Corporation. The session also highlighted the growing criticality of the GMs role in the fast changing business environment. “Today my GM has to be
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Neeraj Govil Market VP- South Asia, Marriott International
The GM has to sustain our culture and keep it alive and kicking. They also need to understand the viewpoint of the owners and in the age of the growing might of the social media platforms, he is now also entrusted with the responsibility of communicating with the clients on the digital platforms.
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the guardian of my brand, a sound asset manager as well a leader of the people,” Shantha Dee Silva underlined. According to Neeraj Govil, GM’s role is increasingly becoming challenging. “The GM has to sustain our culture and keep it alive and kicking. They also need to understand the viewpoint of the owners and in the age of the growing might of the social media platforms, he is now also entrusted with the responsibility of communicating with the clients on the digital platforms.” Raj Rana further emphasised the growing importance of the GMs by saying, “A great hotel in a great location may not perform well if it is run by an average GM,” he remarked. “GMs should try and create value. Your tenure will be valued long after you are gone. So try to create something which can be endured,” added Rajeev Kaul.
Raj Rana
Neeraj Govil
Rajeev Kaul
Achin Khanna
Shantha de Silva
Kurt Straub
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Time for the ‘raise’: Hotel industry progressing towards the next uptrend
By Shayan Mallick
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otel business is cyclical in nature. There is an up-cycle and there is a down-cycle. So are we progressing towards the next up-cycle? According to Manav Thadani, Chairman – Asia Pacific, HVS, “The answer is yes”. Are we all geared for it? He says “we are
rooms coming in to add up to existing inventory. “If that’s the case guys the only thing you need to worry about is how do I do a better job of yield management,” Thadani said while addressing a gathering of about 190 odd General Managers from across the country at the fourth edition of Hotel Operation Summit India (HOSI) here at JW Marriott in New Delhi yesterday.
When Bombay does well, India does well. India follows Bombay very closely. And I think if you (General Managers) are not able to do that then maybe some of you should be leaving the hotel industry because I see no reason why at 73-74 per cent occupancy you are not pushing the rates up.
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☛ I think if you (General Managers) are not able to do that then maybe some of you should be leaving the hotel industry because I see no reason why at 73-74 per cent occupancy you are not pushing the rates up not.” “Clearly there is an uptrend that is coming; the question is as General Manager, how are we going to take advantage of it?”, he questioned. Hotel rooms in the organised sector grew from about 25,000 rooms in 2000-01 to about 122,000 by 2015-16. This number is expected to be about 146,500 by 2019-20. “What is coming around right now is only about 20,000-25,000 more rooms in the next four to five years and for a country like India that is a very small number. That’s why most of us are very positive about what is going to happen,” he said while informing that the last one year has already seen occupancy being pushed up by four per cent. Most of the key Indian markets (cities) have less than a thousand
“If you compare with cities in APAC, we are right at the bottom. Forget about Shanghai, Tokyo, Beijing. We are competing with the Jakartas and the Balis. We can’t even say we have got too much of supply coming in,” he reasoned. Further drawing attention to macro level growth trends, Thadani said that it is important to understand that the growth rate is going to continue at around eight per cent. Demand on the other hand has been growing in double digit. We have a settled government. We have a Prime Minister who is going out there and speaking globally and there is definitely lot of interest in India. And there is a lot of business traveller coming in. So is the industry capitalising
Clearly there is an uptrend that is coming; the question is as General Manager, how are we going to take advantage of it?
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Manav Thadani, Chairman – Asia Pacific, HVS
on emerging opportunity to boost yield? “Look at the Ahmedabad market. Last year we had two mega events in January and February. In 2016 you did not have these events. Despite that the occupancy went up by two to three points. But what did you do to your rates? You allowed your rates to slip by 30 per cent,” Thadani rued. Hailing Mumbai as the pulse of Indian hospitality, Thadani suggested that hotels in Mumbai suitable positioned to boost rates by 15 to 20 per cent over the next two years. “When Bombay does well, India does well. India follows Bombay very closely. And I think if you (General Managers) are not able to do that then maybe some
of you should be leaving the hotel industry because I see no reason why at 73-74 per cent occupancy you are not pushing the rates up,” said an uncensored Thadani thinly warning the managers against any complacency while emphasising its time industry gets a raise in rates. While opening his address, Thadani gave an insightful rendition of major events and trends globally and in India that has helped shape the hotel industry and hotel business in the last 20 odd years; since the 1990s when the Indian hotel industry passed through a long period of rough patch that continued until the early 2000s and how in the later
years hotels began to diversify their revenue streams, like developing F&B or MICE appeal, and remain profitable. Around 2002-03 was the time when domestic travel started getting traction through what were potential outbound Indian travellers who decided to explore their own backyard in the wake of SARS and Iraq War that affected travel across the globe. 2003-2008 was a period of robust growth for Indian hotels as both inbound and domestic travel recorded strong growth. Hotel inventory increased rapidly during this period with several big names announcing massive hotel development plans. However, many of these plans were eventually shelved following another cycle of downturn that followed soon after in the wake of financial crash and Mumbai attacks of 2007.
24 % hotel booking through online and the number galloping, says Deep Kalra Discounting helps pie become bigger, attract large number of first-time buyer online
By Shayan mallick
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he online penetration in India is close to 300 million people. If you look at mobile, the number is 236 million, which is about half a billion people by next year, a staggering number indeed. While sharing these impressive numbers, Deep Kalra, Chairman and Group CEO, MakeMyTrip.com, said, “The average consumer just needs trust to be made once. We are a living proof of that. We didn’t launch in India prior to 2005 because people weren’t ready to buy online. IRCTC gave Indian the
looking at how we can grow our business whether it is through App or online.” Kalra was speaking at HVS’ leading industry event HOSI (Hotel Operations Summit India) on ‘The Changing Nature of Online Hotel Bookings’ yesterday here. Of course for the business to grow the customer needs to be rightly understood. Kalra says that the customer has a very complex decision making process when it comes to booking a hotel, particularly when it is for leisure. If it is for business, it’s pretty one-dimensional. You know where you want to be. ‘Inspiration’, he pointed plays a
☛ The average consumer just needs trust to be made once. We are a living proof of that. We didn’t launch in India prior to 2005 because people weren’t ready to buy online. IRCTC gave Indian the confidence to buy online. And that has changed everything because people realised that it works confidence to buy online. And that has changed everything because people realised that it works.” Today 63 per cent of the MMYT traffic comes through Mobile App and not online at all. Also 63 per cent of the bookings now come through Mobile App. “We are
key role and that doesn’t anymore come from traditional sources but platforms like Instagram and Facebook and pictures that our friends are sharing or even our kids’ friends. Then starts the research through mediums like Tripadvisors, HolidayIQ or OTAs like MakeMyTrip
We are looking at how we can grow our business whether it is through App or online... They (discount) open the market. The pie becomes bigger and grows very fast. If it wasn’t for this crazy discount many-many people will never buy online.
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Deep Kalra, Chairman and Group CEO, MakeMyTrip.com
which is closely followed by hotels search. He also pointed that a hotel site has a better chance of booking conversion than an OTA. What are the online book drivers and why is online growing so fast suddenly? Kalra says that that when MMYT was launched in 2005, for the first two-three years, most airlines worked with us and most travel agents did not like us and they said this is never going to happen. But air (booking) moved very-very fast. Air action today is more than 52 per cent penetrated
which is more than 52 per cent of domestic air ticket in India bought online. Of which about 31 per cent is with OTAs and the balance 20 per cent is with suppliers. However with hotels this number at the moment is much lower. Kalra, however, pointed that this number has been galloping and moving very fast. Shedding light on Indian hotel booking landscape and how that has moved online, Kalra, while sharing a PhocusWright study, informed that three-fourth of the
booking is still offline and 24 per cent has moved online. However he pointed that OTA’s share has moved from seven per cent three years ago to 17 per cent today. He says that this online growth trend will continue. He also pointed to some discrimination by hotels for the customer booked through OTAs and not directly. Although terming discounting ‘crazy’, Kalra says that discount plays a very important role. “They open the market. The pie becomes bigger and grows very fast. If it wasn’t for this crazy discount many-many people will never buy online,” he said. He also pointed at the millennial impact who he said are two and half times more adoptive to technology. This generation is thinking very differently but more importantly when it comes to travel over 50 per cent are taking four or more trip every year and 40 per cent of India falls under this population.
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Adjusting to the changing business dynamics, Menon shares his five mantra with GMs By RITWIK SINHA
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rom the perspective of the hospitality industry, the changes happening around are too fast and swift often resulting in complex situations. This was the key message delivered by Rajeev Menon, Chief Operating Officer – Asia Pacific (excluding Greater China), Marriott International when he addressed the gathering of around 150 general managers in the first session at Hoshi Convention. “This is one such business where you can be thrown at the dead end of the pool quite often,” Menon emphasised. “A staggering
When it comes to traits, every GM must have the ability to listen, should treat people with respect, communicate with every concerned stakeholder in the operational loop effectively, have a clear vision of how the future is going to unfold, and ensure that every success is attributed to the team. The last bit is very important to keep the morale of the team high.
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90 percent of online users now trust peer recommendations. It wasn’t the case 10-15 years back. This is a huge change,” Menon added while highlighting the key challenges which the new market dynamics have brought to the fore particularly for the General Managers (GMs) since they ultimately drive the show for the independent units. According to Menon, a general manager today has to wear several hats and that entails balancing exercise at several levels. “Today’s GM has several roles to play. He has to be an exceptional financial guy and communicate at different levels including with bankers who do not understand how hotel industry works. GMs have to be great leaders not only in terms of the management of the property but also in profit contribution,” Menon said. Establishing the key challenges which GMs have to encounter on a
broader basis, Menon also strongly advocated a methodical approach which needs to be adopted by the custodians of the brands and the properties to combat the challenges which a fast-changing market condition can create. And here his suggestive tone comprised a five mantra formula – both in terms of traits and the responsive mindset. “When it comes to traits, every GM must have the ability to listen, should treat people with respect, communicate with every concerned stakeholder in the operational loop effectively, have a clear vision of how the future is going to unfold, and ensure that every success is attributed to the team. The last bit is very important to keep the morale of the team high,” explained Menon. The five mantra narrated on the mindset front had these constituents – action mind-set, analytical mind-set, collaborative mind-set, worldly or contextual mind-set and reflective mind-set. “You have to be agile at the mental level to respond to any situation, have the ability to analyse business trends – present and the future possibilities, a ready mind to strike right kind of balance with your partners in the business and easily grasp the trends unfolding elsewhere in the business,” Menon explained while advising that all success stories should not be blindly emulated. “What has worked in Australia may not work in India. The local realities have to be understood,” warned Menon. Taking his argument further, Menon further emphasised the need for the GMs to think in terms of contributing to the transformational process of the organisation which is the case with most of the hospitality groups today. “Transformation process in the hospitality business broadly comprise eight steps. These include: establishing a sense of urgency, creating a guiding coalition, developing a change vision, communicating the vision for buy-in, empower broad-based vision, generate short terms wins, a never give up attitude and incorporating changes into the culture. The unit heads must be aware of these steps,” he elaborated.
Marketing Aerocity
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hink of the fruits of working together! We met Andrew Page, general manager, JW, venue of this year’s HICSA. What’s new, we wanted to know? Three Aerocity hotels, JW, Andaaz and Pullman, are later this month heading to Imex to market Aerocity as a convention venue. What about the others? “We wrote to all the constituents, had a meeting or two, but unfortunately, only three properties have come forward with the money. We have a stand within the India pavilion, and we have registed the brand, and created a website for Delhi”s Aerocity,” said Andrew. Are they Andrew Page, General Manager, JW Marriott Aerocity missing the convention centre within the complex, as this has failed to take off? Yes, but as it takes off, as and when, there is no stopping the work on hand. The first quarter this year has been good, and the coming summer looks its usual stuff, with business low and hotels vying with one another for it. A good start to our idea of a marketing vehicle for Aerocity, and for the need for the hotels to come together for their larger good. If the three partner hotels are among the larger stakeholders in Aerocity, future business should and will benefit the entire complex. We hope others too will come on board!
Performance is the foundation. You have to be known by the results you deliver. Image is all about how others sees you. It also includes the kind of body language which you carry. And exposure is critical in the sense that you also have to highlight your success. Here how you engage your mentors, bosses and champions become critical.
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Rajeev Menon, Chief Operating Officer - Asia Pacific (excluding Greater China), Marriott International
Menon in his speech also strongly recommended the hotel groups or units to strictly maintain balance scorecards, something which Marriott is quite known for. “Such balance scorecards are important because what gets measured, gets done,” he underlined. A performance measuring tool of this
kind, as per his suggestion, should contain metrics like market share (as against the peers), profit contribution, food & beverages revenue, guest satisfaction scores, associate satisfaction scores and owners’ satisfaction scores. Menon further batted for a dedicated focus on PIE (Performance,
Image and Exposure) formula which he believed is critical for the general manager level officials in today’s dramatically changing business environment. “Performance is the foundation. You have to be known by the results you deliver. Image is all about how others sees you. It also includes the kind of body language which you carry. And exposure is critical in the sense that you also have to highlight your success. Here how you engage your mentors, bosses and champions become critical,” advised he.
Guest Column
Homestay units have begun finding roots in India By Hari Nair Founder & CEO, Holiday IQ
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omestays, an alternative accommodation segment, which has become popular in many developed countries has begun finding its roots in the Indian market as well. There are some specific pockets in the country where surprise, majority of the people have said that gothis segment is now growing by leaps and bounds ing to homestays was more satisfying than staying though in other places, the momentum is yet to in regular hotels. Homestays ensure personalised begin. Nevertheless, our big data analytics reveal services as against the standardized services of that there are five states in the country where the regular hotels which is their big scoring point. homestays vertical has registered rapid growth This has almost become a global trend with the in the recent years. The five states are: Kerala, Karnataka, Maharastra, Tamil Nadu and Himachal spreading tentacles of homestays aggregators like Airbnb and other such companies. In fact, Pradesh. And they have become successful in these five states for one primary reason: the policy in several markets in the west where Airbnb has gained in scale, it is giving stiff environment for the homestays is competition to regular hotels. Globquite progressive which is not the In the coming years, ally, observers are talking about the case with other states. In the five the online platforms increasing threat from homestays states where we have the clear like us will definitely to the standardized hospitality and evidence of homestays units multimake a sincere attempt there are many who would tell you plying, they have been growing in to get increasing that for the latter it has become the range of 20-25 percent on an number of homestays annualised basis. And that’s a big online. Over a period of imperative to pay more attention to the next one decade, the personalised services to combat trajectory. And if there is a larger about 70-80 percent of the challenge from the home-based focus on this segment, we can homestay units will be accommodation units. In a country easily have 100,000 homestay units bookable online. like India where it is the early hours in the next five years as against a for the homestay segment, such a mere 3,000-4,000 which exist today. situation will eventually emerge But as I said, its gigantic growth in not so distant future and hotel is quite possible and the segment can significantly contribute in filling the gap in the companies will have to get ready for it. A major shortcoming for the existing homeshospitality demand and supply equation. Its projected growth in a marketplace like India tays inventory in the country today, however, is that they are not part of the online mainstream. simply stems from the fact that creating fresh Our own platform has a large inventory of hotels inventory by the organised hospitality industry is but presently the volume of online bookable not so easy. There are challenges galore – be it homestays units is close to 1000. But this is goregulatory issues or local issues which hotel coming to dramatically change in the future. In the panies have to often encounter especially in the coming years, the online platforms like us will non-metro and far-flung areas. Addition of room definitely make a sincere attempt to get increasinventory via more homestays entry, therefore, is ing number of homestays online. Over a period quite a viable option amidst such a challenging of the next one decade, about 70-80 percent of scenario. homestay units will be bookable online. They are There is an interesting message that is emergcertainly poised to grow big-time in both quantiing from the beginning of homestays’ growth in the country for the organised hospitality players. In tative and qualitative sense and in the process a our analysis of Indian homestays performance, we new dimension will be added to the accommodation dynamics for travellers and tourists in the focused on several parameters including the satcountry. isfaction level of the consumers. And to our utter
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focus on starwood hotels
Le Meridien Gurgaon
Sudeep jain,
Aloft Chandigarh Zirakpur
VP, Acquisitions & Development, South Asia, Starwood Hotels & Resorts
Signing multiple deals with the same owners reflects our success One partner owns the asset, another finances and a third manages. This combining of assets, capabilities, markets, and talent pools to create new value is the current trend, which is definitely gaining momentum and has worked well in the hospitality industry in India. How has the growth been for Starwood brands in the Indian market?
India is a strategically important market for Starwood. Currently the fourth largest market, it is poised to become the third. We have 47 operating hotels in India under 7 brands across luxury, upper upscale and upscale properties. The Luxury Collection (through our exclusive partnership with ITC Hotels), Westin, Sheraton, Le Meridien, Four Points by Sheraton and Aloft brands are already well known in the Indian market. St. Regis our newest entrant is already a market leader. Additionally, we will be introducing our 8th brand in the country with the debut of W Goa in June 2016. Over the years, Starwood has gained great insights into the Indian market and we understand the Indian traveler well. There has been an increase in the domestic demand and also demand for high quality lodging, not just in gateway cities but also in Tier 1 and Tier 2 markets. So we are committed to India and see huge potential for hotel development. I would like to add that a key factor leading to our growth has been our relationship with the right partners and owners across India. ‘The right owner, right location and right brand’ has worked well for us. We have signed multiple hotel agreements with the same owners/ partners and that is testament to our deep relationships in the market and of course the benefits we bring with our brands, sales and distribution networks. I would also like to attribute our agile ‘conversion strategy’ which has allowed us to bring stand-alone, independent hotels quickly and efficiently into our system, driving growth. A lot of smaller hotel chains or independent hotels see
the advantage of our powerful sales, marketing and distribution systems and also our strong brands. This is a great opportunity for us. In fact our Tribute brand is the right fit for independent hotel owners in unique destinations, who want to leverage our networks, while maintaining their independent identity. We are hoping to sign a few such agreements in India soon. Another big part of expanding in India is the huge potential of the India outbound market which is growing exponentially. As Indian travelers become familiar with Starwood’s brands in India, we believe that they will look for our brands when they travel abroad. With a projected size of 50 million Indian travelers abroad by 2020, this market presents a fantastic opportunity for our hotels globally. With our distinct lifestyle brands, long experience and robust management infrastructure, we believe that we are the preferred operator for the Indian hotel development community.
Any special challenges that you see ahead?
Hospitality is an industry vulnerable to extraordinary changes. Hotels will begin to see channels mature and the market consolidate. Hoteliers will need to look at their technology and services to improve performance and reduce operation time to be more agile in the market in order to increase bookings and revenue. Clearly, one challenge for the future is to stay on top of the technology & innovation and create ways to use the latest concepts and devices to our advantage. Technology factor is inevitable in process of decision and plays one of the most important roles in creating demand for now and for the future. While, India currently is
undergoing a paradigm shift, from traditionally being a challenging place to operate business in; it is now getting much easier to get approvals. Government initiatives like Make in India and Digital India are helping promote India’s businessfriendly environment. However, steps are needed to enable easy debt funding, single-window clearances and rationalization of taxes, as the key challenges in India still remain the slow pace of development of hotels which are further complicated by the many licenses, permits and approvals required to develop and operate hotels. Another challenge in the industry today is that of talent. Finding top talent and retention is something most of the players are facing today.
Could you please let us know how your expansion plan is shaping up for this year?
Our growth and expansion plans remain positive and on track. Last year we opened 9 hotels in the South Asian region and signed 16 new hotels. We will probably achieve or top these figures in 2016. The growth momentum is expected to continue. As you may already be aware we now have 54 operating hotels in the South Asian region, 47 in India.
How do you see the owner - management (brand) relationships evolving in Indian hospitality market, especially in wake of increasing cases of brand hopping by owners in recent years?
Building an effective relationship is essential to maximizing the value of an asset. The first step in building such a relationship is to align the interests of both parties. The parties must agree on the goals and objectives to be achieved if the venture is to be successful. While it is a competitive environment, its also one where we are witnessing a rising demand for good quality, branded lodging. Owners and developers understand that while they may have the asset, they need the expertise of branded players. We see owners beginning to prefer a management model (rather than just franchise) with an operator who can help them drive performance. Yet another reason for smaller brands or chains to move to a bigger brand is to increase scale and to leverage the power of a wider, more advanced sales, marketing and distribution system, which an international operator such as ours, brings. Ownership patterns are also
changing. We have joint ventures, mergers, partnerships and various business combinations now. A lot of investors and professionals are stepping into real estate and hotel development. Owners’ are more actively involved in the business and also understand it better.
Do you think that the Indian owners/developers have become smarter over the decades while dealing with international brand managers?
Absolutely. They are more experienced now and understand how the business is changing. The value of brand to the consumer, the growth in emerging markets, the importance of consumer friendly technology and sourcing, development and retention of human capital have helped shape the hospitality industry over the past five years. Owners understand this and hence are also expecting a lot more from international brands. In India we see ownership patterns are changing too. Mergers, acquisitions, joint ventures, partnerships, and other business combinations are no longer an exception. You will see them all. One partner owns the asset, another finances and a third manages. This combining of assets, capabilities,
markets, and talent pools to create new value is the current trend, which is definitely gaining momentum and has worked well in the hospitality industry in India.
What kind of precautions do hotel brands need to take in today’s changing scenario while entering a management contract with owners?
Signing with the right partners is the key, especially in the Indian market, where infrastructure pace is still slow and there are many regulatory challenges. Reputation, experience as a hotel developer, ability to demonstrate financial closure for the project are some key parameters in deciding partners we work with whether through management or through franchise arrangements. But at the end of the day, a meeting of minds, a common or shared objective, respect for what each partner brings to the table, are really the reasons for success or failure in relationships between owners and operators and we at Starwood believe in this and value it more than anything else. The fact that we have signed multiple deals with the same owners, reflects our relationship and success with our partners.
Noida and Greater Noida remain challenging for hospitality industry: HVS
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he overt dependence on corporate clientele is a challenge for the future of hospitality in Noida and Greater Noida, says the HVS report 2015. Continuing its dismal performance as a hotel market, occupancy and average rate have been on a constant decline. Compared to Compared to previous years, the market suffered previous years, the the steepest decline in occupancy market suffered the at 10.3 percent; the average room steepest decline in rate dropped by over 8 percent in occupancy at 10.3 Noida and Greater Noida. Another, major worry has been the fact that it percent; the average has recorded the lowest occupancy room rate dropped by across all major markets in the over 8 percent in Noida country at a lowly 48 percent. The and Greater Noida. report calls it a clear reflection of Another, major worry the weak nature of demand within the market. It has, further, indicated has been the fact that that this trend is, also, being fuelled it has recorded the by the displacement of commercial lowest occupancy and leisure demand to neighboring across all major areas such as Ghaziabad and East markets in the country Delhi. at a lowly 48 percent. Although, the report mentions that almost 1900 rooms were going to enter the market in the next five years, but only 13 percent of this supply was under active development, owing to various hospitality projects being put on hold or delayed. Given the trends, despite limited supply increase in the next few years, it is expected that occupancy and average rates will remain under considerable strain in the coming months and years.
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what’s tre nding budget did not sufficiently address tourism concerns?
Ranjan Bhattacharya
Growing maturity among Indian travellers augurs well for tourism & hospitality Hospitality and tourism must necessarily be viewed as part of a larger economic and social structure, says Ranjan Bhattacharya, Hospitality veteran. I think we should stop thinking of tourism as some big stand-alone activity; instead, see it as an integrated part of a larger whole, and then you will see the big change happening... Across the spectrum, demand is seeing an upward trajectory and the supply has been absorbed in most parts of the country. By navin berry How is the economy shaping up, and likely to impact travel and tourism?
My sense is that green shoots have
been showing up; GDP growth has been over 7%, even as numerous initiatives with far reaching implications for future growth have been taken. This means, our economy has been steady and resilient, and
we are in fact poised for major growth. Tourism and travel will be the first beneficiary of this growth. I also believe that big ticket infrastructure spending, initiatives like Make in India and numerous other programmes, as we witness them in infrastructure development and defence production, among others, will create jobs and also provide base momentum for people to travel. Tourism is a natural beneficiary of this.
What is your sense of the business of hospitality?
Across the spectrum, demand is seeing an upward trajectory and the supply has been absorbed in most parts of the country. This indicates more people are travelling and using hotel accommodation. Everybody is now expecting rate gain, which too will happen, if done sensibly.
There is a feeling that the last
Hotels are becoming pragmatic and started planning differently. They have segmentised their business and plan their budgets according to market needs. They have acquired a sensible approach, removed from ego projections and unrealistic expectations. Travel trade needs to understand the changing dynamics of the business and invest accordingly. I believe the key is How is tourism benefitting going online for greater market from this government’s programmes? In specific terms? penetration and outreach. The government has encouraged startPlease see the big turn-around ups in online space, and I would of Varanasi. Infrastructure has like to see some bigalways been our ger models appear in limiting factor. This means, our economy the travel domain. And this is being has been steady and addressed in a resilient, and we are in big way. This What are the big fact poised for major growth. Tourism and government is changes you see? travel will be the first changing the way To my mind, there is Indians will live in beneficiary of this growth. a growing consumerthe years ahead. ism, more recall and Our quality of life sharing of experiencwill change with es. Overall business is these infra related developments. getting more transparent, pricing Tourism will benefit and prosper is up there on the internet for the automatically. I think we should world to see! People are takstop thinking of tourism as some ing their itineraries in their own big stand-alone activity; instead, hands, booking from homes! New see it as an integrated part of a possibilities to travel to places larger whole, and then you will have emerged. There is maturity see the big change happening. Do growing among Indian travellers. not see tourism as a rich man’s All this augurs well as our numterritory, but tourism for all, inbers keep showing robust growth. cluding those who cannot afford India is truly emerging as a major luxury. I think we are on the right centre for travel and tourism in the track, for certain. world! I do not agree! In fact, the allocation to tourism was increased substantially. If addressing tourism concerns means concessions and concessions alone, I cannot comment. In the current circumstances, the government is looking for more revenue generation to fund the infrastructure push and fulfil its social commitments.
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Valuations of existing assets show correction, flexible brands stand to gain
This article highlights a few key trends in the Indian hospitality industry today, as well as the opportunities they bring forth for all stakeholders.
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n order to enhance the global competitiveness of the country, the Indian government recognised a shortage of branded supply, with most of the scarcity lying in the budget segment. Additionally, the noteworthy rise of the middle class resulted in an increase in both Commercial and Leisure demand for hotels. Therefore, HVS continues to emphasise the shift towards the mid market and budget segments across markets, and the opportunities this brings. Hotel companies with established brands in these segments can harness this trend to create a presence in the emerging business and leisure destinations in the country. However, it continues to be difficult to differentiate between brands in these segments and hotels must prioritise on executing consistent, value driven propositions to attract consumers. While on the subject of budget and economy hotels, it would be a fallacy to not discuss the development of hotel aggregators in the budget space in the year gone by. Recognising the massive unorganised hotel market, companies such as Oravel Stays (OYO Rooms), WudStay and Treebo have partnered with standalone hotels and guesthouses in order to provide marketing, distribution and quality assessments to them. Riding on the back of technology and providing App-based convenience to the consumers, these new-age brands intend to consolidate the unorganised hotel market. It may be too soon to gauge whether these companies will disrupt the branded budget market in India, but the aggregator industry was witness to steady activity over the past year, with the aforementioned companies raising venture funding and implementing ambitious expansion
plans. In order for them to be a sustainable business model however, the aggregators will need to give preference to establishing standardisation across their offerings and building enduring bonds with the hotel owners, over aggressively expanding their inventories. Clearly, as optional leisure and business travel budgets undergo cuts, value-for-money offerings are on the rise. Nevertheless, the luxury and upscale market is expected to recover by shifting focus to domestic demand while simultaneously building international brand recognition. Additionally, hotel companies are now carving a niche market by promoting their luxury properties as destinations that provide a unique experience. The ITC Grand Bharat in Gurgaon and the JW Marriott Resort & Spa in Mussoorie are examples of such destination resorts. Given the variety of untapped leisure locations in the country, this trend provides a lucrative opportunity for investment in the hospitality sector. Another trend that continues to garner force is the increase of brands targeted towards Generation Y travellers. We anticipate that brands such as Red Fox, Aloft, Radisson RED and Hyatt Place will continue to expand their presence within the country as their capacity to attain a strong RevPAR will interest both operators and owners. With constantly changing consumer patterns, the key to success for all brands going forward will be their ability to proficiently connect with their consumers and clearly distinguish their product. Furthermore, operators and owners have to face the challenge of keeping their moderately-priced lifestyle brands relevant, while simultaneously gaining economies of scale. It is also noteworthy that Social
touch-points. From exploration of options and choice to customer reviews and satisfaction, technology is gradually becoming the center of client-consumer interactions. Despite offering an abundance of opportunities for personalisation, endorsement and loyalty, investment in technology by hoteliers is still inadequate. For example, the use of mobile technology such as smart phones or tablets present ample opportunities for hoteliers to connect with consumers and streamline operations, but it is still grossly under-utilised. On the other hand, investing in Achin Khanna complicated technologies Managing Director Consulting for in-room features proves Valuation - HVS South Asia to be detrimental for the brand. Therefore, in order to Still, the average staff turnover in the industry remains north of 30%. The adapt to technology savvy evident connection between staff consumers, owners and retention and client satisfaction, and operators need to strike a high staffing costs accentuates the balance to provide comfort, need for talent management. rather than cause a disruption. Furthering the theme of enhancing consumer experience, the most important variable media has very quickly become for delivering a company’s brand embedded in every step of the promise is the talent in charge of decision-making process for consumers. This can be viewed as both conveying it. Still, the average staff turnover in the industry remains an opportunity and a threat for the north of 30%. The evident connechospitality industry. Any disparity tion between staff retention and between a brand promise and its client satisfaction, and high staffing execution is immediately brought costs accentuates the need for talent to the forefront, given the transparmanagement. Operators have the ency of the medium. Furthermore, opportunity to guarantee guest the knowledgeable customer is satisfaction by developing the best now able to “unbundle” the entire methods to employ, compensate travel itinerary, as the internet proand preserve talent within their orvides abundant clarity about guest ganisations. The present economic experiences and unrestricted price recovery will generate financially atcomparisons between products. tractive options for employees, and Congruous with this trend is the most operators today need strategic use of technology at all consumer
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What do you believe can signal the road ahead?
plans to hold on to their critical workforce. In an attempt to do our part to help the cause, HVS Professional Skills Development division categorically designs innovative programmes to connect employees with the brand, facilitating the delivery of unfailing standards of customer service across platforms. Another notable trend that emerged was the rise in the transaction activity and the increasing number of conversions of existing hotels. Keen investors need not limit their options to purely greenfield projects, and can acquire existing assets to stimulate their expansion plans. Additionally, the 10% drop in active development of future supply in comparison to the previous year supports that this trend will continue. Thus, the need for developing stable, long-term relationships with committed local partners is stronger than ever. As far as conversions are concerned, the hotel companies with flexible mainstream brands stand to gain ground due to the comparative ease of transforming existing properties. The aforesaid growth in transactions and conversions strongly points towards the rising significance of asset management within the hospitality industry. Valuations of the existing properties have corrected and the well-informed owners today do not shy away from being involved in decisions that impact their returns, or from divesting the loss-making investments. Therefore, consummate yield management is the need of the hour, coupled with improved cost management. An asset manager plays a critical role in ensuring robust top lines, stronger bottom lines and consistent growth trajectory. This well established practice in mature markets is increasingly becoming the need of the hour in the Indian context as well. In closing, the Indian Hospitality landscape has been witness to green shoots this past year. The recovery has been subtle, yet evident. As future supply tapers, future demand improves and recent entrants stabilise, we are likely to see further growth in the performance of the sector in the months and years ahead.
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Business Centre at Radisson Blu Plaza Delhi
Swimming pool at Radisson Blu Plaza Delhi
K B kachru, Chairman, South Asia, Carlson Rezidor Group
Increase in occupancy levels encouraging but average rate a challenge for hotels in Delhi Delhi is the main gateway city to India and once we focus more on infrastructure particularly by encouraging development of economy and midscale hotels, the numbers will rise. Lack of required conference and convention facilities is also holding us back. There is great scope to expand tourism in Delhi. Marginal incremental growth has been witnessed in occupancy levels but average rates continue to be a challenge.
By navin berry How do you view the new budget for Delhi with regard to tourism?
Tourism has indeed been recognized as one of the pillar for potential beneficial contribution to GDP. Positive announcements include emphasis on branding “Delhi”. Redesigning of roads to improve access to key tourist zones, building skyways to monuments like Qutub Minar and overall steps being taken for ease of doing business specially by in-
troducing single window approach for organizing events etc. Announcement of “Delhi Festival” however, not much has been done by way of rationalizing of taxes particularly for hospitality industry. Delhi continues to be charging luxury tax at a much higher rate than its neighboring states. This is making hotels even in economy segment more expensive.
Where do you see tourism moving in Delhi and NCR?
Delhi is the main gateway city to India and once we focus more on infrastructure particularly by encouraging development of economy and midscale hotels, the numbers will rise. L ack of required conference and convention facilities is also holding us back.
Considering the product that we have, how have we fared so far in its projection to the rest of India, abroad? There is great scope to expand tourism in Delhi. Marginal incremental growth has been witnessed in occupancy levels but average rates continue to be a challenge.
How do you feel we can increase tourism to the city,
around which products, to which markets, and how?
1) We need to brand and package “Delhi” better. 2) Improve on building the required infrastructure besides maintaining our tourist places better. 3) Focus be on increasing hotel inventory in economy and midscale segments. 4) Improve transportation 5) Cleanliness and hygiene around our monuments 6) Besides international market, Delhi has a huge potential from domestic source markets. Delhi should essentially participate in travel marts, road shows and provide entertainment. It has the potential of making it’s a “happening happy city”.
How is the hospitality industry doing, considering so much addition of inventory at Aerocity ?
If you analyse, market has absorbed most of the new inventory. All the hotels in and around Aerocity are doing a very respectable occupancy, however, improving ADR’s will take atleast 12 – 18 months.
siddharth dabhade, Google India
Ease of customization and year-round travel outcomes of technological infusion: Siddharth Dabhade the current landscape?
By Shashank Shekhar What are the top emerging trends in hospitality in India? What are the key indicators?
Hospitality sector has been re-energized in the last two years. As the internet penetration has grown led by adoption of smart phones, we're seeing a very healthy increase in search queries coming from mobile phones. Search queries for hotels on mobile grew by 90% year-onyear in the year 2015. The other big driver has been branded budget hotel chains. Budget hotel queries already account for 35 per cent of total accommodation queries and a large share of 47 percent of search queries are for the brands providing budget hotel inventory online. Newer players in the segment have
Google views very strong Constant dose of role of technology being technology has helped played out in the hospicreate a more informed tality industry. The key consumer who seeks areas where technology is intense customization, impacting hospitality are: says Siddharth • Consumers time spent Dabhade, head of on media has changed industry, Marketing & drastically. Lot of time is Advertising, Google being spent on mobile India. He also notes that and online in a day. Hence the process is creating lot of research for travel a more transparent and hospitality shifted pricing structure, to online. People spend and new models for whopping 169 minutes on aggregation and a day on mobile which distribution. Excerpts of is larger than any other the interview: medium. Another interesting data point is that 84% people use their smart phone while watching TV. energized the vertical by unlocking a brand new inventory online. They • Price discovery for consumers has become more transparent. have been quick to capitalize on • Technology is creating new modthe online demand with aggressive els for aggregation and distribution. advertising spends in building their New models of channel managebrands, which is leading to overall ment have also come up. category growth for the Industry. Internet users in the country are lapping up the budget hotels online Given that Google has access to as is evident in the growth of Goog- more data than any other online le search queries. Branded budget player, what is your take on the hotel brands queries in India are future growth of hospitality? growing at 179 percent year-on-year What do numbers suggest? compared to just 36 percent yearFuture growth of hospitality: on-year growth in generic budget Budget hotels: Lot of potential hotel queries. to grow more in the budget hotels space. This is evident from the way consumer queries are trending. How does Google view the Overall hospitality and accomgrowth of hospitality and the modations queries are growing at role of increasing infusion of 37 percent year-on-year, but the technology in its day-to-day branded budget hotels queries are operation? How is it changing
growing at 179 percent year-onyear. Budget hotel queries already account for 35 percent of total accommodation queries and a large share of 47 percent of search queries are for the brands providing budget hotel inventory online. We expect this segment to continue to see massive growth with leisure travel expected to pick up soon. Leisure travel growth: In terms of top destinations searched for accommodation during March to June period of 2015, Maharashtra, Tamil Nadu, Karnataka, Goa, Rajasthan, Himachal Pradesh, Kerala and Delhi-NCR are the most searched destinations. Majority of these States capture business or work related travelers, indicating that leisure destinations will be the next growth driver for branded budget hotel category as today out of the top 50 domestic searched destination, only 30% of destinations represent leisure travel.
ogy has made travel products distribution much easier. Informed traveller: Technology has brought in more informed traveller. Consumers know a lot about their destination of travel during the planning process. Alternate stays: Strong growth envisaged in the alternate accommodation sector. It is possible because technology has been able to bring in home owners and travelers together. Video is the new language of Brand communication: Streaming video will account for more than two thirds of all consumer internet traffic by 2017 (Cisco). Round the year travel and trips: Earlier, there was a very strong seasonality in the summer and winter seasons. Now, consumers are taking multiple trips all throughout the year. This is because technology has made trip planning more convenient and faster.
How has technology changed tourism? What are the key areas that may transform with growing technological input?
Do you think Smartphones are leading this trend? Do you think it is a unique feature with India, given the scale of users and internet penetration?
Technology's impact on tourism: Rise of holiday customization at scale: Earlier before the proliferation of Internet, group tours was the norm. Now, with technology democratizing the information for consumers, travelers are looking at planning and customizing their own itineraries. Hence, we see emergence of newer holiday players who are helping consumers make the process easier. Technol-
There are over 300 million internet users in India and over 200 millions access the Internet from their mobile phones. 6 million new mobile internet users are getting added every month. All these new users are mobile only internet users - this is expected to continue - India is already a mobile first market and smart phones will continue to drive the growth of Internet in India.
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focus on starwood hotels
Westin Gurgaon
The St. Regis Mumbai
dilip puri, MD, Starwood India
Industry settling down with better rates ahead, 2016 poised for growth When I talk about improved health now, I am talking about seeing rates grow. True profitability will come from rate growth and not from occupancy growth. I believe that from 2016 and beyond we will see hotels in most markets able to take their rates up. By navin berry Last one year how do you feel aboutthe health of the industry across all segments , how has it done? Do we see more,or less, hotels in distress?
I think the operating performance of almost all hotels across most markets in India, be it the mid-scale, up-scale, luxury - 2 015 has certainly been an improvement over 2014. And I think 2015 has kind of signalled the end of thelastcycle. My sense is that the second half of 2016 will begin a new cycle of growth. A lot of the depressed performance of hotels was more due to supply side of issues. And supply side issues came about because a lot of the hotels t hathave opened in the last 2-3 years were actually hotels that were signed up before the recession. And then post the recession many of them got stalled and delayed. Many owners and developers didn’t see the market. So as the economy started limping back these projects started. A lot of the hotels you see opening in India in the last 3-4 years are delayed constructions;that cycle is now complete. So a lot of the supply that had to come into the market has now come. So we will see a new cycle of both, new development of hotels and because the supply pressures have gone and we see demand getting robust, the operating performance of existing hotels will also improve.
Are there any markets, say in Delhi and NCR, where we don’t see more significant supply happening?
Correct, same thing with Mumbai. And Bangalore some supply yet to come. Hyderabad, Chennai, Pune where a lot of supply …. The good news is that a lot of that supply has been reasonably well absorbed. Albeit with rates dropping but I think
everyone is pleasantly surprised that most hotels have been able to make occupancy gains. And when I talk about improved health now, I am talking about seeing rates grow. True profitability will come from rate growth and not from occupancy growth. I believe that from 2016 and beyond we will see hotels in most markets able to take their rates up.
Not maybe 100% related to health but to what extent is it the consolidation of brands in the market? Is there some co-relation with the brands also settling down and now people are willing to pay a brand price. Is that also happening?
Not really. I think that is something that is ongoing. The arrival of the international brands and their establishing themselves in India across different categories has been g oing o n for quite a few years. I think t hereis stronger demand growth. When we talk about the GDP growth and the growth of the economy we are one of the first sectors to benefit from it. Because whenever the government opens up something, people have to travel for it. Now just look in the last 6 months to one year, every single state in India has had global investor meets. And then they are announcing 1000 and 1000 crore worth of projects and deals, investors have to travel to make this happen. And this clearly influences demand so that demand w ill signal growth… the rate is going to come fromhere, as the next logical step. The consolidation of brands is a factor to the extent that you are giving customers more choices, and smarter ways to book; really ingraining the concept of loyalty into Indian travellers andthis is most importantly the big shift in domestic leisure.
My question was – Indian customers particularly have come to appreciate the brands and they are willing to pay for those brands? Because they have understood what these brands are now and somewhere the brands have come home to them and so now they are choosing and paying for the brand more happily.
I would agree. But the choosing and paying happily is because of concepts of loyalty programmes. I also feel that as many Indians go abroad, they experience the brands and this also brings in loyalty. This is perhaps true of all foreign brands operating in the country, not just Starwood.
Coming to another subject that you raised, all these investor meets in the states and yours is the first sector to benefit so a lot of your growth/demand is coming from economy led momentum. For our big corporate city hotels, yes,that’s where it is coming from.
Is that true for the bulk of the hospitality industry? Yes.
How muchareIndians driving this? Over the last 5-7 years has the Indian component kept increasing. Yes, verymuch. From 10 years ago where it was 80/20. 80 for foreign and 20% Indian, it is now 65% foreign and 35% Indian. This is big city corporate markets.
How much more do you think we will be able to stretch this?
In the next couple of years, I see it coming to a 50/50 level soon. The future of Indian hospitality is in domestic travel. Let there be no doubt about that. The international inbound travel, be it business or leisure, will always be that creamy layer. But the bulk of travel will be domestic, corporate and more importantly leisure. You will begin to see more resort development in India, because the domestic traveller as he is getting more adventurous is looking for short stay vacations. Take an example of the JW Marriott at Moussoirie or the Meridian in Mahawaleshwar – all catering to 1-2 source markets – for leisure and MICE. Take the case of soon to open W in Goa-while it will attract a strong international market as well,the primary driver will be the wellheeled Indian.
One thought that came to my mind was that you have able to introduce a newbrands into the market and with considerable success. Westin is a newer brand and already well established. How does Starwood achieve this?
I guess the existing infrastructure and platform we have built up is agnostic. We have 9 brands. Its not so difficult for us to open new hotels. How d o we create recognition?The idea behind having such distinctive lifestyle brands is that each is v ery well defined with its own distinctiveprograms and the offerings. O ne possisbleanswer lies in the fact that so many Indians now travel internationally they get exposed to our brands and then they look for our brands here within the country. Sheraton, as a brand,has been in this market for years and years and there is familiarity. We were lucky with Westin where we built and opened as many as5 properties,one after the other. That for any brandis significant, and most other brands do not have the same growth story. For instance, JW Juhu opened in 2000 and then for 10 years there was no other JW. When we open4 h otels of the same brand together, we can spend a lot more marketing dollars
on building the brand. That’s why Westin became so popular so quickly. Meridian has been in India for years. For Aloft I would say we could have done more,and we will be doingmore,because we have Delhi airport coming up hopefully at the e nd of the year.
Going back to the owners and the supply having settled down, are you seeing a change inprofile of owners wanting to enter into hospitality? Who is the new owner now?
Clearly the institutional owner,the likes of SAHMI. That’s a new breed of owners. We see a lot of activity in the conversion space. So it’s not about having to find new owners, its about finding owners whose hotels need newer brands. We are also b ringing a newer kind of owner, possibly as well.
What about St. Regis?
It is the biggest success story in any luxury opening. Local market reputation is great. We have seen exponential growth in all areas of the business at the hotels, from room revenues, to social events. Clearly, there was a huge market awaiting a brand like this one.
Starwood Hotels & Resorts accelerates expansion of footprint in South Asia
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he year 2015 was an eventful year for Starwood as it opened nine new hotels and signed the opening of 16 properties. It continues on a robust growth trajectory, expanding its regional presence while unveiling new brands. Since January 2015, nine hotels were added to Starwood’s South Asia portfolio. New openings in India included Four Points by Sheraton Agra, Le Méridien Gurgaon Delhi NCR, Le Méridien Mahabaleshwar Resort & Spa, Sheraton Hyderabad Hotel, Le Méridien Nagpur, Four Points by Sheraton Vadodara, and The St. Regis Mumbai. The latter, which debuted this past September, marked the very first St. Regis hotel in South Asia. In Bangladesh, Starwood unveiled the Le Méridien brand in the capital with Le Méridien Dhaka. In Bhutan, the company opened its second Le Méridien property in Paro – Le Meridien Paro, Riverfront. Starwood’s strong growth momentum in the region continues with the signing of 16 new hotels including: The St. Regis Vommuli Resort, Maldives, Sheraton Dhaka Banani Hotel and Le Méridien Resort & Spa, Bhaluka, both in Bangladesh. In India, Starwood signed five Sheraton hotels in Ahmedabad, Chennai, Ambala, Srinagar and Bodh Gaya (Bihar).
Growing luxury portfolio in South Asia India’s luxury market continues to soar driven by rising disposable incomes and an appetite for luxury goods, including hospitality. Starwood Hotels & Resorts is well positioned to leverage this trend as one of the largest luxury hotel players in India with 11 hotels under The Luxury Collection flag through its partnership with ITC hotels and the recent introduction of the St. Regis in Mumbai. Starwood’s luxury growth continues with the upcoming openings of, both, The St. Regis Vommuli Resort, Maldives and the W Goa Retreat & Spa this year.
Conversions spur growth in India Starwood has had tremendous success converting independent and branded hotels into its portfolio. The strategy has significantly mitigated the development risk typically associated with the slow pace of development and regulatory issues in India, and hotel owners have benefitted from Starwood’s distribution capability, the power of its SPG loyalty program and the strength of its brands. Le Méridien Gurgaon Delhi NCR, Le Méridien Nagpur, Sheraton Hyderabad Hotel and The St. Regis Mumbai reflect prime examples of the success of Starwood’s conversion strategy.
Resort portfolio takes off The opening of the stunning new Le Méridien Mahabaleshwar Resort & Spa in June 2015 accelerated the growth of Starwood’s resort portfolio in the region. The company is developing resorts in Bekal, Khandala, Pushkar, Rishikesh and Ambala, across its different brands and, at the highest end, it will add W Goa Retreat & Spa and The St Regis Vommuli Resort, Maldives to its resort portfolio this year.
BLUPRINT EACH OBJECT A FEATURE, EACH HOTEL A UNIQUE COLLECTION. A CONFLUENCE OF ERAS, STYLES AND ICONS. STORIED ITEMS CURATED IN A VISIONARY SPACE. REIMAGINING THE HOTEL AS A PLACE WHERE GUESTS GENUINELY WANT TO SPEND THEIR TIME. NOT JUST A BED FOR THE NIGHT, BUT SOMEWHERE TO RELAX, REJUVENATE, AND RECONNECT. A LONG-AWAITED BREAK FROM HOTEL MONOTONE.
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ANDREAS FLAIG EVP, DEVELOPMENT T: +65 6511 9290 AFLAIG@CARLSONREZIDOR.COM
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ZUBIN SAXENA VP, DEVELOPMENT T: +91 124 4723 312 ZUBIN.SAXENA@CARLSONREZIDOR.COM
HOTELS DESIGNED TO SAY YES! radissonblu.com
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focus on carlson AA hotels
A BluPrint for success!
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In a bid to enhance consumer experience and create more value for owners, Carlson Rezidor Group is undertaking an ambitious interior designing program which promises to be distinctive and flexible, in equal measure.
arlson Rezidor is ushering in a new era in hotel design. With the launch of BluPrint, the dynamic new interior design program for our upper upscale Radisson Blu® brand, Carlson Rezidor is leveraging cutting-edge technology to deliver a design innovation that will revolutionize the way owners see their properties and the way our guests experience our hotels. To acquaint our partners with BluPrint and help them navigate its merits, we are employing interactive and immersive visualization technology in the form of a downloadable app, as well as portable Virtual Reality (VR) devices. These technological investments are the latest in a long line of hardware and software initiatives that reaffirm our commitment to staying at the forefront of the industry and helping our hotels remain at the top of their competitive sets. BluPrint is part of the Radisson Blu brand’s comprehensive renovation and refurbishment program, delivering distinctive yet
flexible styling to the nearly 400 Radisson Blu hotels currently in operation and under development across 90 countries. Addressing three key aspects of the guest experience – guest room styling, social and public spaces, and meeting and event spaces – BluPrint’s radical approach to interior design responds to evolving trends and guest requirements. It allows for more multi-functional and flexible spaces that creates a better working and living space that is much more like home, resulting in an emotionally-engaging and enriching guest experience. While challenging traditional hotel layouts, BluPrint is also flexible to influences of local culture. This allows for a blend of definitive design classics with bespoke furniture, fixtures and fittings that showcase the location’s heritage. BluPrint facilitates a perfect fusion of form and function, a variety of unique room configurations, as well as inventory flexibility
Thorsten Kirschke president, Asia Pacific, Carlson Rezidor
BluPrint is part of the Radisson Blu brand’s comprehensive renovation and refurbishment program, delivering distinctive yet flexible styling to the nearly 400 Radisson Blu hotels.
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in terms of materials and color schemes. In the public spaces, BluPrint brings to life the distinct identity of each F&B concept and encourages the thoughtful selection of iconic furniture for hotel lobbies. By incorporating uniquely local elements and the creative use of lighting, public spaces are never generic, but always full of character. Meeting and event spaces too can break away from convention and be crafted to accommodate all manner of corporate events or special celebrations. These exciting features will reinforce the brand’s iconic, stylish and sophisticated DNA. With BluPrint as a vehicle of the brand’s organic evolution, we are taking Radisson Blu to the next level, reinvigorating the brand whilst maintaining a clear link to its design pedigree. As we evolve the brand in concert with changing guest expectations, we ensure our
continued relevance and ability to capture the imagination of new audiences. This translates into a strong competitive advantage and greater returns for our owners and investors. Forward-looking initiatives, coupled with an aggressive growth strategy, a strong focus on profitability and innovative business models, have enabled us to deliver strong performance and rapid growth in Asia Pacific. Today, Carlson Rezidor has 109 hotels in operation and 87 under development in Asia Pacific. We have successfully strengthened our leadership position in key markets such as India, forged ahead with expansion plans in Indonesia and Australasia, continued to grow in the Pacific Islands and gained entry into new markets including Vietnam. Our goal of adding 100 more operating hotels to our Asia Pacific portfolio by 2020 is within sight and we invite property owners to embark on a mutually successful future with us.
Leading the next wave of growth Driven by its long tried and tested formula of establishing a strong presence in state capitals and using their pole-position to venture into secondary and tertiary cities, Carlson group will continue its march with a healthy mix of franchise and managed hotels in months to come, says Raj Rana.
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arlson Rezidor was one of the first international hospitality groups to enter the India market, and over the last 15 years, we have successfully established a strong nationwide presence. Today, we are the leading international hotel chain in India, with 76 hotels in operation in India and 43 more in the pipeline. This year, we expect to open about 8 hotels, the first of which is Country Inn & Suites By Carlson Manipal in Karnataka, that is already operational. Radisson Blu Resort & Spa Karjat will also be opening soon. Carlson Rezidor is committed to this market and keen to reinforce our leadership position, further extending our brand portfolio and geographic presence. Our goal is to grow the India portfolio to 170 hotels by 2020 with the vision to have a Carlson Rezidor hotel in every major city and landmark hotels in every state capital.
We are focused to the robustness of our hotel pipeline and talent pool. With a strong workforce of about 15,000 committed employees, our growth promises rewarding career opportunities. To drive organic growth, we are strengthening our presence in state capitals, while also accelerating growth in emerging secondary and tertiary cities. Our current portfolio is a good mix of franchised and managed hotels. While our core business model is in hotel management, our innovative and scalable development platform encompasses other business models, such as selective franchising, and the hybrid manchising model, which begins as a management contract and matures into a franchise agreement. This flexible approach and our commitment to aligning with our owners’ objectives has opened the door to many new opportunities and new project negotiations in
strategic locations. In addition to signing new build hotels, we have also successfully explored the benefits of conversions, which enables us to establish a strong brand presence efficiently and expediently. Given that, India has a cohort of branded hotels, which have agreements that are approaching the end of their life cycle, a surge in conversion opportunities is expected. We will continue to grow our business with existing strategic partners, and forge new partnerships. In 2015, we signed a multi-property agreement with Mushtaq Group of Hotels for four conversions and three new build hotels in major gateway markets throughout Jammu and Kashmir. These seven hotels represent 817 rooms, under the Radisson Blu®, Radisson® and Country Inns & Suites By CarlsonSM brands and cement our position as the largest
Raj Rana chief executive officer, South Asia, Carlson Rezidor
international hotel operator To drive organic growth, we are in the state. The first of strengthening our presence in state these hotels is expected capitals, while also accelerating to open in Srinagar in the growth in emerging secondary and tertiary cities. Our current portfolio fourth quarter of 2016. is a good mix of franchised and Strong demand for mid managed hotels. to upscale hotels are expected in India in the near future. Carlson Rezidor has three well-suited brands lation will be of working age by to offer - Country Inns & Suites By 2020. Radisson RED is a brand that Carlson, Park Inn By Radisson and speaks to this tech-savvy, millenniRadisson RED. With the governal-minded segment. This brand has ment’s emphasis on infrastructure generated immense interest due to improvement and road connectivits simplicity and fresh approach. ity, good opportunities abound Radisson RED Chandigarh Mohali, for the Country Inns & Suites By India’s first Radisson RED new built Carlson brand. hotel is expected to open next year. Radisson RED is an exciting The opportunities in India are new hotel concept that creates a more varied and vast than when uniquely engaging, personalized we started out 15 years ago and we guest experience. This innovaare excited to be part of the transtive lifestyle elect brand, which is formational force that is shaping inspired by design, art, music and fashion, will have strong resonance the hospitality landscape of this key market. in India, where 64% of our popu-
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HVS : stakeholde r surve y
Each market has unique challenges, yet tough to undermine global environment, highlights HVI Report
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VS’ New Delhi and Singapore offices have jointly collaborated to create The Hospitality Valuation Index (HVI) – 2016 for select Asia Pacific cities. The HVI combines the various factors affecting the economy and region at large with hotel-market specific demand and supply dynamics to derive indicative hotel values and future growth trends. For this
edition of the HVI, we analyzed 32 top hotel markets in 13 countries with a total inventory of approximately 332,000 rooms in the mid-market and higher space (four star plus). The following markets were covered: Australia: Melbourne, Sydney Bangladesh: Dhaka Cambodia: Phnom Penh, Siem Reap India: Agra, Ahmedabad,
Hotel Valuation Index – 2016 (US$)
Bengaluru, Chennai, Delhi, NOIDA, Goa, Gurgaon Hyderabad, Jaipur, Kolkata, Mumbai, Pune Indonesia: Bali, Jakarta Japan: Osaka, Tokyo Malaysia: Kuala Lumpur, Langkawi Maldives Philippines: Manila Singapore Sri Lanka: Colombo Thailand: Bangkok, Phuket Vietnam: Hanoi, Ho Chi Minh City
The Index: We chose the year 2000 as our base year with intent to create a starting point for our Hotel Valuation Index. The average value for a notional 200-room hotel across the 32 markets, covered in the report, given their market specific performance parameters in that year was about USD181,000. This value was assigned an index of 1. The Per Available Room (PAR) value (historical & forecasted)
for each market was then divided by the average base year value to arrive at the index number. For e.g. Singapore’s value per room in 2015 derived to be US$653,000, when divided by the base year value (US$653,000/181,000) gives an index number of 3.6. This simply means that the value of Singapore in 2015 was approximately 3.6 times that of the average base year value (reflective of 32 markets) in 2000.
Valuation Trends by City:
The figure above captures the entire index (2013-2018) along with the 3-year forecasted compounded growth assuming a constant USD|Local Currency relationship. In addition to the index, we have also developed a future potential vs returns grid (Figure 5 –next page). The goal seek was to compare forecasted returns (3-year CAGR) to potential, while accounting for inherent variance, for markets covered in the report. Potential was measured by calculating coefficient of variance, a standardized metric to gauge dispersion from the mean. We have classified the results into the following categories and have highlighted major characteristics for the same.
The figure above presents the index for each market relative to the base year (2000) and the respective changes in 2014 and 2015. While relative percentage gains/ losses have been based in USD to facilitate comparison between markets, we have also presented the same in local currency to gauge changes without the effect of currency fluctuation. What is clearly visible is that almost all currencies have depreciated vis–à–vis the USD during 2013–15, as a result of which gains (in USD) remain understated, and losses, accentuated. In fact, various major cities such as Mumbai, Chennai, Delhi, Sydney, Melbourne and Bali witnessed a gain in valuation in their respective local currency on account of a favorable demand and supply characteristic. However, since the depreciation of their local currency was higher than the valuation gain, the resultant changes in USD terms ended up being negative. The average index value, in USD, depreciated by approximately 2.4% and 3.0% in 2014 and 2015, respectively. *Values above presented by % change in 2015 over 2014 in USD terms, highest to lowest. **Sri Lanka and Maldives – % change reported only in USD terms
*Values above presented by index number in 2015, highest to lowest.
Conclsuion: The HVI has surely brought out mixed results. While some were the ‘Usual Suspects’, few challenged status quo. We saw the revival of Indian hospitality, convincingly strong growth in Japan, cautious optimism in Singapore, Melbourne, Sydney and Bangkok and downward momentum in Kuala Lumpur and Jakarta. The idea of combining 32 markets, with different maturities into one index, was not to pit them against one other, but to bring out individual characteristics and differentiators. In today’s day and age, while each market has its unique dynamics, opportunities and challenges, the effects of global environment cannot be undermined.
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Welcome to BITB. India's time has come. Presenting for the first time the big mega show on the region's travel and tourism vertical! Bringing together uniquely India, connectivity, big ticket infra developments, hospitality, global exchange and world connect on culture, holidays and business. At the heart of it, is the resilience, the robust growth, and power of the Indian Traveller! Bringing a sharp focus on traditional heritage and culture tourism, but equally on new emerging streams like MICE, weddings, Luxury, Golf and other sports and events, Technology in Travel, the show will be the first of its kind, powered by the world’s biggest player in the business, ITB Berlin! Strong B2B, alongside stronger partnerships that build conferences and side bar activities, supported by mainstream media in print and television. Each segment will be supported by leading players in their niche from around the world, bringing strong content, buying and selling, and B2B business of every kind.
The Best of ‘Glocal’ is Here! Global player ITB Berlin, the world’s biggest tourism fair, comes together with the most experienced local in India!
28-30 september, 2016 hall 18, pragati maidan new delhi www.bitb.org For more information connect@bitb.org
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Ease of Travel: Infrastructure and Facilitation SMART Cities, big ticket highways and new road, rail and river connectivity is ushering new destinations and helping tourists experience with local flavour, full of surprises. Road travel is emerging as the new big segment, particularly to near-by destinations outside of metro cities. Inland rivers are a great mode to discover any hinterland, as in almost all of Europe, and also as on the Nile in Egypt. India is opening its waterways for travel and tourism. Hospitality is witnessing big time branding, and availability on technology driven platforms, giving unbranded accommodation a never before reach. Destinations, States and Countries The first word in travel and tourism! Where does anybody want to travel? Obviously, to cities and countries around the globe, tourism is always destination oriented. From established cities and destinations to relatively lesser known, BITB is promoting city awareness, for their product uniqueness and variety. Discover what is new and happening all over India and around the world.
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Heritage, Leisure and Group Tourism The traditional base of tourism, and much of Indian travel, domestic, inbound and outbound – driven around culture and heritage, is a major focus. Whether visiting monuments, or for pilgrimage, it is cultural heritage that has driven much of Indian tourism. World over, this is a strong segment and continues to grow, common to both inbound into India and also overseas travel out of India. The entry level segment for travel and tourism that attracts group movement buyers, is also witnessing innovation in that it is growing niche as well, with adventure, shopping and other activities driving it.
Uniquely Indian Products: Heritage, Rural and others This one is a first time for any tourism event in India, to bring sharp focus to little nuggets tucked away far and wide across the country. These are small products that provide unique experiences built around their individual milieu and local conditions. In the heart of Ladakh up in the north, to tree top houses in Kerala in the south. In every part of India, there is a local tradition, a folk story and an experience to savour. This segment brings together experiences that are unique to India. Wellness, Yoga and Ayurveda A relatively new element to tourism promotion, Yoga is now proving to become a binding force among nations where people want to stay fit and healthy. There is the age-old tradition of Indian medicine, Ayurveda, which is being promoted – down south, and also along the Himalayas, in Rishikesh and Haridwar. AYUSH, the Indian government initiative has spearheaded the message of Indian schools of medicine. Both Indians and foreigners are fast taking on to organic foods, vegetarian diets and yoga! Spas are the ‘in’ thing as more and more resorts open around the world. Indians have started taking spa vacations to destinations overseas.
Technology and Online Technology is driving new age travel and also fast expanding the traditional business, creating new ease in travelling, from choosing, booking and experiencing every facet of the business. Online travel agents have increasingly improved their market penetration, providing destinations and facilities neverbefore reach to markets across the globe. First it was only with airline tickets, and then also with hotel bookings, car hires, movie and theatre tickets – some portals could be called end-to-end concierge services. Then there are simple booking engines, other sites are exclusive to hotel chains that bring some of their best offers. Back end technology is equally driving the business – to make for more efficient and effective delivery and at the best price points. MICE and Weddings The Meetings industry has grown phenomenally and has become a major stand-alone segment on its own. Combine them with W, the world of weddings and the package is complete. Indians splurge on weddings, in India or at select destinations around the world – the more exotic the city or location, the more the charm. Destination weddings are becoming ever more popular and Indians are driving much of it. It is not just the hotel, but also the airlines, PCOs and weddings planners, the facilitators who are eyeing this business. Luxury: Indian cities are vying Golf, with foreign ones, Cruises and it has become Second Homes a very Whether it is for a competitive game of golf, or looking world out for second homes, within there! India or overseas, some destinations are becoming very popular, indeed. Buying a second home in London, Dubai and Thailand is a growing segment, for example, or playing golf around Sydney! All over India, tourists want a piece of the sky for a second home! Wine holiday retreats are another growing favourite. Cruises are favourites, too, with more and more Indians looking for never before itineraries.
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Aviation: Airlines and Airports Aviation attracts big attention for India’s travel and tourism. Most of our inbound movements are by air. Air connectivity on regional routes promises to be another big ticket change, given India’s size and also some hard terrain on the ground, in areas like the North East, for example. Metro connectivity to niche tourist segments like wildlife resorts will bring ease of travel. Internationally, new routes have brought one-stop outreach to numerous new destinations around the globe, equally for inbound as much as outbound travel and tourism. Airports are getting upgraded; in some cities like Mumbai and New Delhi, second and third airports are being discussed. Discarded landing strips are being activated.
Hospitality: Hotels, Resorts and Cuisine India’s hospitality industry has witnessed a sea change over the last decade. At the top end is luxury, but there are now layers and layers of established brands selling from budget to mid-market and up-scale. Almost every city in the country is seeing more demand, and supply is not being left behind. Across the world, Indians are looking for appropriate lodging, with an eye for detail, and overall comfort. BITB is an ideal format for brand development and promotion, selling rooms and weddings and also for MICE. The world of cuisines is undergoing equal revolution – Indian food is getting more exotic and world cuisines are entering the Indian market.
Investments: Developers and Promotors Tourism worldwide is attracting new investment, from within India and also from overseas. New opportunities unfold in destination development, hospitality and tourism related infrastructure. Whether it be roadside amenities on India’s growing highway space, or in tourism zones development such as the recent example of Aerocity in New Delhi. When the tourism product is on full display, what better than to also bring possible investors, engage them in a meaningful way to identify where they wish to invest. Event Based Tourism: Cultural, Arts, Literary and Sports First, there are the traditional fairs and festivals, coming down generations. Some of them have become important reasons for people to travel, and building longer holidays around them. Like, the Pushkar Fair in Rajasthan, for example. Of late, new kinds of events have grown around India, leading among them would be events like the Jaipur Literary Festival, and the Kasauli Literary Festival, among others. In the sporting world, there is the F1 in motor sports, and also IPL and T20 in cricket. Shopping festivals are proving popular. While Indians have started looking outside of the country, more and more foreigners are looking to attending events in India. A film industry event like IFA has grown into a great annual coming together of Indian cinema on the world stage. Strong media partnerships have contributed immensely to their popularity.
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biswajit chakraborty
General Manager, Sofitel Mumbai BKC
Sofitel BKC’s location and offerings apt to make it a luxury landmark of Mumbai Through the rest of the year, we plan to amplify Sofitel’s brand pillars and provide guests with a holistic experience to make the hotel a destination in itself. The goal is to make Sofitel Mumbai BKC the luxury landmark in Mumbai as well as a cultural and entertainment hub of the city.
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onsidering you are the only Sofitel in India and the first in recent times what has been the response to the Sofitel Brand?
Sofitel Hotels& Resorts is a French luxury brand of the AccorHotelsGroup, with over 120 five star hotels across the globe. Each hotel illustrates an artful blend of local culture and French elegance. With an innate sense of French art de vivre, Sofitel holds themselves to a high level of excellence and refinement. Its presence in 40 countries across five continents appeals to modern status seekers, who have something special and unique that makes it stand out from the crowd. Blending French elegance and warm Indian hospitality, Sofitel Mumbai BKC is the flagship property of the brand in India, located in the geographic heart of the city –Bandra Kurla Complex (BKC). In a short span of just four years, Sofitel Mumbai BKC has proven to be a brand to look-out for and has become a benchmark for luxury hotels in India. The luxury property of AccorHotels in India has won several awards and ranks 3rdon TripAdvisor out of 410 hotels in Mumba. It has also won the Expedia Award amongst the best 650 hotelsin the world, as well as the highest Mystery Shopper rankingamongst Asia Pacific. It has also won
the title of theBest Luxury Hotel at the World Luxury Awards in 2014 and 2015.
How do you position the brand and how do you capture it in your property?
Sofitel Hotels & Resorts worldwide are renowned for offering a unique experience of elegant French luxury and the best of local culture, which is symbolized by the powerful and unique logo – the Sofitel Link. Sofitel’s unique personality is distinguished by a four-dimensional experience: special attention to Design, a constant celebration of Gastronomy, a passion for Culture and an oasis of tranquility dedicated to Wellbeing. These pillars constitute the pure essence of the Sofitel DNA and the reason that makes the flagship property of the brand in India – Sofitel Mumbai BKC, the first choice for guests. Sofitel Mumbai BKC has successfully introduced the city to a unique mélange of French ‘art de vivre’ and warm Indian hospitality. The main differentiating feature of Sofitel has been its emphasis on Design. The interior design of the hotel was conceived and created by Ms Isabelle Miaja, a designer of International repute. The innovative design at the hotel is created as a blend between Indian and French cultures, intricately weaving the two together through different
design elements in the hotel. Each detail has been carefully balanced with perfect harmony in the varied colours, shapes and décor that are carefully weaved into the opulent spaces. The entire hotel has intricate artwork and a story behind every corner and structure. From organizing themed brunch parties to hosting glamourous fashion shows, Sofitel Mumbai BKC is always putting together innovative concepts in Gastronomy at all their restaurants – Pondichéry Café, Artisan, Jyran, Tuskers and Le Bar Diamantaire. The hotel has brought several local and international Chefs to India including a French Chef for introducing guests to the flavours of France, a Thai Chef for authentic Thai cuisine, a Vietnamese Chef for a taste of Vietnam, a German Chef for crafting sumptuous sausages, cold-cuts and charcuterie delicacies and more recently, a Japanese Chef and a Lebanese Chef for a Middle-Eastern fare. Together with the cuisine, Sofitel Mumbai BKC has also flown down local artists and tied-up with consulates of various nations to give guests not only a taste of
gastronomy, but also the Culture of that particular country through performances, art, décor and more. Dedicated to the art of Wellbeing is the 24-hour So SPA. With six treatment rooms, including one exclusive couple’s spa area and a private Jacuzzi, the So SPA at Sofitel Mumbai BKC sprawls over 6,000 square feet and spells paradise. Understanding the needs of today’s jet-setter traveller, Sofitel Mumbai BKC has made its signature spa a 24-hour offering, catered to the busy travellers with its ‘Pre Jet Lag’ treatments. These initiatives are just a tip of the iceberg to offer guests with unique experiences.
What is the current profile of the business that you are getting? What aspects of the hotel are seen to be more popular among your clients?
Sofitel Mumbai BKC is designed specifically for the global traveller, offering multifaceted experiences in cuisine, entertainment and relaxation. The hotel lives by the motto – “Life is Magnifique!” Being a large boutique hotel, Sofitel Mumbai BKC promises to offer guests an opportunity to experience luxury at its best. The hotel is a unique address where buoyant business meets a chic lifestyle. Contemporary elegance combined with exquisite design creates a symphony of style in the 302 guest rooms and suites of the hotel. Cutting-edge meeting spaces and lavish venues, the elite Club Millésime Business Lounge on the top-most floor, a wealth of innovative dining outlets, So SPA,
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So FIT, a serene open-air pool and its strategic location in the new financial centre of Mumbai make this luxurious hotel a haven for both business and leisure travellers. Geographically located in the central business district of the city – Bandra Kurla Complex, the hotel attracts guests from all corners of the city. Most of the travellers are business oriented and enjoy the close proximity to the financial hub of the city. The strategic location of the hotel not only gives guests easy access to the commercial district and airport, but also to major tourist attractions in south and north Mumbai via the Bandra-Worli Sea Link and the Eastern and Western Express Highways. The hotel also has steady stream of visitors and guests from several international markets such as Singapore, Thailand, France, UAE, UK, Middle East, USA to name a few.Among corporate and business guests, the hotel’s well-appointed meeting rooms and business loungework well. Recently the hotel launched the Dynamic Pricing concept thatallows companies to host meetings and banquets from 12:00 midnight to 6:00 am and save up to 40% as compared to meetings during the day, ensuring economies of scale. Through the rest of the year, we plan to amplify Sofitel’s brand pillars and provide guests with a holistic experience to make the hotel a destination in itself. The goal is to make Sofitel Mumbai BKC the luxury landmark in Mumbai as well as a cultural and entertainment hub of the city.
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focus on marriott hotels
The Ritz-Carlton Bangalore
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JW Marriott Mumbai
Marriott keen to leverage from a positive economic environment, saysNeeraj Govil The Marriott group was keen to leverage from a positive economic environment and a pragmatic budget, said Neeraj Govil. With a better outlook of coming years, he revealed that the group was keen on tapping upcoming MICE markets like China and Japan. An exclusive with Neeraj Govil By shashank shekhar
“W
e currently operate seven brands in India – the Ritz Carlton, JW Marriott, Renaissance Hotels, Marriott Hotels & Resorts, Marriott Executive Apartment, Courtyard by Marriott and Fairfield by Marriott. Marriott has been in the country for the last 16 years and has been recognized as a formidable hospitality brand in the industry,” said Neeraj Govil; Market Vice President, South Asia. Though all of Marriott’s brands have done well for themselves in their intended markets, he highlighted JW Marriott and Courtyard by Marriott as specific brands which have enjoyed enormous success and goodwill. “With seven operational JWs in the country, we will be opening our eighth JW Marriott later this year in Kolkata.” “In terms of sheer brand value and revenue generation, the growth of JW Marriott has been phenomenal for us; it is positioned in the luxury tier and the effort is to consistently elevate its experiential quotient
We have 14 operational properties which have been positioned to allow our guests to experience entry level five-star luxury. With a growing aspirational customer base in India, we are confident that these numbers will only grow from here,” he opined. Given that the overall business sentiment in the nation has improved, MICE is a huge revenue driver for the group. Neeraj added that the wedding segment was another area that has huge potential and was growing at a steady pace. “In terms of specific markets, MICE segment in India generates almost twenty percent of our total annual revenue. Though it does tend to reach higher levels in certain markets that are more inclined to corporate movement than leisure travel,” Neeraj explained. However he mentioned that the availability of adequate inventory is a major
What’s Trending
neeraj govil market vice president - south Asia, Marriott international
To better grasp the dynamics of the market we are studying the consumer stay pattern which will help us evolve better strategies.
☛ The prime focus of the Marriott Group will be on ensuring consistent supply of quality products and services. ☛ Non-traditional MICE markets likely to bring in more MICE travelers. Countries like China, Japan and UAE key markets in this segment. through all our brand, marketing and operational efforts.” he shared. “It is one of the leading international brands currently operating in India with a strong distribution network. We have also leveraged our positioning through some high-profile partnerships in the past and will continue to do so going forward,” he added. Neeraj said Marriott’s prime focus has been to ensure consistent supply of quality products and services by constantly committing to a high customer satisfaction index, allowing the brands to be unique and singular in their positioning. “Another crucial factor which must be attributed to JW Marriott’s success in India has been its extraordinary strong F&B offerings,” he asserted. Aside from JW Marriott, Courtyard by Marriott is the other top performer for the group. “The Courtyard brand of hotels have been strategically placed at key geographical locations to cater to various segments of travelers.
pre-requisite for the success of such a foray. “We have strong room inventory in major metros like Mumbai, Delhi, Bengaluru - hotels with over 500 rooms backed by extensive banqueting facilities to cater to meeting requirements,” he added. Driven by a strong global sales team which supports Marriott’s drive towards attracting inbound tourism, Marriott constantly engages with the wider industry through participation in trade-shows, fairs, and leisure and MICE events. “In recent months there has been a growth of MICE movement from traditional markets like the USA and Europe. Now, we want to focus on non-traditional markets that, we believe will lead the segment in the near future; China, Japan and Middle-East – UAE to be specific,” he detailed. “As we grow our presence in Tier2 cities through our diverse brands, we believe that we will leverage our network through our very strong presence in key cities like Mumbai, Delhi Bengaluru and Pune,” Neeraj
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said. He mentioned that 6-8 hotels were going to be added to the portfolio by the end of 2016 which included properties in Lucknow, Amritsar and Belgaum, Jaisalmer and Kolkata amongst others. An extension of that effort was reflected through Marriott’s latest addition of resorts to its portfolio. Neeraj referred that the group recently opened a resort property in Mussoorie. “We have succeeded in creating a ‘luxury destination’ out of Mussoorie with phenomenal demand generation due to the astoundingly beautiful landscape of the hotel and the leisure facilities that we have to offer. Jaisalmer is where we will be mobilizing our efforts next to open another stunning resort property,” he shared. Talking about some of the recent trends in hospitality, he argued that the online booking segment was an area where the hospitality industry was going to see more growth and maximum opportunities in the coming months. “As a group, we are equally keen on leveraging from both the aggregators and OTAs besides facilitating bookings through our own online platform. To better grasp the dynamics of the market we are studying the consumer stay pattern which will help us evolve better strategies,” he outlined on the road ahead. He believed that the larger challenge for the industry was to ensure that the government moved ahead with reform measures. “The recent budget is a progressive one and bodes well for the industry.”
Courtyard by Marriott comes to Raipur
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he capital city of Chhattisgarh – known as the rice bowl of the state and one of the largest steel markets in the nation – is set to have a Courtyard by Marriott. Now developed as a major tourist destination, the city offers several sight-seeing options that include historical temples and rich wildlife sanctuaries.The city also has prominent education institutions like IIM, NIT, AIMS, Hidayatullah National Law University and IIT. Located within 10 minutes of the international airport in Raipur, this hotel boasts of 108 spacious rooms including 12 contemporary suites. Keeping in mind the needs of MICE travelers, the hotel offers state of the art meeting facilities, fully equipped meeting rooms with high definition audio-visual support, wireless, high speed internet access, and video conferencing facilities. The Hotel offers more than 13,832 sq. ft. of banqueting space with magnificent open views. These facilities come with state-of-the-art audio visual facility, wired and wireless connectivity and video-conferencing facilities. Patrons can enjoy state-of-the-art audiovisual services and high-speed Internet access in every conference hall, and a full-service business center and other hotel amenities, making corporate travel in Raipur very convenient.Be it company meeting, an off-site or a special celebration, the hotel’s functional spaces with surrounding landscaped gardens make an ideal venue for team building activities, social gatherings and weddings. Weddings and Banquet space covers over 12,000 sq. ft, with a clear ceiling height of 21 feet, providing ample space to cater to the burgeoning wedding segment. The hotel can host approx. 750 guests at a time, for any given function. Every room is equipped with Tea / Coffee maker, a laptop compliant safe, high speed wired and wireless internet, an I -Pod docking station, a mini-bar and a flat screen LED television. With a number of dining options including MoMo Café, the all-day dining, Java+, Coffee Bar and B&W for delightful beverage selection, stay at Courtyard by Marriott, Raipur is a rejuvenating experience, whether one is travelling for business or leisure.
ONE STEP AHEAD... LEADING THE WAY 7 BRANDS | 18 CITIES | 32 HOTELS AND MORE TO COME. Astute and informed travelers know what they want. Marriott International perceives this and offers customized solutions with distinctive brands uniquely positioned. The Marriott name gives owners the confidence to invest in our brands. Our reputation for immeasurable quality, service excellence, innovation, and integrity is built on more than 80 years of hospitality industry experience. With more than 4,000 properties worldwide and the broadest portfolio in lodging, Marriott is the right choice for your next project.
For more information log onto marriottindia.com
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what’s tre nding Guest Column
The Changing Face of Hospitality Landscape in India Hotel Fortune Select Dasve Lavasa
By suresh kumar
O
Fortune Select Grand Chennai
ver the last few years, we have seen substantial growth in the Indian Hospitality scenario, both in terms of supply and demand. We have witnessed emergence of new brands – both International and Domestic thus are being dedicated to focus on specialized skills taking us to a completely unchartered territory for all sectors including Hospitality. with a mix of superior/international asset quality, On the consumer behaviour front also, we i.e. sheer opulence complemented by effortless are witnessing a paradigm shift. People in India luxuries, blended with a global attitude through are breaking away from traditional methods and the introduction of international concepts in Cuilifestyle. They want to explore all that is new, all sines, Standards, Branding and Marketing. Hospitality has today emerged as a need based that life has to offer. It is a borrow-and-spend culture now as against save-and-spend culture a few years industry and is being recognized as one of the ago. This “changed mind set” is creating a huge dekey drivers for the growth of the services sector mand for hotels that provide quality and, thereby, the Indian economy. at affordable rates. Also the unprecThe market for hospitality has While one can actually edented growth in domestic tourism also grown manifold with India applaud the great becoming an integral part of the initiatives undertaken by due to the burgeoning Indian upper World Economic Map, thus creatthe Government of India, middle class population, are the driving factors behind this ever ing an additional momentum to these will need to be actively supported by the increasing demand. the International Traffic to India, Union Budget at Today, mini-metros, satellite further supplemented by the rise of monetary, infrastructure towns and tier II cities in India the Indian Domestic traveler, pigand policy level in order gybacking on a growing GDP. to accrue benefits for the are witnessing huge growth. It is At the juncture where global Hospitality Sector in the estimated that in India, nearly 62% of the branded hotels are located growth is in slow mode, business long run. across 7 Primary markets and 12 community across the world is Secondary markets. While the eying the Indian Growth story proprimary markets consist of metros viding an opportune moment for and mini-metros, secondary markets consist of tier the country to leverage this favorable sentiment. I & II cities. The overall presence of branded hotels While one can actually admire and applaud the has now spread across nearly 100 cities. great initiatives undertaken by the Government of The maximum growth of active development India like “Make in India”, “Digital India” and the is taking place in the Mid-market to Upscale recently launched “Startup India Standup India”, these will need to be actively supported by the Un- segment. This inclusive development is taking place due to the potential identified on the basis ion Budget at monetary, infrastructure and policy of Acceptability, Affordability, Accessibility and level in order to accrue benefits for the Hospitality Availability in these cities. Therefore, though the Sector in the long run. The outlook is extremely demand in these cities may not be the same in optimistic. Already new initiatives at both, Central as well as State Government level, in boosting ease numbers as in the metros and gateway cities, but it is growing by the day and presence in these cities of doing business is resulting in de-licensing, and is becoming critical for all hotel chains. There is deregulation measures are reducing complexity, bound to be competition and eventually people significantly increasing speed and transparency. who are going to do well are the ones who can Also, the recently announced initial list of 20 catch the pulse of the ‘Indian business environnew Smart Cities should result in new development’, thus translating the dreams of both the ment opportunities for the Hospitality sector. In investor and the consumer into reality. addition, the new industrial clusters that are being The future looks promising with India poised developed in identified industrial corridors with to be the ‘destination’ for all International Brands. connectivity to feeder markets shall also necesThe availability of land at affordable prices, along sarily create new destinations for mid-market with support infrastructure in terms of road, rail segment. In order to cater to this anticipated and air network can go a long way in ensuring demand, skilled manpower would be needed. In that India becomes a preferred destination for the view of this, the Government has outlined ‘youthInternational and Domestic travelers. focused programs’ and there are institutions that
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My Fortune Bengaluru Fortune Select Excalibur, Sohna Road, Gurgaon
Branded budget hotel chains driving online bookings, says Google travel trends report Buoyed by the growth in online bookings, existing and new hotels are going to add 10,000 new rooms to the online inventory in 2016, reveals the Google report. In terms of outbound travel, leisure segment is likely to lead the industry’s growth as niche travel destinations gain traction in the outbound. By TF Bureau
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n a report compiled by looking at search trends for both domestic and international travel sector for the upcoming holiday season, Google India reveals that branded budget hotel chains are driving the growth of hotel bookings online in the domestic hotel industry. With over 300 million Indians online and growing rapidly, hotel providers have been slow to catch on the digital bandwagon, with only 20 percent of total hotel inventory available online. Seizing this massive opportunity, several players including new and established players are, now, focusing on bringing quality budget accommodation online across the country.
With the availability of this new inventory online,Internet users in the country are lapping up the budget hotels online – which is evident in the growth of Google search queries. Branded budget hotel queries in India is growing at 179 percent year-on-year in comparison to just 36 percent year-on-year growth in generic budget hotel queries, whereas the overall queries for ‘accommodations’ as a whole is growing at 37 percent year-on-year, the report mentions. Speaking on the trends in the travel industry, Vikas Agnihotri, Director Sales, Google India, said, “Newer players in the segment have energized the travel vertical by unlocking a brand new inventory online. They have been quick to
capitalize on the online demand with aggressive advertising spends in building their brands, which is leading to overall category growth for the Industry. We expect this segment to continue to see massive growth with leisure travel expected to pick up in the coming summer holiday season.” Further analysis of budget hotels category reveals a strong preference for distinct brand queries i.e. users are going online looking for branded budget hotel chains. Budget hotel queries already account for 35 percent of total accommodation queries and a large share of 47 percent of search queries are for the brands providing budget hotel inventory online. In terms of top destinations
searched for accommodation during March to June 2015, Maharashtra, Tamil Nadu, Karnataka, Goa, Rajasthan, Himachal Pradesh, Kerala and Delhi-NCR have been the most searched destinations. Majority of these States have captured business or work related travelers, indicating that leisure destinations will be the next growth driver for branded budget hotel category, as today out of the top 50 searched domestic destination, only 30 percent of destinations represent leisure travel. With the growing demand for branded budget hotel, players are investing in creating a distinct brand positioning as budget hotel providers are likely to see faster growth compared to generic travel aggregators. As per industry estimates, the inventory in the budget hotel space is expected to grow further with, both, new and existing players are expected to bring up to 10,000 new rooms online this year. In terms of outbound data compiled on the basis of Google search queries between January to September 2015, 25 percent of search
queries were for international air tickets which was growing at 43 percent year-on-year. Meanwhile, 18 percent of search queries were for international accommodation, growing at 25 percent year-on-year. In terms of destinations, UAE, the USA and Thailand have been most searched international destinations with a healthy growth rate of over 35 percent year-on-year. Search queries also revealed that Indian travelers have taken a liking to niche destinations with Seychelles, Hungary, Czech Republic and Russia topping the list of fastest growing destinations in the top fifty searched international countries during January-September 2015. In terms of packages, honeymoon and romantic packages were fastest growing packages for holiday bookings growing at over 42 percent year-on-year, followed by vacation packages growing at 35 percent year-on-year. Adventure package segment, albeit a small segment, was showing healthy growth with search queries growing over 22 percent year-on-year.
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online : bookings.com
Booking.com set to grow its Indian inventory; domestic bookings in the driving seat Priceline Group CEO Darren Huston had recently commented: “India seems to have unending potential for us.” And going by the India-specific numbers furnished by Vikas Bhola, Area Manager (India Subcontinent), Booking.com, the company’s efforts to tap this ‘unending potential’ since 2012 has begun bearing fruits. By ritwik sinha
in Singapore), the volume of listed Indian properties was just close to 500. But since then, the sky is the limit, as is clearly visible oing by conventional wisdom, from the growing Indian inventory base for any major global OTA a mere of the world’s leading online accommoenlisting of 500 properties in its dation booking platform, which globally expansive worldwide inventory had earned a revenue of over 55 billion list could hardly be a trigger to adopt an last year (earning of the Priceline Group aggressive stance in any specific market. with the lion’s share of the contribution But if the market is of the size of India coming from Booking.com). The gigantic where internet penetration is on a rapid size and scale of the company is also rise and there is a visible surge in per suitably reflected by other capita earning, a contrarian approach can well come To date, we have been hard statistics: it has over into play, eventually paying able to scale and build a 860,000 properties (apart rich dividends. This is how thriving business in India from hotels, it includes apartments, villas, hostels, farm the Indian story of Bookwithout the large investments that come stays, bungalows, boats) ing.com (owned by the with advertising in its global inventory and US-based Priceline Group, campaigns. We have one of the leading internet been able to focus 100% averages a little less than a companies in the world with on the product and the million room night booked over $USD 63 billion market customer offering, we’ve every 24-hours. Priceline Group CEO cap), seems to be panning focussed on getting the best accommodation Darren Huston had recently out. When it had set up base options and availability commented: “India seems to of its own in the country in for our customers. have unending potential for 2012 (prior to that the Indian us.” And going by the Indiamarket was handled by its specific numbers furnished APAC regional headquarters
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vikas bhola Area manager (India subcontinent), Booking.com
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Today we have around 14,500 properties registered in India and this number is growing at a fast pace.
by Vikas Bhola, Area Manager (India Subcontinent), Booking.com, the company’s efforts to tap this ‘unending potential’ since 2012 has begun bearing fruits. “Our real story in India had begun in 2012 when we set up a dedicated team here and opened three offices in Mumbai, Delhi and Bangalore in quick succession. Since then there has been a whopping surge in our Indian inventory. Today we have around 14,500 properties registered in India and this number is growing at a fast pace,” Bhola told TourismFirst in a recent exclusive conversation. Talk to market observers and they will tell you that they’ve never seen Booking.com in any major above the line advertising or publicity campaigns for its business in India, compared to some of its esteemed rivals (both international and domestic). Vikas Bhola says the first and foremost objective of the teams operations was to create a substantial base in terms of inventory. “To date, we have been able to scale and build a thriving business in India without the large investments that come with advertising campaigns. We have been able to focus 100% on the product and the customer offering, we’ve focussed on getting the best accommodation options and availability for our customers,” he says. And even without a high-octane promotional drive, the platform has managed to strike a rapport with India’s domestic travellers almost purely via solid web marketing and a seamless, highlyoptimised and intuitive site. “When customers use Booking.com, they come to find The gigantic size and an incredibly scale of the company is easy-to-use, intui- also suitably reflected by tive platform with other hard statistics: it enhanced and has over 860,000 properties (apart from tailored products hotels, it includes for different types apartments, villas, of travellers to hostels, farm stays, anticipate specific bungalows, boats) in its needs and reduce global inventory and frustration.” averages a little less than a million room night “More than booked every 24-hours. the whopping growth in property count, what is more satisfying for us is the changing complexion of our Indian business. In early 2014 for example, more properties being booked on Booking.com were by international travellers. Since then, the ratio of international bookers to domestic bookers has dramatically changed, meaning we see more domestic bookings than international bookings. This is highly indicative of our growing popularity among local customers,” Bhola pointed out. According to Bhola, there are some other critical elements of Booking.com’s growing presence in India. While the company continues to provide a wide selection of leisure-centric accommodation options, it is also working to expand its business portfolio (a global strategy now). “Globally, nearly one in five bookings on Booking.com are made for business travel. The job of our team in India is to ensure we have the best options available on Booking.com for any type of travel need.” And secondly, unlike some of its peers, it has not shown any aversion to operate in the lower mid segment. “Our mission has always been a simple one – to help leisure and business travelers, whatever their budgets, easily discover, book and enjoy the world’s best places to stay. We follow the philosophy of responding to every demand that we can. And there is enormous scope in the business-travel segment,” Bhola underlined. The company has also forged partnerships with some popular new age aggregators (read the box piece) to spread its wings. In terms of inventory building in India, Booking.com in the last few years has primarily focused on India’s leading metros, particularly Delhi and Mumbai. Delhi along with its NCR zones has become the leading inventory pocket within India with over 1500 accommodation options. But after having built a base of over 14,000 properties, the company will now start to intensely focus on other important leisure markets in the immediate run. “We will be targeting to have more properties with us from leisure destinations in India like Goa, Kerala, Rajasthan and some of the popular hill stations in the country. Considering our growth trajectory in the recent past and the growing internet penetration in the country, we are confident we will dramatically increase our inventory this year,” he said.
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Quality Inn Manali
focus on choice hotels Comfort Inn Surat
Clarion Hotel Chennai
Sensitivity to franchise model; mid-segment feeds on domestic leisure, says Vilas Pawar In the franchise model, quality audit ensures consumer satisfaction, feels Vilas Pawar. He bats for a robust growth in the mid-segment market in years to come which, to his understanding, will be based on a thriving domestic leisure segment backed by a healthy mix of corporate travel.
☛ Ability to break-even on investments and higher returns important factors for a stronger midsegment market, feels Vilas Powar ☛ Hospitality industry first to score from the upswing in economy. Promises and sentiments must translate into deliverables on the ground. By shashank shekhar
“C
hoice Hotels is one of the world’s largest hotel chains. We have 24 hotels here in India. There are seven regional tier offices in India, and 17 international offices outside of the USA,” said Vilas Pawar, CEO, Choice Hotels India. He credited the growth of his brand in India, and globally, to a robust global distribution platform. “I must add that we have one of the world’s strongest distribution platforms,” he asserted. When asked about key pillars that drove hospitality’s business in India, he pointed towards a steadily rising corporate travel. In his opinion, most of the mid-segment hotels were banking on corporate travel for business, as much as 70-75 percent of the total revenue stemmed from MICE and
business travelers. “In fact, corporate travel is major contributor to hospitality industry – especially in cities with a vibrant business atmosphere,” he said. But, he also added that there was always going to be healthy inflow of business from, both, leisure and MICE. “The driving force of hospitality will vary, and will depend on the type of destination, and its potential as a center for business or leisure activities. It is difficult to pin-point one,” he argued. He, however, attributed business commitment and economic scenario as important factors for growth. Vilas Pawar agreed that as far as the general market sentiment was concerned, it was true that the general mood was upbeat. “But, to the dismay of many, we do not see many projects moving off the ground. Hospitality industry
is the first to witness any upswing in the economy; travelling begins at a faster rate which propels tourism. The general occupancy of our rooms shoot up and business gets brisk,” he explained. Adding that not much of it had happened as of yet, he, however, said “there is a positive sentiment since BJP has come to power, and yes there has been a marginal increase in business; we hope that the market sentiment will translate into more concrete business on the ground in the coming months.” He believed that the vilas pawar leisure segment was being ceo, Choice hotels india dominated by domestic travelers. And, it was likely As the economy gets more buoyant, to continue that way for domestic travelers will travel in the foreseeable future. larger numbers. Speaking for the mid-segment hotels, almost 90 “As the economy gets percent of the total business comes more buoyant, domestic from the domestic segment – which travelers will travel in larger itself testifies to the growing clout of numbers. Speaking for the domestic travellers. mid-segment hotels, almost 90 percent of the total business comes from the domestic segment – which itself testifies to the growing clout speaking, the mid-scale growth has of domestic travelers,” he asserted. been very healthy. Our hotels have Noting that there was a fair been clocking an average of 72-74 amount of movement in the midpercent occupancy. It is growing segment, he opined “personally leaps and bounds. I think it is also
to do with the fact that the cost of constructing a mid-scale property is significantly lower than a luxury property. Therefore, it is easier for investors to breakeven.” Further explaining the trend, he noted that as most of the mid-scale properties were expanding in tier-2 and tier-3 cities, so the cost of land was comparatively lower than metro cities. “All of these factors cumulate to give an edge to the mid-scale segment. Our own properties in places like Manali and Kumabakonam have been very well received, because the quality of service is appreciated. The quality audit which we do ensures a level of service that is virtually non-existent in those places,” he detailed. Coming to a larger issue, it is a prevalent notion that the franchise model is easier to operate than the management model. Still, the visibility and outreach of Choice Hotels remained comparatively low. Vilas Powar reacted to the argument stating that, although, it was easier to operate the franchise model, but the owners remained sensitive to the business model. “There are quality audits and other intricacies that may be reasons for a slower rate of growth. But, we have 14 hotels in the pipeline as of now, and hope to add some 20-24 by the end of this year. So, we are growing at a steady rate,” he concluded.
villas each with their own private plunge pools and the plush Rapti Mahal presidential suite, the lodge takes local traditions to a luxurious setting. Meghauli Serai has incorporated local hues into its design and operations for truly sustainable touches. From its Newari and Tharuinspired front doors and the use of natural earthy tones that reflect the landscape, to the locally-sourced ingredients that foreground Tharu tastes in inventive cuisine, the lodge offers a relaxing setting for discovery. Interpretive wildlife experiences allow guests to discover and enjoy the stunning natural beauty of Nepal. Safaris on elephant-back, by jeep and jungle walks give a whole new perspective on jungle life. Walks through the local Tharu village showcase traditional village life, where guests can learn the tricks of moon shining for traditional brews or get a taste of fresh home made Nepalese pickle. Canoeing on the Rapti river or trekking through the awe-inspiring Himalayan foothills will satisfy the adventure-seekers.
When it’s time to relax, nowhere is more suitable than with the signature spa treatments or by the cool water of the infinity pool, overlooking the tranquil flow of the Rapti river. Mridula Tangirala, Director of Operations at Taj Safaris said: “Taj Safaris believes that the best wildlife experience is interpretive and rooted in the local wildlife and community through a proven sustainable eco-tourism model. Our four luxury jungle safari lodges in Madhya Pradesh’s tiger country created India’s first luxury wildlife travel circuit. With this exciting opening in Nepal, we are looking forward to welcoming guests for immersive wildlife experiences in the ‘heart of the jungle’ at our newest destination, Meghauli Serai.” Meghauli is easily accessible from Kathmandu by road or by flight. It takes a short 20 minute flight from Kathmandu to Bharatpur airport, followed by a 45 minute or 30 kms drive to Meghauli Serai Jungle Lodge in Chitwan National Park. An alternative is to take a private charter from Tribhuvan International Airport in Kathmandu, to the Meghauli Airstrip in Chitwan. Helicopter charters are also available from Kathmandu to Meghauli Serai Jungle Lodge.
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What’s Trending
Wild side of Nepal gets a luxurious twist with Taj Safaris’ MeghauliSerai
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aj Safaris, the creators of India’s first luxury wildlife travel circuit in Madhya Pradesh, recently announced the opening of its first lodge outside India: Meghauli Serai atUNESCO World Heritage listed Chitwan National Park, Nepal. In a land of snow peaks and sherpas, yaks and yetis, monasteries and mantras, where ancient temples, shrines, palaces and monuments offer a glimpse into the past, Chitwan National Park is
a real jewel. Its dramatic landscapes of dense Sal groves, thick grasslands and meandering water bodies, coupled with the breathtaking wildlife, make it one of the most sought after destinations in Nepal. From its prime position nestled on the banks of the Rapti river, MeghauliSerai offers spectacular views of the park across the river from its 30 rooms and suites. Rohit Khosla, Sr. Vice President – Operations, Taj Hotels Resorts and Palaces said:“We are delighted
to extend the legendary Taj hospitality to guests in Nepal. The Taj group has a pioneering reputation for creating destinations and we are very proud to present the latest Taj Safaris’ Meghauli Serai Jungle Lodge at Chitwan National Park. We are committed to adding value to the community and the region.” A fusion of local and luxury elements From its 13 well-appointed rooms that offer elevated views over the jungle-scape to the 16 independent
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focus on w yndham g roup
deepika arora
Regional VP, Eurasia, Wyndham Hotel Group
Wyndham looks at minimum 60 flags in India by 2018 end After making a relatively slow start in India in 2000, the mid-segment global hospitality major Wyndham Hotels has made some quick moves in the recent years in expanding its footprints in the country. The company which operates through franchise model,claims to have a robust pipeline of new openings in the market and is aiming to have a sizeable presence in the country in the next couple of years. Deepika Arora, Regional Vice President (Eurasia), Wyndham Hotel Group shared details of the company’s growth agenda including the inorganic options which the company is considering in a recent exclusive conversation with TourismFirst. Edited excerpts: By ritwik sinha
L
et me begin with a simple question: how do you analyse Wyndham’s positioning in the Indian market today? The group is now 15 years old in India but is largely believed to have been a slow starter in the first decade of its operations in India.
I would say Wyndham’s position in India today is fantastic. Six yearsago , we just had a handful of hotel units – sixto e ight hotels. And now we have close to 25 hotels operating in the market. We also have about 47 units under different stages of construction. So we have an inventory of about 2600 rooms operating and 5000 plus under construction. Six years back, the most visible brand we had in the market was Ramada. Now we have introduced five more brands – Days, Howard Johnson, Encore, and Ramada Plaza. Ramada Plaza are typically in tier 1 and tier 2 cities, Howard Johnson and Encore are in Bangalore(opened three years back), Days units are present in Neemrana and Panipat and seven more are under construction. The Wyndham brand is a vacuum for us presently. We are also looking to launch Wyndham Garden which is a mid-market upscale brand. If we have to talk about growth in percentage terms in the last six years, we have seen 250 percent growth in our portfolio. Our ambition now is to move from a challenger position to a leadership position.
So has India become a critical point in Wyndham’s global scheme of things now? In the last five-six years, there has been a momentum which really
reiterates that India is one of the strategic markets for us. It is one of the key markets where they are looking to invest in human resource. Our team has commendably grown in size here. We are further strengthening our investments in India by looking at acquisition of existing management infrastructures. That would not only add footprints for us but also give us ready infrastructure to be offered to owners. We have been working very hard to promote some of our new technologies and doing a lot of promotion around our loyalty programme. Wyndham is really focused to ensure that we are in a position to contribute to the owners by investing whether it is through human resource, technology, training or any other facility that we want to do in India.
How many hotels you have in China?
In China, Wyndham has 1000 plus hotels.
What a difference…
The difference, as you rightly mentioned, stems from the fact that while we have been factually in India for over ten years, the growth momentum has picked up in only last five-six years. As against this, the growth was from year one in China. And that is why they have such a huge volume. There are other reasons too: in China, the supportive infrastructure is quite advanced. The construction timeline is m ucheasier. And we have two master franchisee there who contribute heavily to the inventory. But our number two market in Asia would be India.
How many openings are scheduled for this year?
This is an unaccounted number but I feel we will have close to seven openings this year. Our second hotel in Chennai (Days brand) is scheduled to be commissioned. Our first hotel in Darjeeling (Ramada property) and Trivandrum will be ready. Plus, we will have another opening in Bangalore. This will a Days property joining Ramada, Encore and Howard Johnson properties which are already there. With Days property, Bangalore will become the brand showcase city for us. A hotel in Kumbalgarh in Rajasthan targeting leisure traffic will also be ready. We also have an Encore property coming up in Lucknow as well as a Ramada unit in Jammu.
Realistically speaking, how many flags you expect to have flying here by 2018 end?
Realistically speaking, I think at least 60 percent of signed properties will get in the up and running mode by 2018 end. So we are basically looking at 35 odd hotels to begin operations in next couple of years. I think, by 2018 end we will definitely have 60 operating properties in India. We are very confident of this number because we have seen the delivery cycle in the last few years. We have been very conscious in choosing right owners. We are also conscious of the fact that we offer right product in the right segment in the right city.
What’s the scene on your interest in picking up equity stake in Sarovar Hotels? It is a much speculated move which you are likely to make to
consolidate your position. The company is reported to have been valued at Rs 500 crore and there have been some reports in recent past that you will be buying 30 percent stake in the company which belongs to investors. I would not like to comment on this. As I said in the beginning, we are looking at large management set ups which can be acquired. That is part of our growth model and with India being a strategic market, we would be looking at several investment options. But I can’t say on a specific case which you are talking about.
So you are neither confirming nor denying? I am not saying anything on this. I would not like to comment on industry speculation.
“MICE+W is the new trend in hospitality” How would you explain the recent market trends in terms of occupancy rates and other critical parameters? Plus, have you noticed addition of any new sub-plot in the hospitality business?
I am referring to some of the recent research reports which says that there has been an increase in occupancy rates to the tune of 3 percent which is now 62 odd percent from 2014 figures. There has been an increase in RevPars to the tune of 8 percent in the mid-market and budget segments. Most ofour properties are in the mid-segment and I have seen such growths happening. Another growth aspect which we have seen is coming from MICE which is not exactly MICE any longer but MICE+W with ‘ W’ standing for weddings. They are becoming very strategic contributors. F&B and MICE+W are increasingly becoming the dominant contributors. MICE+W, in fact, is the new norm in the hotel industry. The supply side last year was low. Only 7800 rooms were added in the organised hotel inventory. Out of this about 51 percent has come up in the non-metro circuits. And 27 percent was added in the leisure segment. There is a clear growth momentum in tier 2 markets and these are good signs for us. We are very optimistic about the convention and MICE+W business in India. If we focus in retaining MICE+W in India and not letting it go outside, I think 2016 will be a good revenue generator for us. So many destination weddings are happening in Bangkok and now even in Colombo. We can grab this business provided high taxation can be diluted. Considering this new trend, we are telling our owner partners to provision for large convention facilities. Our upcoming hotel in Lucknow will offer one of the largest convention spaces in that city. It will have 30,000 square feet of pillar less convention hall. It will have 102 rooms and will be ready by the end of this year.
“Mid-segment growing dominance has favoured our franchise model” The franchise model - is it the cornerstone of Wyndham in all markets? Or you have adopted it in India because you felt the need to grow at a faster pace?
It is a global strategy. The majority of Wyndham’s hotel are on franchise platform. It clearly gives you faster growth as well high momentum. There was no difference in our stance when we planned to pan out in India. For me it was quite challenging initially because I had come from a company which is a strictly management oriented hospitality firm. But I took up the challenge because I saw an upsurge in the midmarket segment happening in India about six years ago. A strict segmentation of hotels started happening. We capitalised on that segmentation, particularly in promoting the franchise model to owners telling them the precise benefits. With the mid-market segment getting more dominant, the inventory per hotel was also getting low. Hoteliers had begun planning 100-120 room units. That worked in our favour from a franchise perspective.
Puritans would like us to believe that in franchise model, it is difficult to manage the basic standards vis-à-vis when you are directly managing the property. How are you dealing with this issue?
This is a question I often get asked. And this is quite understandable because we are one of the leading franchisebrandsin this country. Yes, it is important to have consistency on the ground because your customer experience should be similar in RamadainDelhi or Ramada in Goa. We do have very strict processes to maintain that consistency. Of course, one aspect is to do the audits. So we do have one annual audit which is done by an external agency. But apart from that we also encourage our owner partners to produce monthly self-assessment reports. Another critical element of maintaining consistency is training. Unless you educate thehotel GM a ndstaff, how to run and maintain the hotel and make sure that the guests’ experience is at par with brand standards, you will never be able to achieve the consistency. And this is our key concentration.
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ficci seminar on technology
Indian Hospitality: In the midst of a tectonic technological shift
Hospitality is clearly the next big frontier for players in the online booking space. However, content improvement on mobile app and better collaboration between online intermediary and the actual product suppliers are some critical immediate challenges. By ritwik sinha
I
t could well be the extreme manifestation of the tectonic changes which technological leap can trigger to the hospitality business. The Henn-na Hotel, in Nagasaki, Japan, is slated to become world’s first man-less hotel when it opens its doors to welcome guests this summer. It will have robot staff (metal and silicone employees) who will speak in four languages – Chinese, Japanese, Korean and English and will take care of all those usual functions catered by a hotel unit. Initially, the hotel will deploy 10 robots staff manning different functionalities with a bare minimum human intervention. After the first few months of experiment, the manpower will be completely removed leaving the management affairs in the hands of the robots. Within the hospitality circles worldwide, the opening of this hotel is awaited with bated breath; how it eventually fares is the key point of interest. The proposed unit (result of technological experimentation for the last one decade) is broadly believed to be the counter version of smart factories which many leading industrial houses in the developed markets are toying with – units where the manufacturing process is taken care by the robot workers who can
changing market dynamics), their immediate challenges, however, are more basic in nature. Nevertheless, they are no less interesting given the pace at which they are happening covering diverse elements of the hospitality business – both in internal management as well as in connecting with the end-users at large. “Technology is taking over most of the activities of our life, tourism and hospitality are no exception. Internet boom and mobile applications are changing the hospitality business dramatically,” said Jyotsana Suri, Chairperson, The Lalit Hotels at the inaugural session of the Travel & Hospitality Tech Conclave recently organised by leading industry chamber FICCI in Delhi.
☛ Online hotel booking revenues in India is likely to hit $1.8 billion in the current year ☛ Mobile app for hotel booking is becoming the preferred tool; close to 45% of Expedia’s business in India came from their mobile app last year be controlled from remote locations (even from other continents). In a technologically advanced market like Japan, such high-end experiments are not rare. Something which can’t be aped in other markets quite readily. Nevertheless, it indicates the new dimensions which technology can add to the hospitality management. From the standpoint of the Indian hospitality business and technological shifts which are happening on the ground (as governed and directed by the
The event which comprised an impressive gathering of representatives from the leading tech companies as well as hospitality brought to the fore the core issue of adjustments to the technological wave which is sweeping across the Indian hospitality space. A report jointly released by FICCI and RezNext (a noted global name in the space of real-time enterprise distribution technology) presented a wider perspective in terms of emphasizing on the rapidity of the
technological changes as well as furnishing of the hard numbers. For instance, online hotel booking revenues in India is likely to hit $1.8 billion in the current year even as hotels in India have yet to leverage website as their most profitable channel of sale. The report underlined that the user friendly real-time applications and robust cloud offerings have demystified technology concepts and hotel companies need to adjust to the advanced functional modalities. In addition, the business travel spend is growing at a staggering jyotsana suri pace in the country and chairperson, The lalit hotels is expected to shoot up to $45 billion by 2019 which Technology is taking over most of the activities of our life, tourism and entails business hotels hospitality are no exception. Internet to cater to a much larger boom and mobile applications are technologically advanced changing the hospitality business clientele base in the dramatically medium run. The pragmatism of adopting dynamic distribution model has also been stressed in the report percent come through online sales in no uncertain terms. platforms. Hotel booking is believed The practitioners in the fray endorse the rapid-fire technological to be a more lucrative business for OTAs with assured margins of 10-15 changes theory which has ushered percent which is significantly higher in the business. “Five years ago, the than what they earn out of online OTAs were just selling hotels in a air booking. According to a market few locations. But now their hotel estimate, home-grown OTA major inventory has grown significantly,” MakeMyTrip is presently earning pointed out Prashant Rao Aroor, CEO, IntelliStay Hotels. The growing 45 percent of its revenue from hotel and packages and it wants to influence of OTAs in hotel bookexpand the share of its non-aviation ing is well reflected in the fact that business to 70 percent in the next currently 25 percent of hotel bookcouple of years. “It is bound to ings are made online of which 18
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happen. Revenues from hotel will overtake air booking in not so distant future,” confirmed Ritwik Khare, Senior VP & Head (Business Development), Hotels, MakeMyTrip. The moral of the story as a tech expert pointed out: “You are committing a major strategic mistake if you are not aligning with the leading OTAs, especially when you do not belong to a big brand stable.” “Things are changing so fast that even the term OTA appears out to be a misnomer now. If you are not aligned to the online transaction functionality, you might be living in a different age,” added Abhijit Beej Das, President & CEO, Boston East India Hotels. But even for online masters who seem to be in a rush to expand their hospitality portfolio, delivering on every promise made to the customers is a critical challenge which need quite a fine-tuning in terms of collaboration between the supplier and the intermediary. “There are some damage instances in the online hotel booking. Going by an industry estimate, about 9 percent of hotel bookings on online platforms are not confirmed by the hotels. We have to coax them to comply but even then about 1-2 percent of bookers do not get the facility they had asked for. As volumes grow, the suppliers and intermediaries will need to collaborate more tightly,” pointed out Akash Poddar, COO, Tsi Yatra.com. A critical churning currently underway in the online hotel booking space is the gradual shift from desktops and laptops to mobile applications for hotel bookings. According to FICCI-RezNext report, MakeMyTrip saw 53 percent of their overall domestic hotel bookings come through mobile phones in June 2015. Cleartrip has also seen tremendous growth in the mobile booking with 59 percent of its overall traffic and 46 percent of all transactions on the platform came from mobile, in Q2 2015. Yatra is estimated to be driving 30 percent of its revenue through mobile and has set a target to increase revenues from the mobile app to 50 percent in about 18 months. International channels like Expedia are also investing on their mobile strategy. As of 2015, close to 45 percent of Expedia’s business in India came from their mobile app. Even a rela-
Solutions available for making small hotel units smart
W
hen it comes to the accommodation options for travellers and tourists, Indian landscape is also dotted with thousands of small, independent and unbranded hotel units who may not appear out to be part of the mainstream. Nevertheless, they have their own significant role to play especially in the far-flung and smaller tier 2 tier 3 destinations. At a time, when the mainline hospitality segment is increasingly aligning with the technological churnings, one critical issue which is being debated within the larger tourism circle is: will there be any serious attempt from the small hotel operators to transform and prepare themselves for an increasingly growing tech-savvy clientele base? A challenging proposition, indeed, given their size and scale and their propensity to stay within confined limits but nevertheless an
imperative demand of the changing times. A panel discussion at FICCI’s Travel & Hospitality Tech Conclave extensively debated this issue and the key message of the deliberations was: with some decisive tweaking, independent and unbranded units too can become smarter in their operational approach and deliverables. “Technology adoption by unbranded hotels in India was bad not so long ago. But now with a digital revolution unfolding in the country and its larger acceptability, the small units can think of having a shot at the competition in the marketplace,” observed Abhijit Beej Das, President & CEO, Boston East India Hotels. “When it comes to technology adoption by the independent hotels, the trends visible are quite clear. There are those who have given up and then there is a category of small hoteliers who are fighting
back and they are doing it quite successfully. While fighting back, they are increasingly aligning with OTAs as well as personalization in their offerings,” added Avijit Arya, CEO, Internet Moghuls. A critical prescription for the small hotel units, as experts pointed out, is to create app platforms to extend their reach and keep their clientele base intact since it facilitates a regular touch. A not too expensive proposition, observers emphasized it is a must for serious independent units. “There are many case studies underlining the ways to make your app popular. And small hoteliers can do it. But they have to ensure that their apps remain a constant touch point for their visitors and not merely used for the booking purpose,” Arya pointed out. There are now also tech solution providers in the market who are helping the independent hotels to
develop their app at a reasonable cost (in the Rs 5- 10 lakh). According to Deepak Mavinkurve, CEO, Repufact, some other solutions are also available in the market. “Small hotel units can also align with SAAS-based platforms, which is an equally convenient option for them. They should not simply get carried away by the fancy words like app but should look at the best solution to get their small unit visible in a crowded marketplace,” said Mavinkurve. According to Kamesh Shukla, Senior Vice President, RateGain, small units should also be more receptive in technological adoption when it comes to internal management. “An integrated approach is a must and solutions are readily available in the market. There are systems for complete data collection pertaining to rates, distribution or even reputation which will
help small units in technological streamlining of their operations,” Shukla explained. A strong advise for independent units is to pay adequate attention to reputation management, a point where they are more vulnerable vis-à-vis branded units due to lack of combating communication power. “For small units, outsourcing this exercise is not an option. They must focus on user generated content as much as their resources permit,” opined Mavinkurve. And lastly, a strong advocation for small units to stay afloat is to keep innovating with their personalized offerings backed by adequate technological support system. “For smaller hotels, personalization is the key. And in the changing times, it means a blend of customization and automation. For instance, they can extend free wi-fi as an added attraction,” Avijit Arya suggested.
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ficci seminar on technology
tively newcomer like Oyo Rooms is registering more bookings through its app now. “Our app is not more than a year old. But today it is resulting in nearly 70 percent of all hotel bookings,” informed Ajay Shrivastava, VP (Engineering), OYO rooms. The robust growth in hotel bookings through mobile app is, of course, happening on a small base and is likely to consolidate with the growing internet penetration but players in the game point to some serious hurdles which need to be fixed expeditiously. “The mobile online hotel booking segment is witnessing the first burst of growth in the country. But there are some hurdles right now. For instance, small screen is a serious challenge. Reviews, which have become so critical for customers, have not been effectively designed for mobiles. This needs immediate attention because apps help in capturing personal preference data more efficiently” Khare underlined. Even a cursory crystal gazing for the near to medium run makes it clear that the technological wave influencing hotel business is slated to grow in intensity. Aggressive companies like Oyo Rooms which has carved a niche for itself in a very short period vis-à-vis its formidable peers believe that a larger part of the hospitality turf is still waiting to be covered. “As per our estimate, about 10 percent of the total hotel
room inventory is booked online in the country. There is remaining 90 which need to be tapped. The opportunity is simply huge. Going ahead, we are also going to witness the increasing commoditization and standardization of hotels where platforms like us will also play a role,” Srivastava explained. Another trend which is likely to become prominent in the near to medium run is allowing customers to frame their own holiday packages and here the hotels will have to ensure more visibility through aggressive online presence in collaboration with the technology service providers. A surprise element could well be GDS, traditionally aligned with the airline bookings, picking up expertise in hotel bookings too. “GDS are taking steps to build strength in hotels. Their operational mechanism has been very efficient for the air booking segment with the backing of IATA. They may well emulate similar modalities for the hotel business as well,” Sandeep Dwivedi, Chief Commercial Officer, InterGlobe Technology Quotient underlined. And then the operators of the meta-search enginews too have turned their attention to the fast growing Indian hospitality market (read the box piece). Quite clearly, the technological scene in the Indian hospitality space is unlikely to have any dull moment in the coming years.
Meta-search engines will bring in the next big wave
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he noted online travel agencies in India like MakeMyTrip, Yatra, Cleartrip, etc. were clearly the first bunch of baton holders of the e-tailing business which has assumed epic-scale nature now in the country with its spread covering general merchandise. The home grown OTA majors had first tagged along with the fast-growing aviation industry over the last decade and now are keen to replicate their aviation success in the hospitality segment as well. And this story has become more formidable with the global-scale OTAs like Expedia, Hotels.com, booking.com, etc. (most of them ensure more than half a million room night bookings every day globally) also increasing their presence on the Indian turf. And while all of them have a commendable portfolio of travel related products, a common string which they share is their focus on hospitality given the low online penetration in the segment. With airline booking reaching to a matured stage in terms of spread and reach, this obviously is the next big frontier for the internet companies catering to the travel space. The business of creating the robust online connect between customers and the hotel units in the country, however, is taking one more interesting turn with the growing interest of the operators of leading meta-search engines. And going by the industry buzz, they are going to bring in the next big wave in the segment of online hotel booking. “In developed markets like the US and the European Union, for every product there is a price-comparison meta-search engine. Meta-search engine has added a unique value proposition to online booking sphere. Though there isn’t much awareness about the difference between the OTAs and meta-search engines here in India now, the scene is poised to change. We will be playing
a much larger role in the Indian market in the coming years,” Paul Whiteway, Sales & Commercial Director (APAC), Skyscanner commented. In precise terms, a meta-search engine scores over the OTA by being the virtue of acting as one-stop shop where all contents of even OTAs (those who agree to collaborate) are shared with price-comparison. Loosely referred as “aggregators’ aggregator”, the USP of the metasearch engine is that it ensures that consumers do not have to visit too many OTA sites to look for options and pricing. “A meta-search engine is much like a Policy Bazar or Bank Bazar (financial market meta-search engines popular in India) where all the contents are aggregated and the products of all leading players are placed together. India is the perfect market for metasearch in operating in the travel and hospitality space. It is very much aligned to the basic quest of the price-conscious Indian consumers,” said Ashwin Jayasankar, General Manager, Wego India. Paul Whiteway Sales & Commercial Director (APAC), Skyscanner
Though there isn’t much awareness about the difference between the OTAs and meta-search engines here in India now, the scene is poised to change. We will be playing a much larger role in the Indian market in the coming years.
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Aloke Bajpai Co-Founder & CEO, IXIGO
Since we are only engaged in connecting the buyer and the supplier, we operate differently than the OTAs. For instance, we do not need to run call centers. We are more focused towards other innovation like providing chat services and multiple language facilitation to our visitors.
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But there is a basic distinction between the OTAs and the meta-search engines which give them independent corners to survive and thrive resulting in their collaboration. “The major issue is who earns the customers and who owns the customers? The answer is we earn the customer but if that customer prefers the offering of a specific OTA on our site, the OTA will own him. Unlike an OTA, we do not control the supply but only connect to it. It’s a win, win proposition for both us and the OTAs,” explained Nikhil Ganju, Country Head, Trip Advisor India. Trip Advisor, the global online travel review market leader, had also kickstarted meta-search offering three years ago. By the virtue of being the first and the last resort of product searching and price comparison, the business conversion rate is far ahead of the OTAs which is the major scoring point of the meta players. However, for OTAs, meta- search engines provide one more robust platform to sell their inventory. “Since we are only engaged in connecting the buyer and the supplier, we operate differently than the OTAs. For instance, we do not need to run call centers. We are more focused towards other innovation like providing chat services and multiple language facilitation to our visitors,” pointed out Aloke Bajpai, Co-Founder & CEO, IXIGO. To build a gigantic content base directed to serve any specific market, it is imperative for the meta-search engine operator to collaborate with the strongly positioned OTAs there. And according to meta-search operators like Trip Advisor, the process of joining hands has begun in the Indian market. “We aren’t facing a lot of resistance here. Our model has proven global credentials and we will do well in India as well,” Nikhil asserted. “Some Indian OTAs have begun working with us in the middle-east markets and we are hopeful such alliances will be forged for the domestic Indian travel products like hospitality,” added Ashwin. According to Paul Whiteway, considering the growing popularity of the meta-search platforms globally, the stakeholders owning and operating products themselves have begun asking for their positioning. “Considering the high conversion rate, the value proposition offered by meta-search engines is too compelling. It is a profitable proposition for all partners. Globally, some noted airlines and hotel groups are strongly backing these platforms and in a fast-growing travel and hospitality market like India, the scene will eventually be no different,” he underlined.
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live at hosi/HICSA
Redundant school curriculum and diverse options for new entrants major challenges to talent acquisition, feel experts K S Bakshi Executive Vice President Human Resources, The Oberoi Group
It is important to ask ourselves what exactly are we doing as an industry to change the perception that hospitality is not a rewarding industry to work in, and that perception has come about it the last decade or so.
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Sanjay Bose VP - HR, Taj Group
By shashank shekhar
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ohit Dar, General Manager, Jaipur Marriott – who moderated the session on talent and skill development: the biggest challenge for today’s brands –asked the panel about what they believed was the biggest challenge for brands operating in the Indian hospitality in today’ age. K S Bakshi, Executive Vice President Human Resources, The Oberoi Group felt that there were two perspectives to look at the issue at hand. The first perspective was related to the market wherein they could discuss about the lack of quality in the manpower, but to his understanding, it was a rudimentary challenge. The more important issue was organization related – which could be managed better, he felt. “It is important to ask ourselves what exactly are we doing as an industry to change the perception that hospitality is not a rewarding industry to work in, and that perception has come about it the last decade or so,” he opined. He argued that the moot question was to find ways to catch them young and hone them to ensure that the industry had more skilled talent at its disposal. Sanjay Bose, VP - HR, Taj Group referred to changing landscape of the industry, thanks to globalization. “From early 1990’s to mid 2000’s, employment in hospitality industry was a rewarding prospect. Now there are just too
many options in diverse industries. So, new entrants have many opportunities to choose from,” he explained. Adding that talents coming from so called under-developed and under-exposed areas like the Northeast and Chhattisgarh were far more contributing to the industry, he stressed at the need for acquiring raw talent and polishing their skills. Anand Rao, GM, Learning Service, ITCHMI stated that ITC had a rich legacy of learning and development. He argued that in order to stay ahead of the curb there was a need to constantly look at development and reinvigoration of properties. He noted that the new age consumer was always in search for specialized services. “Today’s consumers will be tomorrow’s consumer, too. Therefore, we are always attempting to develop specialized Spa therapists, butlers, concierges etc.,” he said. Stating that their faculty spent time with students and shaped them better their consumer interaction, he said “ITC Grand Bharat has been a shining example of how management trainees could lift the consumer experience. I can tell you with pride that the consumer experience at ITC Grand Bharat has been nothing short of fantastic,” he said. Rohit Dar, who facilitated the session, asked whether it was time to relook at learning courses and, may be, introduce some short term programs. Natwar Nagar, Managing Director – South Asia, HVS Executive Search argued that there
had been a fundamental shift in the way employees approached their jobs. “When we joined, we were very grateful of people and processes. Today, new entrants are more focused on entitlement. The new age workforce will not wait for you. In order to address this mismatch of expectations and entitlements, the foundation at the ground level needs to improve drastically,” he noted. Adding that the industry must treat their management trainees with a semblance of dignity, he said “you just cannot treat your foot-soldiers in such a shoddy manner.” Pointing towards an unnecessary incubation period, he said that there was no need for a housekeeper to be trained for four years. He requested the larger industry to look into it. A major worry that surfaced during the interaction was the stagnant curriculum in hotel management institutes - which did not take into account the changed dynamics of hotel operation. When asked for a practical solution to this conundrum, and how the industry to could help schools achieve the desired change, Dr. Kamlesh Misra, President and CEO, Cordia Group of Institutions said there was a need to change the mindset of young generation and instead of looking at management trainees as a resource similar to other resources in the hotel, the industry needed to ensure that they were exposed to a wonderful experience. “They are the only
From early 1990’s to mid 2000’s, employment in hospitality industry was a rewarding prospect. Now there are just too many options in diverse industries. So, new entrants have many opportunities to choose from.
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anand rao GM, Learning Service, ITCHMI
Today’s consumers will be tomorrow’s consumer, too. Therefore, we are always attempting to develop specialized Spa therapists, butlers, concierges etc.
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Natwar Nagar Managing Director – South Asia, HVS Executive Search
When we joined, we were very grateful of people and processes. Today, new entrants are more focused on entitlement. The new age workforce will not wait for you. In order to address this mismatch of expectations and entitlements, the foundation at the ground level needs to improve drastically.
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Dr. Kamlesh Misra President and CEO, Cordia Group of Institutions
Restructuring training programs is a must. The focus must on proving the trainee a way to have a great experience. Of course, it does not mean that they do not work. It is more to do with the environment.
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resource with the ability to think. They, if used well, can be great assets for boosting business,” he explained. He underlined the need to accept that there was a problem and, then, to find ways to create solutions to them. “Restructuring training programs is a must. The focus must on proving the trainee a way to have a great experience. Of course, it does not mean that they do not work. It is more to do with the environment,” he substantiated. The moderator for the session Rohit Dar noted that although it was difficult to change the nature of work a trainee was into, but the experience that he had could certainly be enhanced. Dr. Misra opined that there had been no attempt to improve the curriculum at top hotel management schools which was reflected in the regression of the quality of faculty. “All of these have had a profound impact on the overall quality of employees,” he added. Another glaring issue was that the criteria for selection to these schools were volume led and not quality based, he felt. “Faculty is literally becoming obsolete. We as industry insiders must collaborate with institutions to help them better understand the desired expertise in training and development. A trainee must have an opportunity to directly interact with guests and not only be relegated to carrying out backroom chores,” he said. On the question of whether there was a lacuna in instilling the same levels of passion in work as seen by the last generation of employees, Natwar Nagar said that the approach to the staff itself needed a tweak. “We are so focused about the 20 percent of the management level employees that we lose sight of the rest of the 80 percent of the contractual employees who are the true brand ambassadors of our properties,” he explained. Speaking about the learning curve from best practices, K S Bakshi highlighted the need for complimenting monetary compensation with respect and learning opportunity.
Rohit Dar
K S Bakshi
Anand Rao
Sanjay Bose
Natwar Nagar
Dr. Kamlesh Misra
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live at hosi/HICSA Discussions that ranged from the future of F&B, changing role of general managers, to finding solutions regarding skill acquisition. Senior industry insiders shared their perspectives on the way forward.
Group discussions that provided a learning for delegates at HOSI
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Hotels can make a more active splash with the use of digital marketing opportunities In a dynamic environment, Indian hoteliers have plenty of digital options to expand their reach and engage their customers more effectively. By ritwik sinha
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his is probably the most glaring example of how an effective digital marketing campaign can dramatically push the business to a soaring trajectory. Airbnb, the US-headquartered alternative accommodation major which has significantly spread its wings across the globe in the recent years, saw a tremendous surge in the traffic on
At a time when hotel industry is looking at effective strategy to combat the online onslaught from the outside operators, Chopra strongly underlined that like other business streams, the hospitality industry too needs to have a holistic digital strategy and there are plenty of options available in the marketplace. “We are living in an age where 90 percent of the buyers trust peer recommendations. Facebook’s subscribers volume is
☛ Airbnb after releasing its video content on YouTube had seen a staggering 120% jump in traffic ☛ Hospitality players in India can make use of social media influencers to create right kind of buzz on their products its platform after it released a series of engaging video contents on youtube platform. “ Its video content had generated 450,000 views in four months and there was an increase of 120 percent in branded searches on its platform. It eventually helped in the bookings volume going up from 8 lakh to 2 million nights” said Pradeep Chopra, Co-Founder & CEO, Digital Vidya who addressed a workshop on digital marketing at HOSI convention yesterday.
more than the population of China and Linkedin is adding two new members every second. In such an environment, it is imperative that the hospitality industry should also embrace the 4Cs of digital marketing – creating, curating, connecting and culture. Internet and mobile offers various options to reach out to the larger customer base and engage them,” Chopra emphasised. According to Chopra, SEM
and SEOs on google platform are equally vibrant mediums to catch the attention of the customers in the social media sphere. “Search marketing is one of the most powerful digital medium and can be effectively used in the hospitality business as well,” said Chopra. With mobile and smartphones becoming the most important device, Chopra also pointed out at the options available for marketing. “Over 50 percent of searches on Google is now coming through mobile. That makes it imperative for the enterprises
trying to derive advantage out of it to adopt a responsive design of their content. For instance, their websites and even e-mail designs should be mobile compatible,” suggested Chopra. The unfolding revolution in the sphere of mobile applications could be another vibrant promotional platform for the hotel companies. “App based promotion is a growing segment. It certainly helps in generating more leads and is a potent tool for new customer acquisition,” underlined Chopra. Chopra also dispelled the ap-
prehension that getting aggressive in the digital space could result in your competitors keeping a tab on your every move. “Things have gone much beyond that. When Burger King launched whopper burger, it first resorted to its online booking on e-bay. The response was tremendous,” Chopra pointed out. He also had a specific word of advise for the representatives of Indian hospitality – make effective use of active influencers on twitters and other social media platforms in creating right kind of buzz on their products.
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Multi-tasking and the ability to grasp new ideas key to a successful new-age GM The role of a general manager has seen a profound change in the last decade. Increasing role of technology and enhanced consumer expectations demand a more hands-on approach to the role, believe industry insiders. By Shashank shekhar
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uch has changed in the hospitality industry in the past decades. The roles and responsibilities of General Managers have evolved in a major way. In the panel discussion that touched upon the true job description of GMs, the moderator Rohit Khosla, Sr. Vice-President operations, Taj Hotels Resorts and Palaces asked panelists about the changes that they perceived had came about in their jobs. Nalin Mandiratta, General Manager, Crowne Plaza Today Gurgaon opined that there were three areas that had seen tremendous change. “There has been a major change in consumer expectations which is a direct outcome of more options and players in the market,” he observed. He attributed the role of technology in providing consumers with larger number of choices which had triggered a never before competition in grabbing the attention of a discerning client. “The competition
☛ The days when a GM was looked upon as a larger than life figure are passé. Today’s GM has to be a multi-tasker. ☛ The GM must also give the desired creative space to his staff for them to be able to come up with fresh and insightful ideas to augment business. quotient has made us better in many ways,” he said. Noting that there were four components to a GMs job which were focusing on people, delivery channels, brand aspect which due to increased competition made it harder to maintain consistency, and the idea of responsible business which was driven by larger global exposure, he said “gone are the days when a GM was a ‘larger than life’ figure. Today’s GM is more hands-on in his approach and more connected with his team. He is more connected with various aspects of the business.” Raghu Sapra, General Manager, Hilton Mumbai International Airport shared that GMs were very selectively accessible to consumers and staff. “Today’s consumer is more willing to reach out to the General Manager, besides accessibility to team members is far more intense today,” he argued. He added that the key to be a good General Manager was to adapt long-term strategies with short-term goals. Siddharth Savkur, General Manager, Alila Diwa Goa opined that GMs could not be ringmasters anymore. “Fear is no longer a way to extract work from the team. They must act as facilitators to a great team, ensuring that they do their job well. It is also important to realize that the brightest of ideas do not generally come from senior most people in the hotel. Therefore, as a GM, one must be willing to have an open mind to new ideas and concepts,” he asserted. Sharing his understanding on the question at hand, Tristan Beau de Lomenie, General Manager Delegate Pullman and Novotel New Delhi Aerocity said that the changing profile of a GMs job came at a hefty cost. “In the plethora of roles and responsibilities shouldered by GMs which range from replying to e-mails, drafting reports and looking at business, we overlook the most important aspect of our work which is interacting with our guests. I think it is one of the biggest negative aspects of growth and development,” he opined. He argued that, as the job demanded multiple roles, a GM must be able to manage his time better. “It is also true that we are able to better understand the distribution network because of technology at our disposal,” he explained. On the question of managing consumer expectations, Raghu Sapra noted that today’s dynamic work environment needed a constant tweak of processes. How often do we add processes to ensure smoother operations,” he asked the gathering. Adding that the use of technology was paramount to ensuring an
active participation of the staff, he said “it will also ensure that we are able to match consumer expectations with desired levels of service.” The changes that have come about have also created a conflict between the idea of hospitality, itself, between traditional hoteliers and new-age staff which could impact the quality of service. However, Raghu Sapra noted that there was no complacency in the younger lot and they did want to learn the tricks’ of the trade. “They want to understand the bigger picture but in their own unique way. We must be able to help them achieve that without over-burdening them with our understanding,” he elaborated. Tristan Beau de Lomenie shared that the larger challenge was to market properties and required a fresh approach. “We are in talk with other hotels to market Aerocity as a destination because the visibility of Aerocity outside of India is just not there. And, if as GMs, we do not take the first step towards promoting our brand and destinations, which will help our businesses in the long run, then who else will,” he passionately noted. Siddharth shared the role of social
media in promoting resorts was as much as any other kind of properties. “There is a lot of research that is carried out by the guest before he finalizes his hotel. And a lot of it happens through the social media. The role of social media is so profound that a hotel’s social media outreach can be a deal maker or breaker,” he asserted. He added that guests were increasingly looking for personal messages on social media – which was such a transparent platform that there was no hiding from it.
Responding to the GMs role in aligning owner’s expectations vis-à-vis brand desire, Nalin said that it was necessary for GMs to engage with hotel owners to give them the full benefit of the brand. “Some owners’ want to do better than what a brand is positioned to do, but it is important to understand that today’s consumer is global in nature. He seeks consistency in service. Therefore, it is important to believe in the brand and business which will eventually lead to profit,” he said.
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Focus on accor hotels Novotel Shrems Resort Goa
Emerging trends in hospitality space: what every hotelier needs to keep track of Jean-Michel Casse, Senior Vice President - Operations, AccorHotels India region shares some of the trends in hospitality business with our readers. Also, how the group is adapting to these trends in their own brands for better exploitation of business opportunities.
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n an age of digital disruption, the rise of a new generation of savvy consumers, proliferation of newer brands and an increasingly competitive landscape, hotel groups need to move with agility and embrace a new level of dynamism to stay relevant. Continual evolution is mandatory to be able to meet with changing preferences of today’s customers. At AccorHotels, we work hard to be innovative and constantly reinvent our brand portfolio concepts to stay ahead of the curve. With nearly 50 years of know-how and expertise, we are committed to building the world’s most enviable collection of brands in the most powerful emerging markets, making our guests ‘feel welcome’ at each of over 3,900 properties spanning 17 brands.
consciousness has been preoccupied with the impact of the baby boomers and Generation X, but a new force is coming into focus. While not as copious, millennials are now more vital to today’s workforce than any other demographic and according to industry estimates, may be the largest spenders (on or at hotels) as soon as 2017. What does that mean for hoteliers? For starters, hotels need to define their strategies based on this demographic group’s personality traits and habits—they travel a lot; are early adopters of technology; like personalized interactions and are spontaneous. In fact, there has never been a demographic that is more connected, digitally savvy and demanding, wanting contemporary design, high quality amenities, smart technology
☛ Our brands meet the needs of millennials by being quirky, playful and fashionable. In India, we are soon launching ibis Styles in Goa, an international economy hotel brand with a strong personality and outstanding design features. Some of the tectonic shifts pushing our industry to newer boundaries range from the rise of the millennial traveller as the dominant consumer group in coming years, increasing usage on mobile devices & apps for more personalised hotel guest services and newer trends in food and beverage. These forces are driving hoteliers to rethink the way they do business. It is important to act now, and as Sebastien Bazin, Chairman and Chief Executive Officer, AccorHotels says, “AccorHotels is not going to be a spectator of its own life. We are an actor.”
Rise of the millennials For a long time, collective
and locally inspired ambience all wrapped into a single hotel experience. Consequently, hotels will want to please them with easy check-in and gourmet dining experiences at reasonable prices. In return, satisfied millennials will actively promote their businesses on social media channels (they value experiences, are eager and curious to the world). Our brands meet the needs of millennials by being quirky, playful and fashionable. In India, we are soon launching ibis Styles in Goa, an international economy hotel brand with a strong personality and outstanding design features. Characterised by lively colours, fun interiors and upbeat atmosphere, ibis Styles offers the right
It was a longstanding belief that hotels are late adopters of F&B trends. That meals are only about menus. But with the changing tastes of diners, these beliefs are making way for a whole new approach to F&B. Restaurants, bars and coffee shops are no longer just about food, but also about the experiences – networking, socialising and getting things done. environment to appeal to millennials. Simplicity, interactivity, quality and conviviality are the brand’s core values. Everything has been designed to delight our customers, to be moving and to arouse their senses. As real homes-away-fromhome, our hotels boast convivial and comfortable areas that invite guests to enjoy and exchange, thus promoting social interaction.
Influx of technology
Guests today are self-sufficient, tech-savvy travellers who are comfortable using apps or mobile websites. From buying flight tickets and booking a hotel room to hailing a ride and checking-in, it’s all possible with a click of a button. Hotels need to make sure their offerings are up-to-date and userfriendly, leveraging the latest in technology. From mobile check-ins to digital concierge services, the possibilities are endless. However, it is important to not let technology push aside the most important ingredient of a memorable stay experience –thoughtfulness and the human touch (that’s never going to change). For example, the AccorHotels mobile app offers an enriched experience at every stage of the customer journey.
Two days before arrival, we can let you know your room number, and then when you land, we tell you how to get to the hotel. When you arrive at the hotel, your key is ready. However, while technology permits a digital check-in, we still insist on an employee interface. That’s because we believe in establishing an emotional connect and extending an experience. We need to listen to our guests, and we use technology to allow for more time to do that, instead of doing away with physical contact. This is exactly how we envision our digital transformation strategy playing out.
Knowing customers better
Digital technology is putting customer relationships in the spotlight: customers are more and more connected, find out what other customers have to say before deciding where to stay, and are sharing their experience with a constantly growing audience. According to industry estimates, before booking a room, 95 percent of customers check other guests’ insights online. Therefore, listening to customers and actively providing feedback is becoming vital. For every hospitality player, it is
imperative to listen to customers and to learn more about them, to constantly improve the quality of the service they provide, to bring customers more appealing and tailored deals, to welcome them with a personal touch, and to stay a step ahead of their expectations. Our Voice of the Guest (VOG) program is a solid step in that direction. The customized online reputation management platform centralizes all customer feedback shared across the social web, and displays it in a clear and intuitive interface, breaking down an analysis of the content into semantic categories (room, food, service, WiFi, etc.) in more than 19 languages, helping us enhance our customers’ experiences and, more importantly, add an even more personal touch to the service we provide them with.
Disruption in Food and Beverage
It was a longstanding belief that hotels are late adopters of F&B trends. That meals are only about menus. But with the changing tastes of diners, these beliefs are making way for a whole new approach to F&B. Restaurants, bars and coffee shops are no longer just about food, but also about the experiences – networking, socialising and getting things done. AccorHotels is leading the change by converting our F&B outlets into “places to meet”, avenues where guests, whether they are staying with us or not, can socialise, eat and drink. We are treating them more like “living spaces” for our active and urban clientele, breaking the traditional codes of dining. The Connectivity Lounge at Pullman for example and the Gourmet Bar at Novotel and finally the Hub at ibis are all examples of this. Goes without saying that our talented chefs are focusing on avant-garde F&B menus embracing the best of what’s happening in the gourmet world.