VOLUME 3. ISSUE 8. SEPTEMBER 2014. RS 50
a cross section publication
DE S TIN ATION INDI A
CM Rajasthan with senior FHRAI office-bearers and delegates at the inauguration
THE BUSINESS OF HOTELS & HOSPITALITY
INDUSTRY GATHERS TO DEBATE BUSINESS TRENDS
As a forum for bringing senior industry leadership together, sessions such as these highlight business trends in the industry
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EDITORIAL
Volume 3 Issue 8 SEPTEMBER 2014
EDITOR’S NOTE
Editor: Navin S Berry
Managing Editor: Priyaanka Berry priyaanka@crosssectionmedia.com Features Desk: Anupriya Bishnoi anupriya@crosssectionmedia.com Shashank Shekhar shashank@crosssectionmedia.com Advertising: Saurabh Shukla saurabh@crosssectionmedia.com
Design: Ashok Saxena, Neelam Aswani Circulation: Chandra Tamang HotelScapes is published and printed by Navin Berry, printed at Anupam Art Printers, B-52, Naraina Industrial Area, Phase II, New Delhi - 110 028 and published from IIIrd Floor, Rajendra Bhawan, 210, Deen Dayal Upadhyay Marg, New Delhi - 110002. Editor: Navin S Berry, Tel: 91-11-43784444; Fax: 91-11-41001627. E-mail: info@crosssectionmedia.com This issue of HotelScapes contains 68 pages
Dear Reader, This month we cover the recent FHRAI convention held in Jaipur. It is an annual stock taking exercise for the industry. It also manages to focus on certain niche trends in the business that may be peculiar to the city where the convention is held. So, typically, Jaipur, heritage hotels and destination Rajasthan were in sharp focus. The state's chief minister, a great advocate for the tourism industry, was there to do the honours and also highlight what her plans were for this sector. Also, worth noting here was the sentiment echoed by the FHRAI president that a single year tenure was possibly too short for the incumbent to deliver. It is certainly true of him, for him, but so often we have had the wrong person in this job that everybody has been saying that a year is possibly too long! Works well for the right person to get a longer innings - Sherwani has been a good choice and has done much to maintain the dignity of this high office. Which also makes us wonder that by now, given the size of the hospitality industry in the country, shouldn't the attendance at our conventions cross a few thousands! Why not, this question needs an answer. Our industry meets across the spectrum have tended to remain closed door affairs - only those who are speaking tend to attend, and the minute they have done with their presentation, they tend to leave. Many other veterans just don't show up. In this issue, we bring you a quick snapshot of a brutally ravaged Kashmir valley, that only recently was beginning to regain its pride as the tourism jewel of the country. The aftermath is likely to prove tricky - we hope tourism and hospitality are not as severely damaged as is being feared - tourism is the mainstay of the local population, and its lifeline. Surveys are often tedious, but none is so eagerly awaited and welcome as the HVS survey, done annually along with the FHRAI. This survey, and this act of working together in tandem, is a trendsetter for India's tourism industry. It shows the industry association's enlightened approach to creating a perspective, a benchmark, for India's hotels across all important cities. We wish other industry associations in other verticals also spend their resources in creating similar surveys in their respective verticals - like for travel agencies, and for tour operators. Tourism is presently undergoing the ‘K’ crisis, with Kashmir in the north and Kerala in the south. One is nature’s fury and the other is man made. In both states, tourism is a leading contributor to the economy and both are under stress. We stand strongly behind the people of Jammu & Kashmir in the calamity that they are facing. We wish them speedy relief. Happy reading.
September 2014 • HOTELSCAPES 3
this issue In the news 6 Espa now opens at The Leela
50
44
Palace Chennai
8 Hotels in the Media Interview of the Month 10 Carlson Rezidor is actively
promoting its properties abroad to Indian customers
Destination India 12 Hospitality in doldrums as ‘God’s own country’ goes dry
14 Massive loss to infrastructure
assets in Kashmir Valley; tourism and, therefore, livelihood at stake
Taxation 16 Indian tax issues in hospitality FHRAI Report 20 FHRAI convenes in Jaipur for its
24
annual convention
22 Rajasthan CM, Vasundhara Raje,
32
highlights her tourism centric approach to development of infrastructure in the state
24 Heritage hotels: Are they getting their fair share?
28 Can all the stake-holders come
together, strengthen Brand India?
Industry Report 30 Global Hotel Prices accelerate for the fifth year in a row
32 HVS survey: industry trends and opportunities 2014
Trends 42 Hotels push for more revenue with half day concept
46 The contemporary war standalones v/s hotel restaurants
One-on-One 50 In conversation with a leader in the “coffee shop culture” in the capital
GM Speak 52 What it takes to run a hotel
property in the NCR region
Cuisine 54 Raw materials – what’s cooking inside the kitchen
4 HOTELSCAPES • September 2014
54 Business Travel 56 Hotels bid on comfort and
innovation to tap burgeoning business segment travellers
60 News Snippets: Domestic 62 News Snippets: International 64 Movements in the industry
40 Last Page 66 Opportunities that every hospitality industry stakeholder must know
Guest column
31 The evolution that’s no less than a revolution by Kanika Hasrat,GM, Courtyard by Marriott Gurgaon
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IN THE NEWS
ESPA now opens at The Leela Palace Chennai
T
he Leela has added another world product to its offerings with the opening of ESPA at The Leela Palace Chennai. This new spa is already the feature at The Leela in Chankyapuri, New Delhi, which has already proved a great success with guests at the hotel. The 16,000 square feet spa combines the best in wellness from the world-renowned ESPA with innovative design and celebrated art, making it a oneof-a-kind urban sanctuary. The spa in Chennai is among the first in the country to elevate the concept of Thermal Suites based on the ancient spa wisdom of Senus Per Aquam or healing through water. The expansive suites, separate for men and women, feature deep, dynamic vitality pools with lounge beds and body jets, shimmering glass mosaic steam rooms, state-of-the art circular oak-wood saunas, stimulating rain showers and luxurious relaxation areas. The hydrotherapies are recommended to prepare for a spa journey and bring the body to perfect synergy and equilibrium. Ensconced within the award-winning The Leela Palace Chennai and set against
6 HOTELSCAPES • September 2014
the azure blue seas of the Bay of Bengal and lush manicured gardens, the 12-room ESPA, designed by Jeffrey Wilkes of DesignWilkes and Madhu Nair of The Leela. Complete with highly skilled ESPA therapists, each experience has been carefully crafted with the world’s most luxurious products. ESPA therapists provide top-to-toe treatments for radiance, vitality and purification with spa products from ESPA of the UK. These products are worldrenowned for their botanical extracts and marine actives. All spa treatment rooms are designed with an exquisite taste of luxury and come with plush beds, private lifestyle showers, and a curated music menu for personal selection. The Private Spa Suite is a highlight of the spa which includes a living area with a glass sliding door that opens up to its own terrace overlooking lush gardens, intertwining luxury and nature effortlessly. Guests can easily spend the day discovering their own secret retreats – sleep pods, relaxation areas, and tea lounges – all designed with plush fabrics in neutral shades and sumptuous textures; a state-of-the-art
fitness studio with the latest Technogym equipment and a stunning swimming pool, invite guests to continue their ultimate spa experience. The spa’s grand design and bespoke furnishings blend in harmoniously with the hand-picked collectible art pieces by celebrated artists - Siddharth Dhanvant Shanghvi, Alex Davies, and Chameli Ramachandran – adorning the walls. Different interpretations of Lotus motifs and gleaming linen drapes complement a sophisticated palette of Turkish marble, natural Travertine stone, crystal glass, upholstered wa lls, a nd da rk wa lnut timbers. In addition to a comprehensive menu of results driven body treatments, facials and massages, a selection of treatments have been created especially for men, such as the Purifying Facial and a 60-minute Deep Muscle Massage - which includes a powerful combination of stretches and therapeutic massages. Personal trainers and private yoga sessions are also readily available. The Spa Manager at ESPA is Anuj Singh. HS
HOTELS IN THE MEDIA
The buzz in the hospitality industry Royal Orchid scion strikes deal for 2,200 hotel rooms
Indian Hotels Company Ltd pulls out of Moroccan hotel management deal
A
I
rjun Baljee led-Peppermint Hospitality has aggregated close to 2,200 operational hotel rooms across the country with the acquisition of Bangalorebased Boutique Hotel Management & Marketing Services Ltd, which has 60 hotels in its portfolio. The deal gives 34-year-old Arjun, the elder son of Royal Orchid Hotels founder Chender Baljee, access to standalone hotel properties that have an inventory of 30 to 60 rooms each and gives him elbow room to push Peppermint brand across multiple market segments. While the bulk of the aggregated hotel inventory is located in south India, largely in Kerala, just 12 hotels are located in the north and other parts of the country. The Indian hospitality sector is divided among the big hotel brands and a string of individual hotels, which form around 80% of the sector's landscape. "The brands have pricing power, purchasing power and access to guests that the individual hotels simply don't have. And, this inequality had to be addressed," Baljee told TOI explaining the contours of the deal. He launched Peppermint with the first hotel in Gurgaon in 2010. Peppermint Hospitality has five operational hotels and is present in overseas markets of Florence and United Kingdom that are operated through the management contract route. At present Baljee is evaluating what quantum of those 2,200 rooms could be branded under the Peppermint umbrella. Baljee operates four brands - Peppermint Hotels & Resorts, Candy by Peppermint, Peppermint Reserve, and Peppermint Residences. "Peppermint has disbanded the traditional idea of the management contract and will work with all hotel owners on a performance-led, need-based management contract model," Baljee said. Each property would be attended to with a combination of services such as marketing, management, procurement, and technical collaboration that would be tailor-made to the needs of individual hotel owners. Baljee said that some part of the aggregated room inventory would only marketed by Peppermint without the brand lending its identity The Times of India
8 HOTELSCAPES • September 2014
ndian Hotels Company Ltd, the Tata group-owned hospitality flagship, has pulled out from managing Taj Palace Marrakesh in Morocco in just over a year of taking over the mandate. “Taj Hotels Resorts and Palaces will cease to manage Taj Palace Marrakesh, owned by the private Moroccan company, JK Hotels, with effect from September 10, 2014,” IHCL said in a statement, adding, “We continue to pursue our individual goals and vision. We wish JK Hotels all the very best for the future.” The company has not given any specific reason behind the decision. Taj Palace Marrakesh was launched in July 2013 under a management contract with JK Hotels. The company, last year, dropped its plan to acquire Bermuda-based Orient-Express Hotels, after pursuing the offer for over a year. The decision offered relief to company’s debt situation. In July this year, Samsara Properties, an offshore wholly owned subsidiary of IHCL, sold off its BLUE Sydney hotel to the Hong Kong based Hind Hotels & Properties Group for Australian $32 million. In a statement release at that time, IHCL had said, “The divestment
has been undertaken as part of the Taj group’s strategy to focus on markets which are core to the group’s operations, and to create liquidity to fund the company’s ongoing expansion in such markets. Asia Pacific, and particularly China, have been identified as targets for expansion.” The company’s overseas properties is showing signs of recovery. In the annual report 201314, IHCL said, “During the year, the company continued to face a challengingenvironment not just in the domestic market, but also across
the key international markets wherein the company owns/operates hotels and/or markets that are a source of business for us. The company’s hotels in the US have shown an improvement in their turnover and margins despite the continued challenges faced by the US economy. The company is continuing on its focus to improve the profitability of its US operations on priority and selectively has invested money to renovate and upgrade its hotels in Sri Lanka and Maldives in recent years.” Shejal Ajmera, research head of market research firm Crispidea, “IHCL had signed the contract with a private Moroccan company to manage the luxury hotel in Marrakesh. This was a part of plan to widen the group’s overseas footprint. But they had exited from a Moroccan five star hotel under its management due to some financial problems.” The company has plans to add 30 hotels with 3,700 rooms and has committed `440 crore for the next three years. “We have also seen that the hospitality sector is still facing a challenging environment and due to significant increase in supply in the coming years the pressure will increase further,” she said. In a report released by ICICI Direct about IHCL’s first quarter result of the current fiscal, it said the company’s debt position eroded sharply from `2,055 crore in fiscal 2007 to `4,647 crore in fiscal 2009 due to major expansion in the US. Indian Hotels has since then taken steps to reduce its debt by raising money through rights issue and preferential allotment of shares. DNA
HOTELS IN THE MEDIA
Swiss tourists spend most on hotel rooms in India, French the least If hoteliers are rolling out the red carpet for the Swiss and the Italians, don’t be surprised. It turns out that they are the biggest spenders on accommodation in India. Visitors from Switzerland spent the most for stay in India with a rise of 17%, from Rs 7,321 a night in 2013 to Rs 8,590 a night this year. This was followed by travelers from Hong Kong who spent Rs 7,995 while those from Italy shelled out Rs 7,571. The Italians are also the most extravagant spenders, paying 36% more than last year. The French spent the least,
followed by visitors from Taiwan and Malaysia, according to a report by Hotels.com. Hotels.com is a leading online accommodation booking website with nearly 325,000 properties. The report analyzed 25 nations including important source countries for India like the UK, the US, Germany and France over January-June 2014 as compared to the same period last year. Travelers from the US spent Rs 7,121 in 2014 as compared to Rs 7,048 while those from Canada spent Rs 7,061 as compared to Rs 6,586 last year. All nationalities spent more
in India as compared to last year with the exception of Hong Kong, Japan, South Africa, New Zealand and Thailand who all paid much less for hotel rooms. The highest drop in spending was by the Thais, paying 9% less at Rs 5,761 while South Africa and New Zealand dropped by 4% to Rs 6,702 and Rs 5,951 respectively. The countries that have shown the highest increase in spending are Italy (36%), followed by Finland, up by 23% to Rs 7,108, Germany, up 22% to Rs 6,749 and Denmark, up by 21% to Rs 6,377.
According to tourism ministry data, foreign tourist arrivals in India between January-July this year were 41.15 lakh with an increase of 6.2% as compared to 38.74 lakh last year. Of this, the highest number came from the US (16.88%) followed by Bangladesh (14.69%), UK (12.66%), France (4.14%) and Sri Lanka (3.61%), earning $11.055 billion in foreign exchange. The Times of India
September 2014 • HOTELSCAPES 9
INTERVIEW OF THE MONTH
Carlson Rezidor is actively promoting its properties abroad to Indian customers HotelScapes gets in conversation with Raj Rana, CEO, South Asia, Carlson Rezidor Hotel Group and asks them about the ways of promoting their overseas properties to the outbound consumer, their observation in travel trends and where basically Indians are heading to.
Q &A Raj Rana
CEO, South Asia, Carlson Rezidor Hotel Group
H
ow are you promoting your overseas properties for the outbound consumer (Indian travellers)?
Carlson Rezidor Hotels Group regularly runs seasonally promotional campaigns tied to peak periods when Indian travellers are considering going on their vacations. Indian outbound travellers usually plan their holiday outside of India during the months of January to March and August to October. Accordingly during these periods, we develop specific promotions targeted at the India traveller showcasing our portfolio of hotels around the world. An example of this was the recent Sizzling Destination Campaigns which promoted destinations and of fered preferential rates throughout our hotels in Asia Pacific. The campaigns were focused on educating the consumer about the destination-specific experiences they could enjoy when staying at our hotels and offered them a choice of multiple locations such as Bangkok, Sydney, Phuket and Cebu. Marketing is done across various platforms including online advertising which gives the campaign higher visibility on the online space, electronic direct mailers and press releases. Hotels are also encouraged to localise the campaign, enabling the customer to learn even more about the hotel and the destination.
Indian outbound travellers include leisure destinations Cebu, Fiji, Beijing, Shanghai and Chongqing. We are also seeing an increase in Indians travelling on theme holidays such as cuisine tours, historical vacation or special interest travels such as cross country motor trips. Domestic travel remains a dominant part for travellers not only through corporate/MICE business but also leisure and religious tourism. Our NCR hotels such as Radisson Blu Dwarka, Radisson Blu Paschim Vihar and Radisson Blu Ghaziabad attract substantial MICE business as they have some of the best meeting spaces in NCR. There has been a boost in domestic tourists visiting le i s u r e de s t i na t ion s s uc h a s G oa , Mammalapuram, Shimla, Udaipur and Mussoorie where Carlson Rezidor hotels like Radisson Blu Resort & Spa Udaipur, Radisson Blu Resort Mammalapuram, Radisson Cavelosim Beach Goa and Country Inns & Suites Mussoorie have benefited from this increase in holiday travellers. Religious destinations such as Katra, Ajmer, Amritsar and Varanasi are also frequently visited by Indians while on holidays and our hotels such as Country Inns & Suites Katra, Radisson Blu Amritsar, Country Inns & Suites Ajmer and Radisson Varanasi are able to serve tourists visiting these pilgrimage centres.
W
H
hat is the trend? Where are the Indian travellers heading?
“
A recent survey reported that there is a more than 20 per cent increase in Indians planning to take a foreign trip this year as compared to 2013. Destinations like Bangkok, Phuket, Sydney and Melbourne still remain very popular with Indian traveller. Developing destinations for our
ow price sensitive are they?
Generally, Indian travellers are no different to other travellers when it comes to price sensitivity. They will seek the best value from a travel product which offers a unique experience. At the same time, they prefer a hotel brand that they are familiar with and that understands their travelspecific needs. HS
Domestic travel remains a dominant part for travellers not only through corporate/ MICE business but also leisure and religious tourism.
10 HOTELSCAPES • September 2014
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DE S TIN ATION INDI A
Hospitality in doldrums as ‘God’s own country’ goes DRY
The UDF government led by Oommen Chandy has opted for a new liquor policy, which proposes banning liquor in the state, except for five star properties, eventually leading onto total prohibition in stages. The decision has caused worry in the hospitality industry as this move has the potential to damage a very carefully crafted image of Kerala, more so, causing a massive dent to its corporate clientele. What remains to be seen is how the hospitality sector will cope up with this decision in the days to come, that has taken the tourism world by surprise.
Kerala opts for new liquor policy, throws hospitality industry in a tizzy
In what could spell doom for the hospitality industry, in the God’s Own Country, the Oommen Chandy government has decided not to grant new liquor license to 3 star, 4 star hotels and the ban will apply on all bars in the state. The CM, under immense pressure from his own party chief in the state and alliance partners, such as the Muslim League and the Christian dominated Kerala Congress, has gone for the decision, which has been fiercely debated in various quarters. The government also plans to reduce the retail liquor outlets of the beverages corporation by ten percent each year, thereby, effectively, making Kerala liquor free by 2023. The CM’s website gives a detailed read of the impending policy, saying “Sanction will not be given to the 418 bars that are closed down and this will be applicable to the 312 functional bars (total 730 bars).” It goes on to say that the government is mulling on seeking legal opinion regarding this decision and after April 1, 2015 bars will be open only in 5 star hotels. This move, which surprised many, is in stark contrast to the economics of the state, which, primarily, thrives on the triad of levying taxes on alcohol, in-bound tourism and of course, remittances from millions of Keralite workers dotting the Gulf countries. The share to the exchequer from alcohol sale amounts to a significant 22% of Kerala’s revenues while another 26% depends on tourism, both domestic and foreign in-bound. The bar hotel industry, meanwhile, directly employs 25,000 people and contributes a business of Rs 1,500 crore. More so, over 15 foreign million tourists visited Kerala last year and helped generating revenue of over Rs 22,000 crore in 2012-13. All of it, and more, is in jeopardy. The move has been vehemently criticized by the industry veterans and they have asked 12 HOTELSCAPES • September 2014
the CM to reconsider his decision. “It is true that nobody comes to Kerala to drink, but if liquor is prohibited the very survival of the tourism industry will be at stake. The liquor ban will do to the industry what the 9/11 and 26/11 could not do,” said Jose Dominic, Managing Director, CGH Earth Group. He argued that this move could have adverse impact on the arrival of foreign tourists and consequently on the hospitality industry, as visitors could take to other such destinations, nearby. He said, “Social drinking is a part of the culture of foreign tourists. If that facility is not available in Kerala they will go elsewhere. Now, the government is deliberately risking an industry for political gains.”
Exempting 5 stars from the new liquor policy raises many eyebrows
While the government’s new policy, which exempts 5 star properties from the blanket ban on hotels and allows them to serve liquor is also being criticized as a complete reversal to the
very model of experiential tourism, which gave Kerala, the international repute it so enjoys today. Dominic concurs, he says, “By allowing only the five-star hotels to serve alcohol, the Kerala government is completely contradicting its own model, which promotes experiential tourism by adopting the state's lifestyle, architecture and stays across rural Kerala. This model has brought Kerala national as well as global fame.” W hile, E . M . Najeeb, President , Confederation of Kerala Tourism Industry, too, voices his concern over the new policy saying that it will be discriminatory to the smaller hotels, which are much larger in numbers and adversely affect sustainability of the state’s tourism. “The present policy of allowing liquor only in five star hotels is not helping the tourism sector as majority of the hotels are below the five star segments. Out of the 2,000 and above tourism hotels, there are only 22 of them having five star classification,” says Najeeb. He further says, “The non-availability of the liquor facility to the tourists in the hotels due to the new policy will definitely
DE S TIN ATION INDI A
Oommen Chandy
Jose Dominic
E.M. Najeeb
Chief Minister, Kerala
Managing Director, CGH Earth Group
President, Confederation of Kerala Tourism Industry
“We are more concerned about the ill-effects of liquor in society. Hence, we will face all consequences of the new liquor policy, including revenue loss.
By allowing only the five-star hotels to serve alcohol, state is completely contradicting its own model of promoting experiential tourism by adopting the state's lifestyle, architecture and stays across rural Kerala.
The non-availability of the liquor facility to the tourists in the hotels due to the new policy will definitely create a negative impact and will affect the sustainability of tourism in Kerala.
create a negative impact and will affect the sustainability of tourism in Kerala. Also, it is discriminatory on our part that tourists visiting Kerala are not allowed to use the facility at their hotels while the liquor is available in plenty in the shops for the common public. By banning the facilities only in the hotels we are destroying the biggest industry as well as harming the investors.” The move is already showing its impact with corporate players such as luxury watch-maker Rolex amongst others already reconsidering alternate venues for their scheduled events and programs. More affected are also likely to be the MICE segment travel with most of them now considering locations like Bali and Sri Lanka. However, braving criticism, the CM remains defiant and was quoted during a function, “We are more concerned about the ill-effects of liquor in society. Hence, we will face all consequences of the new liquor policy, including revenue loss.”
its decision and suggested measures that can best salvage the situation. The suggested measures include, giving license to classified and approved hotels, resorts, home stay, house boats and restaurants to serve beer and wine, apart from allowing tourism license for the liquor sales in classified or approved hotels in the tourist destinations on the basis of luxury tax remittance or foreign exchange earnings. In a bid to salvage the earnings from MICE and conventions, it has been suggested that the state government could provide special one day permits to convention and MICE delegates at lesser fees. Also, on the list, is the demand for extending the implementation of the new policy till the year end March 2015 and removing the newly introduced dry days for Sundays as a majority of the conventions and meetings are weekend affairs.
more hotels and resorts all over the State, 1500 and above house boats and 1500 above home stays and is catering to a, staggering, 1.1 billion tourists, both national & International per annum. While the tourism industry contributes a hefty sum of Rs. 25,000 crore as revenue, which is 9.5% of the GDP and generates a quarter of the employment in the state. Most of it comes from hospitality, fuelled by, an unending number of curious travellers, seeking to explore the calmness of backwaters and nature with a drink or two. The decision will deter the tourists, especially, foreigners for whom drinking is a part of cultural upbringing. Liquor ban will only make them explore other destinations, which are plenty in numbers and are ready to make the most of this god sent opportunity. The moot question remains, whether the government buckles down under an overtly populist demand, driven by political compulsions or takes a decision which cares for the hospitality industry – which has had an immense contribution in making what Kerala is today. The hospitality industry watches with bated breath. HS
,,
Finding a working ground
Disturbed by this recent development, the hospitality and tourism industry has requested the state government to re-consider
,,
The way forward
It remains no secret that tourism and alcohol are the workhorses that have, so long, kept the state’s economy galloping. Kerala, in these years, has created a large inventory of more than 1,00,000 rooms with 2000 and
,,
by SHASHANK SHEKHAR
September 2014 • HOTELSCAPES 13
DE S TIN ATION INDI A
Massive loss to infrastructure assets in Kashmir Valley; tourism and, therefore, livelihood at stake
Tourism is the mainstay of the economy of the valley, and consequently livelihood, be it the famous shikara, Kashmiri carpets and shawls or the picturesque valley. All of it, and more, is at stake with J&K in the midst of its worst-ever recorded floods, which have destroyed infrastructure and defaced the valley. The extent and evaluation of damage will be undertaken as water recedes as the focus, for now, remains on rescue and soon thereafter, rehabilitation. It is a major setback for the livelihood of the locals, dependent on tourism and hospitality industry in the valley – which will take a long time to recover from this mayhem.
14 HOTELSCAPES • September 2014
DE S TIN ATION INDI A
Nature’s calamity
Kashmir was getting back on its feet again. It had managed to regain some of its lost glory with slowly rising numbers of visitors, after a difficult and a prolonged two and a half decade long period of insurgency and violence. All these gains are in jeopardy as J&K, ravaged by an infuriated Jhelum, is witnessing the worst flood in the past several decades. The bustling streets, once filled with visitors, remain submerged in neck deep water. Hundreds have been washed away, lakhs remain trapped, stranded on the roof-top
of their own homes, desperately seeking any form of assistance. The damage of the floods can be gazed from the fact that the state government was rendered completely helpless as the CM secretariat, too, remained engulfed in flood waters. PM Modi, after conducting a through aerial survey, did assure the people of all help saying that, “I would like to assure the people of the state that it is not their crisis alone, it is a crisis for the whole country.” The army and NDRF, which were immediately pressed into action, are working tirelessly, to evacuate people to safer areas, amidst fear of outbreak of water-borne diseases mounted with receding flood waters. The Chief Minister, while overlooking the disaster relief operations, told PTI that the focus still remained on rescue operations as 1.5 lakh people are still marooned. He said, “Our primary focus is on provision of relief like rations, medicines and supplies they require."
What caused the floods
The magnitude and the fury of the floods have dismayed one and all. The floods are a result of relentless encroachment on the river bed, some say. The ecologically sensitive valley, which incidentally, is capable of supporting only low-density of population, has been ravaged by developers and builders over the years. “The fear of flood has been staring Kashmir in its face ever since the city was built. Kashmir may be successful with Venice as a model which tries to work with nature.
It cannot succeed in opposition to nature,” wrote B.R. Singh, former Chief Secretary of Jammu & Kashmir in a newspaper article. He went on to say how the utter disrespect for the environment and unholy nexus of politicians, administrators and government engineers have create a perfect recipe for disaster. “The Wular Lake is subject to natural processes of sedimentation as the Jehlum River forms a delta while entering it. It’s been happening for a very long time and there is no way to stop it. The karewas are themselves are a result of sedimentation when tree felling was unknown. You have to look for real solutions to real problems, not imagined solutions to problems wrongly diagnosed,” he reasoned.
Economic woes stare as infrastructure and hospitality takes a hit
According to ASSOCH A M (The Associated Chambers of Commerce and Industry of India) estimates, floods have caused an immediate loss of Rs 5,400-5700 crore, well exceeding 10 % of the state’s GDP. The state, coping with the nature’s fury, has witnessed heavy damages to trade, hotels, restaurants, horticulture and handicraft besides a complete derailment of its high- cost infrastructure like the railways, power and communication in the hilly terrains with an estimated loss of R s 2,70 0 -30 0 0 crore according to the ASSOCHAM report. “These are only initial estimates of the loss. The real loss to the Jammu and Kashmir
“I WOULD LIKE TO ASSURE THE PEOPLE OF THE STATE THAT IT IS NOT THEIR CRISIS ALONE, IT IS A CRISIS FOR THE WHOLE COUNTRY. OUR PRIMARY FOCUS IS ON PROVISION OF RELIEF LIKE RATIONS, MEDICINES AND SUPPLIES THEY REQUIRE.” Prime Minister Narendra Modi after conducting a thorough aerial survey
economy will be much higher since the impact of such calamities are long-drawn and it takes long time before the physical infrastructure is restored. The biggest worry is the shattering of confidence among the tourists and it will take long time and effort to win back the tourists to the state – the lifeline sector,” ASSOCHAM Secretary General, D S Rawat said. Trade, hotels and restaurant services registered a turnover of close to Rs. 3,800 crore in the year 2013 to March 2014. While, the total loss suffered by the state in terms of agriculture production, trade hotels and restaurants, and roads and bridges is projected to be in the range of Rs. 2,630 crore. With the floods, a major chunk of state’s revenue are not only jeopardized, but the extent of the damage threaten to cripple it for a much longer period. While, the hospitality industry is facing a double whammy of mass cancellations and loss to its assets and related infrastructure. Waters have destroyed hotels and the hopes of a good season of employment and as the September - November season tourist inflow is getting severely affected as is being witnessed by large scale cancellations, both, from India and abroad. Cancellations for airlines and hotels are at an astounding 100 per cent up to October 15, while those who had booked for winters are choosing to wait and watch, indicates a feedback from the ASSOCHAM travel constituents. T he f lo o ds, u n for tu nate ly, coincided with the peak season for domestic travelers into J&K, which stretches from September end to the end of November. It is a difficult phase for a valley, with a massive loss to life and nation’s hospitality and tourism asset-which will need a firm political will, swift co-ordination among various agencies and a lot of volunteerism to recover from. HS by SHASHANK SHEKHAR
September 2014 • HOTELSCAPES 15
TAXATION
Indian tax issues in hospitality
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Noted tax consultants Khaitan & Company (hospitality group, contributed by their partners Sudip Mullick, Bharat Anand and Rajiv Khaitan) explain the implications of the current tax regime. Also, on how to remain on the right side of the law, while negotiating and implementing Hotel Management Contracts.
he application of domestic Indian taxation laws to payments made under a hotel management agreement (“HMA”) is a matter of great interest to both hotel owners (“Owner”) and hotel operators (“Operator”). Foreign Operators are concerned about their Indian tax liability. Indian Owners become concerned when indemnities and other provisions in the HMA transfer to the Owner the taxation risk on payments to the Operator by requiring the Owner to bear the taxation liability which often occurs. In this paper we outline the basic principles which apply under Indian tax law across a range of HMA business models used in India with the objective of enabling Owners and Operators to better understand the Indian taxation regime that applies and the risks to which they may be exposed.
Overview of Indian taxation regime
India adopts a residence and source based system of taxation whereby residents are taxed on their worldwide income and non-residents are taxed on their income sourced or deemed to be sourced in India. If a non-resident has a permanent establishment (“PE”) in India, whatever form that takes, then its Indian source income (i.e. income received or accrued outside India but attributable to the activities of the PE) will be subject to Indian taxation. Such taxable income is determined under the provisions of the Income Tax Act, 1961 (“IT
WHERE THE NON-RESIDENT IS FROM A COUNTRY WITH WHICH INDIA HAS ENTERED INTO A DOUBLE TAXATION AVOIDANCE AGREEMENT THE DOMESTIC INDIAN TAX REGIME WILL APPLY ONLY TO THE EXTENT THAT IT IS MORE BENEFICIAL THAN THE TAX TREATY. THE PROVISIONS OF ANY APPLICABLE TAX TREATY ARE VERY IMPORTANT AND RELEVANT IN DETERMINING THE LIABILITY TO TAXATION OF A NON-RESIDENT. MANY TAX TREATIES CONTAIN MORE BENEFICIAL PROVISIONS FOR NON-RESIDENTS THAN THOSE UNDER THE DOMESTIC INDIAN TAX REGIME AND THEREFORE, TREATY ANALYSIS BECOMES CRITICAL.
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Act”) and the non-resident is required to file a tax return like any other Indian tax payer. The tax rate applicable to the PE of a foreign company in India is 40% (plus applicable surcharge and cess) as opposed to the domestic company rate of 30%. Even in the absence of an Indian PE certain payments to a nonresident attract tax in India and there is a requirement to file a tax return reporting such income. The rate of tax depends on the nature of the payment. For example royalty and service fees payable to a nonresident are taxable on a gross basis at the rate of 25% (plus applicable surcharge and cess). Payments to a non-resident which are attributable to an Indian PE or in the absence of a PE other payments like royalty or service fees attract withholding tax at the applicable rates. If the payer fails to fully comply with its withholding tax obligation then there are adverse consequences for the payer including disallowance of business expenditure, recovery of tax required to be withheld, interest on the tax required to be withheld and penalties. Where the non-resident is from a country with which India has entered into a double taxation avoidance agreement (“tax treaty”), the domestic Indian tax regime will apply only to the extent that it is more beneficial than the tax treaty. Thus, the provisions of any applicable tax treaty are very important and relevant in determining the liability to taxation of a non-resident. Many tax treaties contain more beneficial provisions for non-residents than those under the domestic Indian tax regime and therefore, treaty analysis becomes critical.
HMA business models
There are a number of different models used in India to structure hotel management agreements and payments under those agreements. It is beyond the scope of this paper to cover them all here but it is useful to examine some of the more common models. Typically, the Owner, an Indian company, enters into an agreement with a foreign Operator which provides its management expertise and licenses the use of its brand and operating systems etc. (“IP”). Commonly the IP is not owned by the company entering into the HMA and in such cases the owner of the IP (“IP Owner”) may license the use of the IP to the Owner directly. The three most common HMA business models are as follows: Model A
An offshore company is the Operator and it is either the IP Owner as well or is licensed by the IP Owner to use the IP and it licenses the IP to the Owner and operates and manages the hotel in India. Model B
An offshore company is the IP Owner and its affiliate, another offshore company, is the Operator; the former licenses the IP to the Owner and the latter operates and manages the hotel in India.
TAXATION Model A
Model B
WHERE THE OPERATOR IS A NONRESIDENT (MODEL A & B), THE TECHNICAL ASSISTANCE FEES WILL BE SUBJECT TO WITHHOLDING TAX IN INDIA AT 25% (PLUS APPLICABLE SURCHARGE AND CESS) UNLESS REDUCED UNDER THE APPLICABLE TAX TREATY. WHERE THE SERVICES DO NOT ‘MAKE AVAILABLE’ TECHNICAL KNOWLEDGE AND SKILL TO THE SERVICE RECIPIENT, CERTAIN TAX TREATIES MAY COMPLETELY EXEMPT THE PAYMENT FROM TAXATION ALTOGETHER AND THUS, THE JURISDICTION OF THE OPERATOR IS DETERMINATIVE. Model C
An offshore company is the IP Owner and its Indian affiliate, an onshore company, is the Operator; the former licenses the IP to the Owner and the latter operates and manages the hotel in India.
Typical payments under HMA business models
The most common payment streams which will be found under each of these models are as follows: Construction & Development
Model C
• Technical Assistance Service Fees (for transfer of knowledge, technology and expertise etc.) • Expense reimbursements for technical service visits and related activities Hotel Management • Management Fees (base & incentive) • Fees for Service provided by Operator or affiliates (IT, reservations, training etc.) • Expense reimbursements (direct and indirect for example marketing fund contributions) • Royalty or license fees
Technical Assistance Fees
Where the operator is a non-resident (Model A & B), the technical assistance fees will be subject to withholding tax in India at 25% (plus applicable surcharge and cess) unless reduced under the applicable tax treaty. Where the services do not ‘make available’ technical knowledge and skill to the service recipient, certain tax treaties may completely exempt the payment from taxation altogether and thus, the jurisdiction of the Operator is determinative. Despite such fees being exempt (when they do not ‘make available’ technical knowledge or skill), by reason of any material presence of the Operator in India, whether through employees, representatives or otherwise, the Operator could be considered to have a PE in India. In that case, all income including technical assistance fees would be attributed to the PE and would be taxable in India at 40% (plus applicable surcharge and cess) on a net basis. This is a fact based September 2014 • HOTELSCAPES 17
TAXATION determination and hence it is important to be mindful of this when planning business operations. Where the Operator is an Indian company (Model C), technical assistance fees will be subject to withholding tax at 10% and taxed in the hands of the Operator at 30% (plus applicable surcharge and cess) as business income on a net basis. Credit for tax withheld is available to the Operator.
Management fees & related payment streams
In essence, the position with respect to these payments is as follows: Management Fees Management fees are taxable as fees for “technical services” on the same basis as technical assistance payment streams.
Fees for service by operator
Fees for service are taxable as fees for “technical services” on the same basis as technical assistance payment streams.
Royalty or License Fees
Royalty or License fees are subject to withholding tax at 25% (plus applicable surcharge and cess) unless reduced under the applicable tax treaty. Most tax treaties that India has entered into provide for much lower rate, ranging from 10% to 15% and in very few cases, 25%. Hence it is important to ensure that the royalty recipient is eligible to a tax treaty benefit. Management Fees and Fees for Service are not subject to withholding tax where the tax treaty between the state of residence of the service provider and India contains a provision that technical service fees are taxable in India only when they ‘make available’ know-how, skill, etc. However, in such a situation, it also needs to be ensured that the fees should not be connected with the business presence of the recipient in India in the form of a PE. Thus, factual determination is imperative.
Expense reimbursements
The application of withholding tax to expense reimbursements is a
THE DECISION WHETHER OR NOT TO COME ONSHORE ALSO DEPENDS UPON THE EXTENT OF OPERATIONS AND PRESENCE OF OPERATOR’S EMPLOYEES IN INDIA. IF THAT PRESENCE IS EXPECTED TO BE REASONABLY SIGNIFICANT, FOR EXAMPLE IF EMPLOYEES OR REPRESENTATIVES OF THE OFFSHORE OPERATOR REGULARLY VISIT OR STAY IN INDIA, A TAXABLE PRESENCE OR PE EXPOSURE FOR THE OFFSHORE OPERATOR IN INDIA WILL ARISE WHICH WILL RESULT IN TAXABILITY OF ATTRIBUTABLE INCOME AT THE RATE OF 40% ON A NET BASIS. 18 HOTELSCAPES • September 2014
contentious issue. The key question is whether there is a service element involved which is remunerated by the payer (even if only on a cost basis) or whether it is a genuine reimbursement of expenses incurred by one party on behalf of another. In the former case, even in the absence of a mark-up, withholding tax will apply while in the latter case there ought not be any withholding tax. Reimbursement of costs which are incurred by the Operator in the course of providing services may be treated in the same manner as primary fees and therefore be taxed as fees, although it may be possible to take a position that, where pure reimbursements are made under separate third party invoices, withholding tax should not apply.
Offshore operator V onshore operator
In determining whether the Operator should be offshore or onshore, the overall tax cost of the arrangement needs to be assessed and in this regard the following matters should be considered: For an offshore Operator, payments for services will be taxable on a gross basis (typically at the rate of 25% plus applicable surcharge and cess or a lower rate under the applicable tax treaty). This would be the final liability of the Operator in India. The Operator would not be permitted any deduction for expenditure incurred for earning this fee which can help reduce the final Indian tax. However, the Operator should get credit for the taxes withheld in India against its final tax liability in its home jurisdiction, subject to the local rules applicable to giving credit for foreign taxes. For an onshore Operator the entire income of the Operator will be taxable on a net basis at the rate of 30% plus applicable surcharge and cess after set off of related business expenditure. Even in case of an onshore Operator, the payer has to withhold tax on gross amount at the rate of 10%, but such withheld tax would be available as a credit against the final tax liability of the onshore Operator which is determined at 30% on net income. Thus, if the final tax liability at 30% on net income due to lower profit margin is less than 10% on its gross receipts, the Operator would be entitled to tax refund. Distribution of accumulated profits to the shareholders of the onshore Operator would attract a Dividend Distribution Tax (DDT) at an effective rate of approx. 20% and the dividends will then be exempt from tax in India in the hands of the shareholders. In case of an offshore Operator, DDT would not be applicable as it does not apply to foreign companies paying dividends to their shareholders in their home jurisdiction. The higher rate of tax applicable to the PE of the offshore Operator in India generally results in a lower overall tax rate than the overall tax rate on the onshore Operator who is subject to 30% tax on profit plus 20% DDT. The decision whether or not to come onshore also depends upon the extent of operations and presence of Operator’s employees in India. If that presence is expected to be reasonably significant, for example if employees or representatives of the offshore Operator regularly visit or stay in India, a taxable presence or PE exposure for the Offshore Operator in India will arise which will result in taxability of attributable income at the rate of 40% (plus applicable surcharge and cess) on a net basis. The most onerous issue in this regard is not the tax rate on net income but the determination of income which is attributable to the PE. Thus, where a taxable presence or PE exposure is anticipated, having the Operator onshore may be preferred.
TAXATION Tax treaty analysis is also critical since under certain tax treaties the withholding tax rate on fees for services payable to an offshore Operator could be a lower rate of 10% vis-à-vis the rate of 25% under the IT Act or it could even be reduced to zero where the services do not ‘make available’ technical know-how or skill. In such cases, an onshore Operator structure may be less tax efficient. However, the benefit of zero tax on services will be eroded where the service provider has a PE in India. Where PE risk is high, having an onshore Operator may be preferred.
Marketing contribution payments
Marketing contribution payments to non-residents, where tax was not withheld from such payments, has been litigated in India. The parties generally take a position that such marketing contributions for offshore marketing are not taxable in India either as royalty or as business income if the recipient foreign entity does not have a PE in India. The argument is that such payments are not for the right to use any intellectual property, know how or an intangible asset. It is imperative to ensure that the facts and the underlying documentation support this argument.
Transfer pricing
The IT Act contains comprehensive Transfer Pricing (TP) regulations which require that all the transactions between ‘associated enterprises’, one or both of which are non-residents, are regarded as international transactions and income arising from such international transactions must be computed having regard to the arm’s length price. Once the TP regulations are attracted, there are a series of prescribed compliance requirements that need to be satisfied. The TP regulations also describe certain relationships or circumstances under which two enterprises are deemed to be ‘associated enterprises’. One such circumstance is where business of one entity is wholly or substantially dependent upon the use of brand or IP owned by another. If the Owner and Operator can be regarded as ‘associated enterprises’ then compliance with the TP regulations would be required for ALL the transactions between them.
Onshore marketing expenditure
In recent times, expenditure incurred by an Indian entity in relation to advertising, marketing and promotion (AMP) has been the subject of significant TP adjustments with respect to arrangements involving an Indian party exploiting the trademark/brand name owned by a foreign party. In the absence of any specific law, the position is evolving on the basis of the judicial pronouncements. Where the tax authorities consider that more than reasonable AMP expenditure is incurred by an Indian entity, compared with entities engaged in similar business, the excessive expenditure is deemed as having been incurred in creating or maintaining a marketing intangible for the offshore entity. In that case, the Indian entity is regarded as having provided service to the foreign brand owner to enhance the value of its brand in India. In the absence of an arm’s length compensation for such service, the excess AMP expenditure along with an arm’s length mark-up is added to the income of the Indian Owner. The applicability of the TP regulations and impact on AMP expenditure incurred by the Owner should be carefully considered when entering into relevant agreements.
WHERE ONE OF THE PARTIES TO THE ARRANGEMENTS IS A NONRESIDENT, THE COMPLEXITY AND CONTENTIOUS NATURE OF TAX ISSUES ARE COMPOUNDED. BOTH OWNER AND OPERATOR NEED TO CAREFULLY EVALUATE THE TAX IMPLICATIONS OF THEIR HMA ARRANGEMENTS AT THE TIME OF ENTERING INTO THE RELEVANT AGREEMENTS IN ORDER TO MINIMISE THE RISKS OF UNEXPECTED INDIAN TAXATION CONSEQUENCES.
Cross Border personnel movement
This is another highly litigious area and may pose tax concerns for foreign employers. Where the expatriate continues to remain the employee of the foreign company and is seconded to the Indian company (Owner or onshore Operator) to perform his employment in India, two sets of tax issues arise: l taxability of the employee himself; and l taxability of his foreign employer. While the employee will undoubtedly be taxable in India unless covered by short stay exemption provisions contained under the Indian tax law or the applicable tax treaty, since the source of his income is the performance of services in India, the taxability of his employer is subject to significant uncertainty. Continued employment with the foreign employer can result in the employee constituting a PE of the foreign employer in India. Then the issue arises as to whether the employee is carrying out the business activities of the foreign employer in India or the activities of the Indian company to which he is seconded. In cases where a secondment arrangement is envisaged under the cross border agreements, this needs to be done carefully to ensure certainty of taxation outcomes for all concerned parties.
Way forward
From a taxation perspective, HMA arrangements need to be carefully structured and documented to deliver certain tax outcomes for the parties consistent with their respective expectations. Where one of the parties to the arrangements is a non-resident, the complexity and contentious nature of tax issues are compounded. Both Owner and Operator need to carefully evaluate the tax implications of their HMA arrangements at the time of entering into the relevant agreements in order to minimise the risks of unexpected Indian taxation consequences. HS September 2014 • HOTELSCAPES 19
FHRAI REPORT
FHRAI convenes in Jaipur for its annual convention. Industry gathers to debate on business trends
Lighting the traditional lamp and inaugurating the convention: CM with FHRAI president and other dignitaries.
Rajasthan is a key hub for driving tourism and rightly so, with its past splendour and imperial surroundings. In a recent convention by FHRAI held in Jaipur, various spokespersons spoke on what they think can be done to bring in more tourists to the state. Also, how some of the rigid policies of the government have actually slowed down the growth of tourism sector, remained the prime focus of the speakers. The conference saw resentment by various delegates, who were either disappointed with the governments’ archaic policies or expressed their concern on the lack of basic amenities for expanding tourism. Vasundhra Raje, Chief Minister, Rajasthan also shares her development plans for the state, where her prime emphasis lies with expanding infrastructure, as she considers it to be an essential pillar for driving more tourists. She speaks on what the government has achieved and what is yet to realise.
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his year was a bit shaky for the hospitality industry, wh ic h h a s f u r t he r affected the outlook of the hospitality sector. FHRAI, which happened this month in Jaipur saw a number of sessions by various spokespersons, where the problems faced by the industry were deliberated. The inauguration itself was power packed, where the key speakers including the Chief Minister of Rajasthan, spoke on the various issues and opportunities present in the state.
The FHRAI convention started with the speech made by Girish Oberoi, Vice President, Federation of Hotel & Restaurant Associations of India, where he talked about the untapped potential of Indian tourism a nd how it ca n do wonders for Indian economy. He said, “this year we are gat her ing at a t ime, where we ref lect a pivotal point of Indian hospitality and perhaps at no other juncture there has been such national consensus of nationa l tour ism, which
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has untapped vast potential, that explains our country ’s transformational future growth. Also, to reposition and revitalise brand India, it is imperative that as an industry we must think beyond incremental growth – and instead, target a giant leap forward. Tourism has an immense s cop e of c reat i ng job s a nd sustaining livelihood for many and thus help India realise its economic growth. By catalysing social economic empowerment, tourism will be a critical driver.
But, I would also like to add that our sector needs the support of policies, both at centre and state level. S.M. Shervani, President, FHR AI seemed a little disappointed about the enormously low global market share in world tourism. Also, he explained how the idea of Kerala government of shutting down bars had disturbed him and he appealed to the government to take a pragmatic step. Shervani began his speech
FHRAI REPORT
A warm welcome from delegates for the chief guest.
by tracing back the history of FHRAI. He said, “The founders of FHRAI founded this association with just 13 members in 1955, today we have 4000 members and that makes us the largest hotel association of the country and third largest in the world. As we get ready to hold the 49th annual FHRAI convention, it must be a tribute to our founders whose vision has made us what we are today.’’ Despite of all the disappointments that he had, he still delved deep on the India's rankings in world tourism. He said, “We are fortunate to have rich culture and national resources in abundance, which has an ample potential to make us a leader in the global tourism. As per The Travel and Tourism Competitiveness Index 2013, while we rank 21st out of 144 countries in travel and tourism, human cultural and natural resources, in policy and regulations we rank 125.’’ Yet, he shared his concern and says, “our figures of foreign visitors is 6.8 per million, while, our global market share in world tourism is only .64 per cent.’’ He further added, “It’s time to reflect how to meet our challenges. I am sure if, we make positive changes and policies, and we will be able
to accelerate this growth rate. I would like to share that we all from FHR AI were dismayed when Kera la gover nment announced the shutting down of bars, except for five star hotels. If we need to move forward, to compete with the best in the world, it’s important to have pragmatic approach in whatever we do. It is FHR AI’s honest request to the government of Kerala to take a pragmatic and a long term decision.’’ Some of the recommendations that he made to the government were: • Need for low cost funding • Eliminating multiplicity of taxation • Developing single window While thanking the government for the landmark decision to introduce E visas for the tourists, he also expressed FHRAI’s strong recommendation that the citizens of majority of those countries, which constitute top 15 source markets for FTA’s in India, should be eligible to avail this facility – within the first phase of this launch in December. Rajasthan, the destination where 49th convention took place this year, was itself a land of tourists. Rana Kapoor, MD and CEO, Yes Bank validated this
and said, “the state of Rajasthan is the most frequented state by the international tourists. We know the rich heritage, the culture showcases, the vibrant, colourful, creative design of the city resonates with all of us. Six of the world global heritage sites are from the state of Rajasthan. This state is becoming a new benchmark for the country as far as economical friendliness is concerned.” The state has also witnessed huge i mprove me nt s i n t he business scene. He said, “Tourism and hospitality today is an amalgamation of services across a variety of services like transportation, logistics, F&B etc. Importance of tourism driven by tradition is important as we go forward. But, as said before, the FTA’s still remain low. In Bangkok, they created the airport as a transportation hub, which acted as a game changer. This airport became the second largest hub, for tourist movements. We must learn from such things and do things on the same lines,” he added. Since India is emerging as a destination for various kind of tourism, Kapoor didn’t fail to mention how India has magical opportunities for harnessing the power of spiritual tourism like Buddhist tourism. “Buddha was
born, (and) enlightened here, on our land. Today, Buddhist tourism is the richest tourism in the world. We have to build imprints to attract tourism. We have to create an exclusive impression on the travellers, on what they can get with their visit to this holy hand. This is a golden opportunity. Also, I am sad that we are dealing with archaic issues every day like that of tax.’’ RV Deshpande, Minister for Higher Education, Education D e pa r t me nt , a nd To u r i s m Department explained the pivotal role of tourism in generation of employment. He also asked the delegates to reflect and deliberate up on t he s p e e c h m a de by Narendra Modi, Prime Minister, about how he himself believes that the tourism sector is crucial for the overall development. “Rajasthan’s niche lies in the tourism sector. Tourism sector as a whole for the county is of prime significance and that was apparent in the speech by the Prime Minister of India. It has happened for the first time that a PM has referred to ‘tourism’ as a key factor in the overall growth of the country. Also, while saying that I would like to add that all the developments related to growth, especially infrastructure, that helps boosting tourism cannot happen w it hout budge ta r y support from the government. Tourism is the sector which can develop large-scale employment. Also, we can generate revenue via tourism. Travel and tourism are the fastest growing sectors.’’ Rana Kapoor emphasised the importance of well-educated and “smart guides’’ and the need for formal training in different foreign languages. He said it was important to ensure that the tourist gets the best value for his money and doesn’t shirk from coming back to our country, which as we all know has so much to offer. HS by ANUPRIYA BISHNOI IN JAIPUR
September 2014 • HOTELSCAPES 21
FHRAI REPORT
Rajasthan CM, Vasundhara Raje, highlights her tourism centric approach to development of infrastructure in the state
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It’s after 16 year that you are back here again. I hope some of you, who were here last time, must have seen some changes. When you look at India and talk about tourism, Rajasthan and tourism are synonymous with each other. We have kept tourism right in the centre of our policies. It’s not about earning revenues, but we are also looking at supporting livelihoods. This sector needs to evolve continuously. What we thought was good ten years ago, is passé now and what we think is good today, will be passé tomorrow. We really have to be ahead of our times in all ways. In travel and hospita lity industry, success comes to those, who are able to keep ahead of all the ideas and time. Any traveller, who is making a trip to India, would like to live the experience and be a part of it. Here, we have a huge advantage that we can market and sell and we need to do that properly. There is landscape, handicrafts, music and dance,
food etc. But which state doesn’t have it and those who will do it differently, will make a difference. A satisfied tourist is actually our best publicist. He spends more and then he becomes a stakeholder in the improvement of this sector. So, what we are looking today for, is the long term sustainability of this sector. We have initiated a programme called ‘Heritage Conservation’. In these last few months, Rajasthan, particularly in some divisions (of the state), the government is tr y ing to put toge ther conservation efforts in some of the old major buildings and forts that we have. Government has recently been to two divisions, namely Bharatpur, Bikaner and now Udaipur. We are looking at the monuments and the palaces of Bhatarpur etc. These all have huge potential for attracting those who have interest in a slice of history. What we are trying to do is to create an experience, something that we tried to do with Amber.
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A monument is not just about old buildings, it’s more about an experience. It’s not about an old man and an old palace, those will crumble any way, and therefore, Amber is going to become a big experience with a living monument and I hope it is a success. We should be able to roll it out in the next two years. Rajasthan has also announced a scheme for roads, promotion and development. It ’s a PPP Programme for 20,000 kilometres of road and it’s something we expect to do in the next five years. And, I think it’s a start which is going to make a difference to us. People asked me why PPP? Isn’t it outdated today? In my last tenure, I had a very nice experience with Infrastructure Leasing & Financial Services and those are the roads in which we made some revolutionary changes. Looking after roads and maintaining them was not on the people’s agenda but we put it on ours and today that 1,000
kilometres of road has survived a full 10 years. People took to those roads and it has provided us revenue. We are working towards organising proper electricity. But, it’s really funny and surprising that even after 65 years, we are talking about such basic issues. These are the issues that people, abroad, take for granted. But, I think the time has come where we have to look at it very closely. We put this on our agenda because nothing can happen, until we have the right kind of infrastructure, that will invite tourism and tourists and that will organise investment promotion in any state. So, we are working towards that. Further we have nine tourism projects this year, which are going to go over 100 crores and I am going to work with Deshpande (Karnataka minister for higher education) because, it very important to allow states to grow in themselves, because of budget constraints and other issues. Let me come to another sphere
FHRAI REPORT of infrastructure, and that is aerial connectivity. It is surprizing that we still don’t have a flight from Jaipur to Agra, when both of these destinations are on the Golden Triangle. We talk about this but, till date, we are not been able to achieve that. Today, there is a linkage from Delhi to Jaipur, but I cannot take you from Jaipur to Udaipur and I cannot take you from Udaipur to Jodhpur. Well, I cannot take you from Delhi to Jodhpur and Delhi to Udaipur. There was a time, approx. seven years ago, that all of these were connected. I think I should keep this pointing out to the Ministry of Civil Aviation, as it is very important to connect all these destinations, because it gthen creates the tourism that we are talking about. Time has come to look at things, which are not just in the realm of main-stream tourism. Looking at village tourism, handicrafts, food, and spiritual tourism. And as far as spiritual tourism is concerned, we have some of these best temples
in Rajasthan. I also want to divert your at tention towards the ‘evening access’ to the monuments. T he r e i s no a c c e s s t o t he monuments in the evening. I was seeing some monuments which were beautifully lit up towards the evening but, we just could not go there and that’s the kind of beauty that people want to see. We need to be able to be actually organise new initiatives, bring new ideas on the radar, and we need to have people and programmes that will engage tourists in the day and in the evening- because if a tourist has come for leisure, what will he do in the evening? I am also happy to inform you that Great Indian Travel Bazaar, that we lost, with a little bit of the effort, returns to Jaipur next year. In 2007, we had a Tourism Unit Policy, which was a success but in July this year over 100 projects worth 7000 crores have been cleared. The revised tourism policy, which is going to come out soon, is going to concern primarily on issues like easy availability of land for
tourism units and actually bringing in serious implementations of provisions. We have plans to offer some help to heritage properties, and I believe that private operators, working with government and with these heritage properties can make a big difference and open a new field in tourism in Rajasthan. The capital assets created by the government could be managed by the private sector. One of the priorities of the government is generation of employment and tourism has a huge area of livelihood and also has an area of skill development programme. I think it’s very important to bring something on food, nutrition, all of the things that make hospitality business a success. Those things that you don’t see upfront, we want to work on them. We are getting to the root cause of the problem. There is huge scope for finedining and themed restaurants in Rajasthan. I have such a problem in convincing people to invest in restaurants here and I was
thinking what could be the reason? Is it because we do not have a proper policy here or is it because people are shy of government? When the government offers them something, they think twice about it. I have not been able to understand this. Some people who are in the restaurant field talked to me about it. We have niche little areas which are not really getting used. It would too nice to give these out for running or starting a restaurant which works morning and evening, where people would go for lunches, or maybe they are able to provide lunches to the secretariat only. I personally think this sector has lot of potential and I am personally taking care of it. Also, the good news is that the number of foreign tourist arriving in India that had dipped, has increased by 10 per cent in the past six months, compared to the same duration, in 2013. Perhaps, we are on the way up and with a little bit of help, we can do wonders. HS
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The current and futuristic view of the hospitality industry
M
anav Thadani, Chairman, HVS-Asia Pacific was the moderator for this session and he began his speech by saying that he has started seeing the signs of improvement in the industry. He said, “we have seen occupancies that are marginally going up. The supply that has been coming to the market has zoomed up. But it’s not as eminent as in the last few years, because new hotels are not much in under-construction as what they were few years ago.’’ About the futuristic view of the hotel industry, Suresh Kumar, Chief Executive Officer, Fortune Park Hotels, said, “2015-2016 is going to be optimistic for the hotel industry. There is a change in the government and with the advent of the new government we expect
new and positive changes. India now is on the world map and is getting recognition which in turn is good for hospitality sector as well.” Jyoti Narang, COO, Luxury Division, Taj Hotels said, “we are doing well in F&B and we are getting huge revenue out of it. About consolidating the brand she said, “we play an important role in almost every key segment of the hotel industry, it does not necessarily have to do about size. We are glad that we are almost everywhere.’’ Ajay B a k aya , E xe c u t ive Director, Sarovar Hotels said, “It is a great opportunity if you have cash but those who are building from scratch, they need to be a lot more educated and aware about the market trends.’’
R aje ev Menon, A rea V P, South Asia, Marriott believed that the real problem lies in being unorganised. He said, “the real problem is not the location or finance, it’s all about being a little more organised than what
we are today.’’ Patu Keswani, CMD, Lemon Tree Hotels said, “If the problem of infrastructure gets solved within the country, I think various segments of hotels will automatically grow.’’ HS
September 2014 • HOTELSCAPES 23
FHRAI REPORT
Heritage hotels: Are they getting their fair share? It was after my attendance to this conference, that I realised what a heritage property goes through till it becomes a full-fledged hotel. They are distinguished hotels, different from their main-stream counterparts, and whatever concessions they asked in this session from the government, were in my view, completely valid. The Heritage Hotel owners are not getting fair justice in comparison to the amount of hard work they put in. Let’s hear it from the men behind the Heritage Hotels themselves about what are they are offering and about their expectations from the government.
R
akesh Mathur, former CEO, WelcomHeritage Hotels sa id , “i f you really want to know how tourism started in India, and what’s the key to tourism in India, I would say it’s all about heritage. We are really not a wildlife destination when we compare ourselves to Africa and other countries. We are actually a heritage destination; however, we have also evolved into a shopping destination of some sort. But
heritage has always been the main driver for attracting tourists to our country. Even today whether it’s the domestic traveller or the foreign traveller, it’s about heritage tourism.” Ind ia ha s it s ow n se t of problems and the potential is huge. Mathur added, “today the number of properties that are lying vacant and the number of proper ties that can be converted are huge. You can look at government offices based in
24 HOTELSCAPES • September 2014
heritage properties, like that of the FRRO’s office in Mumbai, which is a heritage building and converted to a government office. Wouldn’t it be great contribution to the tourism of our country? The idea is to convert a heritage building into a productive asset.” He came to the prime point where he explained how difficult it is to make a heritage hotel. He validated, “in a normal hotel you design, you build, you operate. But in a heritage hotel, you clean
the property, then you have to repair, then restore, after that comes the designing, then comes the conversion process, where you convert a residence into a hotel and then you commission.” Also the conference didn’t notice the absence of Aman Nath as he sent his powerful speech via an e-mail to Mathur and requested him to share it with the delegates. His speech didn’t make his absence felt at all. His strong words kept reverberating
FHRAI REPORT
Maintain your true heritage and character, says Anand Kumar, JS, MoT
W
hile he was sensitive to what all these hoteliers said, he also expressed what all can be offered from the Ministry for the betterment of these heritage properties and what these properties can do themselves to be at a better position from where they are right now. Some excerpts from his speech: “The first thing I want to say is, we have to create a new heritage while maintaining the old. We have a responsibility to conserve and create heritage. Awareness is another thing that I want to point out. Unless we create awareness about our heritage and how magnificent it is, I think we would fail to maintain it. Heritage belongs to the future generation, maintenance is our individual responsibility. We must tell our future generation about the good points of heritage and its vast significance. We have to generate a new interest, among contemporaries and also among international travellers. Also mere name of any hotel, won’t tell you anything about the history of that hotel or how magnificent it is, until you go to its website. So I have this suggestion to the heritage hoteliers that put the year of the
in the hall for some time. His mail read as follows: “Dear Rakesh, I am happy that Tijara has turned a full circle, for you had gone there in 2003. But you have seen how it all has gone wrong. It is a full circle of destiny that you are a former president of WelcomHeritage and you have seen Tijara in its complete ruin. I remember you saying that when you climbed up the steep hill, there was so much of undergrowth, that you felt it needed to be cleaned as there could be snakes. There was no road; I had to walk through a small road. We just did not do this. We did much more than that. We cut the unfinished centre of two billion year Aravallis into “Hanging Gardens”. Here no one in the bureaucracy has even made a trip to the property to see our effort. I think if I have to invent an analogy it could be that
hotel (when it was built) after the name of the hotel which will automatically generate the interest in tourists, they will be enticed in the old history written in the name of the hotel. This way, you will immediately connect to the user. Also I request all the properties to put the information about the hotel like its history and about its origin, so that people, who are staying in the hotel, can know the grand history that’s related to the hotel. A lso I want to say let ’s do the restoration, without damaging the property. If there are Portuguese tiles used in a hotel, let them be there. It will never lose its original charm this way. Let’s retain the originality and we will be able to sell our products if you are able to do so. The moment we try to tamper with originality, you would not be able to sell it. And that’s why we have put a norm that if you want your property to fall under heritage category, you cannot change the façade of it. I think the industry should sit together and listen to the demands of the people related to this significant
the government of Rajasthan saysLets have a baby together, in a way where I won’t come to see you or touch you but you have to make the baby alone. I am the man so my job is only to screw you left, right and centre but from a distance. If you take any external help, the baby will be a bastard. And now the baby is born and ready to go to school, the government is behaving like Vishwamitra who told Meneka that he had got nothing to do with the baby that he has manufactured with her. It is a request of Neemrana that we get together and ask for justice. If each of us has to fight individual tourism boards alone, the government will keep us knocking us all, on different issues, one by one. How can it have issue that Tijara tender for PPP and neither the fort, neither the land that it sits on, belong to them? Nor was there any
sector based on where the properties are located and what kind of revenue they can earn. Our norms are very flexible as far as classification of heritage properties is concerned. We do not specify what kind of food should be there, what kind of bathrooms should a heritage property have, we do not specify anything, and we have kept them flexible, so that we are partners with you in maintenance and restoration of the heritage properties.”
access, so they made Neemrana and made them pay lease to the forest department and it made them but the access to the Fort, land (you have to buy land to reach the fort) also from the forest department. Suddenly last year they said why are they are building on their land? And why this project was given to a private party at first place after 11 years. And all this is after seven year clearance process, so where do we begin and where does India even end in any race with the world? Since October Neemrana is ready to commence operation but the district forest officer accuses Neemrana for encroachment.” Mathur said, “I would say that the minimum help that a government can do in heritage PPP Project is to have a property registration, to have a onetime
clear ownership, road access, proper electricity, single window clearance. Will anyone invest in PPP if this be their experience in Rajasthan or any other state?” Steve Borgia, Chairman & MD, INDeco Leisure Hotels requested the heritage property owners to be innovative and to understand the importance of art and culture. “We need to have concern for our art and culture and also for rural India. In olden days, we did not have five stars to show but still we attracted so many tourists. Years later nothing has changed as we have so much to offer now. India is a country that has people from cross communities and we have people who speak so many languages, what is it that we do not have? Yet we are struggling with the issues like scarcity of water, electricity and toilets.” He
September 2014 • HOTELSCAPES 25
FHRAI REPORT believed hospitality can offer a big solution to this. It encompasses almost everything like heritage, eco-tourism and so on. He then explained his portfolio of properties – “I have a property called as INDeco Swamimalai in Tamil Nadu, where we offer the guests something phenomenal. We welcome people with a foot massage. Also this property has helped in providing jobs to the local artisan craftsmen, local dancers, musicians etc. Also one thing that I made sure was we do not want to go where the market was already shining; we wanted to explore new destinations. We used recycled woods, like broken tiles etc. even if it cost us five times the price of what we could have paid otherwise.” A l s o 70 p e r ce nt of t he employees in his hotel are from the neighbourhood and that’s how they are generating employment in the region. Dhu nji K ava r a n a, CEO, ITC WelcomHeritage strongly recommended that together we have to create an awareness of heritage hotels in India. He added, “I believe that when you are staying in any heritage property, you at least have to stay there for two entire days, to understand fully what that property has to offer you and to understand the culture.” He elaborated his experience – “when I started working with Heritage Hotels, I made a trip to Kota, and there we have Umaid Bhawan Palace. It was royalty. It spelt luxury and when I lay down at night and looked at a fan, I thought that now I am in touch with history, looking at the roof. We know we are a part of hospitality but we are its part with a difference. I would like to request Anand Kumar, Joint Secretary, Ministry of Tourism to come out with something “Incredible Heritage”, just as they have “Incredible India.” Also some of the forts and
palaces are well-known because of their strategic location; they can be easily accessed and situated in better places. But he expressed his resentment about those forts which are located at less-strategic locations in Khimsar, Ranthambore, Nawalgarh and are not that wellfrequented. He added, “We have only 2000 branded rooms in the country and there are 5,000 rooms which are not yet branded. The average size of any heritage property is approx. 35 rooms. He emphasised that these were small properties and requested the government to look at this segment with a different eye. “How much revenue can somebody generate from a 35 room? Not much. What we want the Ministry of Tourism to do is to be our midwife, give birth to heritage. And I personally will contribute towards creating awa r e ne s s o f t he he r i t a ge properties in India,” he said. Thakur Randhir Vikram Singh, General Secretary, Indian Heritage Hotel Association shared that the need of the hour is to first understand what heritage is all about. “Heritage includes castles, havelis which are prior to 1950. They have special form of architecture, depending on the area they were built in and they are classified into three categories: Her itage, Her itage Cla ssic , Heritage Grand. They are very different from star categories. Most of these hotels are in rural India. When you go into the interiors of India, you have both positive and negative sides. The biggest advantage is that we are able to generate employment for the rural youth. 80 per cent of the heritage hotels are in rural India. Also, while musicians and dancers are getting employment in big cities, I think heritage hotels are taking good care of them as well. Then we have challenges too. High- maintenance of property, trained manpower is not available
26 HOTELSCAPES • September 2014
and thus you have to train your own staff. Then there is no drainage, there are problem of power cuts etc.” H e a l s o b r o u g ht i n t he government when he said that, “now we have to think that are we restoring our heritage or destroying it by put ting meaningless restrictions?” Heritage hotels have different problems then hotels in urban areas, therefore these hotels need different care. He added, “we started the heritage hotel movement with 14 hotels in Rajasthan. Today, there are 184 hotels under Heritage category. In twenty four years we have done a lot. Running a heritage property is like putting money in a well, where all your money just disappears.” One more interesting point that he put forth was that, “in rural areas you have bars, but these bars are not for revenue generation, it’s just an amenity we give to our guest. So you need to have a different bar licence than what hotels in urban areas have. 20 or 25 years back, the tourism industry was declared as an industry but hotels have never been given an “industry status”, they still have to pay commercial rates. I think Heritage Hotels are not even taken seriously at this stage.” T he r e i s s ome ne e d fo r financial support that these heritage hotels need. Low cost funding is required for highmaintenance. They also need to have some sort of central assistance in this. He also made a strong pitch for all state governments to have a comprehensive heritage tourism policy. Abhay Mangaldas, MD, The House of MG Hotel believed that Heritage Hotels provide unique local individual experiences. He said, “it took us a decade to create a 40 rooms inventory as it takes a lot to build heritage hotels. To grow in
this business we have to leverage the experience. The opportunity lies in the fact that the customer comes twice or thrice at the most. How do we reach him for the next 365 days? That’s our responsibility. How do you reach his wallet? This is the premise on which we have build a strategy, which I am going to share with you.” With this he went about explaining the experience that his hotel provided which, to us, seemed unique and interesting. “The House of MG is a heritage hotel of the early 20th century in Ahmedabad. It has got so much to offer, but still people come only for an average of one and a half day stay. So we deliberated that when they come, they get a unique experience in the room but how do we capitalize on that? So if you like the bed you are sleeping on, you can buy it. Everything is made by local craftsmen. So we converted the hotel into a live retail. We added a revenue stream to this and I tell you this retail business is growing faster than our hotel occupancy.” “We have e commerce store. It is for curated crafts. Also, we are coming with android and iPhone apps wherein the guests can access, with detailed videos and photographs. Another initiative is, we have great doma in knowledge of the area that we are in, domain of the heritage of the area specifically. We started putting together the knowledge whatever we have. You can actually plan a free itinerary and share it with your customer crafted by an individual heritage hotel. Her itage hotels have great stories to tell which they never get to share, I think a tool like this can help them. When somebody is in Heritage Hotel business, they have to come up with interesting and unique ideas to generate revenue and we think Mangaldas is doing it just right.” HS
FHRAI REPORT
Vignettes from other sessions at the convention: (Top) Restaurateurs including AD Singh, Sameer Kukreja and Rahul Akrekar deliberated upon the viability of the unprecedented boom in the sector. (Middle) The Maharaja of Udaipur is seen with delegates, possibly, sharing some details. (Bottom) In the session on ‘Where is the Money’ speakers including Chender Baljee, CMD, Royal Orchid Hotels and Mandip Lamba, among others.
September 2014 • HOTELSCAPES 27
FHRAI REPORT
Can all the stake-holders come together, strengthen Brand India?
Various associations have come together to convey a common agenda, that the tourism industry face today. Some are resolved, while some are impending. Also, the Brand ‘’India’’, signifies a lot, but lacks in a numerous areas, which were out in the open, in the realm of discussion by the key speakers present at the FHRAI’s convention.
H
immat Anand, F o u n d e r, Tr e e o f Life Resor ts and Hotels argues that to understand the problems and challenges faced by Brand India, we have to first understand what brand India is all about? What it really means to those who are in the various segments of the industry? He says, “we have a plethora of associations in our country today, and I think 10 of them have come together to from FAITH. In 2008, India had .58 percentage of International tourism. In 2012 we reached .64 per cent. This shows us vaguely about the effort that we put to promote tourism in the country.’’ He further brings in a report which shows the position of an Indian traveller on a global platform, which dismayed the audience. He said,’’ According to a report by American Express, Indian Traveller was rated as the second worst traveller in the world. This is stuck in my mind since I have read it and since it’s
coming from Amex, I will give it some validity. Brand India has to be built by the traveller, also it might not necessarily be the product, which is just not working.’’ T h e qu e s t i o n t h e n wa s directed to Sarabjit Singh, Vice Chairman, FAITH, where Anand, who was the moderator for this session asked him what made ‘’Brand India’’ and where it is lacking because it is apparent that other countries still outstrip us, as far as international tourist arrivals are concerned. Singh said, “there is no doubt that ‘Incredible India’ is one of the best campaigns in the world, but at the same time, we always have negative image of India because of various factors, that include the image projected by Indian movies and documentaries in the past to the rest of the world. Secondly, anything negative happening in India is blown out of proportion by the media in other countries. But we have to find ways to correct this. As far as branding of “Incredible India” is concerned it
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has been done effectively.’’ He was cross questioned by Anand and asked if he thought nothing was wrong with the product “Incredible India’’ and it was just the negative publicity that was harming the image? To this, Singh clarified, ‘’we are talking about branding and I think as far as branding is concerned it’s been done properly, but the other factors are there which are holding it back.’’ S.M. Sherwani, President, FHRAI then talked about how dif ferent is one association f rom t he ot he r, e xcep t for the association he represents. He said, “I have experience of FHR AI but not much of the other associations. We are similar that we have used this as a trophy that we wear very proudly, it’s the chair that we find difficult to give up, give up the status, and we forget that actually our status and wealth comes from the business that we are into. The speech of PM talked about being national sewak, and I think we have to look at ourselves as the
industry sewak. The moment we see ourselves as the President and would expect to get garlanded, we forget our focus.’’ He a lso mentioned the problem that his own associationFHRAI has. He said, ‘’the thing which is wrong with FHR AI is that FHR AI was found in 1955. It was founded with 13 members and since then it has grown to 4,000 members, but the constitution was still what it was 30 years ago. Why should the president come from the region, why should he not be elected from the board of FHRAI for a period of one or two years? At FHRAI each region sends six members to the board, irrespective of the membership. You have equal representation on the board. If, you have equal representation in the board, why can’t these 24 people elect their President for a period of two years? Because, believe me, for six months when I took over as the President, the first thing I used to do was to wait for the new government and after the new government
FHRAI REPORT came, the convention came, and now we have got the list which needs to be done, which will be handed over simultaneously. But I feel may be 5 years from now, the new committee can think of changing the constitution, so that the President can come from anywhere but elected by the board of the FHRAI.’’ He also believed that if the members of FHRAI take a more active part, things will be faster. Also, he mentioned how he was working actively in getting the industry together, but failed to reach anywhere. “The point I want to make is, does anyone ever remember the Prime Minister of India having come to inaugurate the FHR AI convention? No, you won’t because it ha s never happened. Does anyone r e me mb e r t he M i n i s te r of Finance coming to inaugurate the FHR AI Convention? No you won’t because it has never happened. But once we get our act together and FAITH has its first convention you will have 10, 000 delegates because FAITH today represents 60,000 members and that’s the time when the Prime Minister of India will come to inaugurate this convention and the Finance Minister would be the key note speaker. I think time has come to give FAITH all support’’, he validated. Girish Shankar, Additional Secretary, Ministry of Tourism, then came forward and talked about what the brand “India’’ had achieved and what more is to realise? ‘’Brand India in itself is beyond tourism. Incredible India, when launched almost 12 years ago, to promote tourism, did incredibly well. But definitely we have to do something more. We cannot use this brand totally for any further promotion. That is why we have put “Incredible India’’ right at the upfront. Also, we are doing the co-branding to promote tourism further, but the main brand remains the same. Incredible India will be the real brand to promote tourism.’’ Also he thinks it’s about the people who travel, whether domestic or international,
who play an important role in further strengthening the ‘’Brand India’’ as we have 900 million domestic tourists. He added, “problem that we face at times is, we a re getting request from the several associations. And, we ca n’t give preference only to one association as we have more a dozen important associations in this sector. So listening to 12 different bodies, accumulating information, then to understand what they want is also there. The biggest challenge this sector is facing is of convergence and by convergence I just don’t mean of the stakeholders. I, also, mean state and the central government as most of the demands you are raising, the answer lies with the state governments. Also, one thing has to be resolved by the associations that there are sometimes conflicting demands.’’ He also mentioned that the administration was fantastic, but it was the pace today, that needed to be enhanced. J y o t i K a p u r, P re side nt , ADTOI, said, “there is a lot of responsible tourism in our county, so the focus of the organisations like us, is to regulate the state. I will like to add that we have to add value to “brand India’’. We are at the moment, where we have to portray India as a destination of trade and tourism. Once, our infrastructure and other requirements are in place, more tourists will come and automatically the brand India will get strengthened.” Subhash Verma, Honorary Secretary, Faith and Immediate Ex- President, ADTOI, said, “It’s very easy to start a brand, but it’s difficult to build a brand. We have to see what the short comings are and keep the pace with the brand building with ever-evolving time. We have co-brands like Air India but unfortunately, as we know, they are not representing India as they should. In our country every segment has an association, domestic, inbound, outbound, adventure, mice, hotels, guides, More or less everybody
i s r e p r e s e nt e d w i t h s o m e association or the other and I am a firm believer that associations in some way do contribute to our businesses.” FAITH is being led by 10 leading organisations, it carries more weight but what was also debated was what could FAITH do different that other organizations could not in the past 30 years? Verma said, “FAITH is actually a Federation of associations in Indian travel and hospitality, 10 associations recognised by Ministry of Tourism. It’s not an association, without spoiling the image of other associations, I want to say, it is a federation it is an extended arm of all the 10 associations. I consider that tourism is like an elephant, a complex thing, there is a leg, tail etc. Similarly, all associations have their own vital roles but when you have to look in the holistic way, you look at the elephant. If you look at the elephant, you can never miss the other parts. So I want to suggest we have to look at our problems in a holistic way.” Questions which were raised twenty years back were being discussed even today. Sarabjit Singh, Vice Chairman, FAITH, reacted to this by saying, “I came into this business in 1971. As a tourist transport operator initially and now I have an inbound tourism company as well. To my understanding, the reason why we are repeating the same thing again and again is because over the period of my tenure I have realised MoT doesn’t have any power of its own. Whatever, we want to say that they have started accepting or saying the same thing, but resulting in nothing because nobody listens to them. So may be somewhere, in our repetition in pleas we are right, as we do not have any other alternate. It’s like if I have a problem, I will go to the doctor again and again, till the medicine works.’’ There is a difference between single associations operating together and FAITH going about it together. He said, “We have interacted with the states and
we have collected all information together. The issues which we have come up, with the states, related to the hotels are – FSI must be increased, luxury tax – which are creating problems s ho u ld b e mor e l ib e ra t e d , property taxes should be looked into etc. All these issues are being taken forward.’’ Explaining the evolution of FAITH he further said, “When the 10 associations come together and my agenda used to be small and there was hardly anything to do and meetings used to get over in a jiffy. When we go to any ministry there are 15 ministries which are responsible to help tourism, but they never do anything because there is no cooperation between the ministries. That is what we have found and that is the reason nothing, which is beyond their power, has happened.” Also, he discussed their plans of meeting Ministry of Commerce, Ministry of Tourism and with Ministry of Civil Aviation. “Until and unless aviation sector comes along with us, we cannot move forward. Tourism grows for everybody; it’s not going to grow for one person. If, you are putting your hotel, that doesn’t mean you are going to market only your hotel. They will use transport too. So, that is clear after becoming one federation. Everyone is positive. FAITH has requested the Prime Minister to call a meeting of all the ministries to give them direction on the importance of tourism for the Indian economy and therefore co-operation is required. E-visa is a wonderful thing. It’s because of the collective strength that we were able to do something like this. What we have done so far, is that, we have collectively presented budget documents and that is the reason things have been taken care of, in the budget, by the government of India. For the first time, we have presented our proposals to the Ministry of Commerce with regard to tourism as part of the foreign trade policy. Hotel industry is going to be benefited by this,” he added. by ANUPRIYA BISHNOI IN JAIPUR
September 2014 • HOTELSCAPES 29
INDUSTRY REPORT
Global Hotel Prices accelerate for the fifth year in a row Hotel prices paid by travellers worldwide rise by four Percent in the first six months of 2014.
A
ccording to the recent study made by Hotels.com, the average price paid for a hotel room around the world rose by 4% during the first six months of 2014, when compared with the same period in 2013, as the overall economic recovery gathered greater momentum, particularly in Europe, and consumers became more confident in raising their travel spending. The Oberoi, Dubai
The Chedi Andermatt, Switzerland
30 HOTELSCAPES • September 2014
The global Hotel Price Index stood at 115 at the end of the first six months of 2014, 15 points higher than at its launch in 2004 and now only four points off its all-time high of 119 set in the first half of 2007. Johan Svanstrom, President of the Hotels. com brand, says, “There was a promising start to the year for the travel industry in general as demand for both international tourism
and business travel remained strong. Consequently, we saw the highest rate of increase in the HPI since early 2012 and, for the first time, we have two regions whose regional indices have overtaken their preeconomic crisis levels.” Latin America and the Caribbean both achieved record results over this period. The Caribbean had the fastest rise in the current HPI of 6% , taking it to the highest individual region Index figure ever documented. Latin America continued the progress seen in 2013 and also reached its all-time half-yearly high. Two regions reported 5% Index growth: Firstly, for Europe and Middle East, this was the sharpest increase in the region in six years. Secondly, while North America was boosted by results from the USA which posted the best hotel occupancy levels of the century in June, according to Smith Travel Research. For Asia and the Pacific, the Index saw no movement either up or down. Asia, in particular, continued to offer excellent value for travellers, while prices paid by inbound visitors to Australia were eased by the weaker Australian Dollar. Svanstrom continues “As well as the general economic recovery, there were three other stand-out reasons behind most of the price moves. Currency fluctuations played a major role in determining whether prices paid when travelling abroad either rose or fell for many travellers. UK travellers, in particular, benefitted as Sterling either remained stable against already weaker currencies or gained ground against others.’’ The civil unrest in several key tourist markets over this period impacted visitor numbers, causing prices to fall, particularly in Egypt and Turkey, although this had a positive impact on Spanish tourism in particular. Finally, the two great global sporting events in 2014 occurred in the first half of the year with prices paid in Sochi and Brazil naturally rising for the duration of the tournaments. HS
GUEST COLUMN
Kanika Hasrat
General Manager Courtyard by Marriott Gurgaon
The evolution that’s no less than a revolution
G
oing back in the time when luxury was not witnessed but only imagined, when neither hotels nor guest houses existed, back then, four walls in an unknown motherland catered to the needs of a traveller. The advent of various transportation modes got businessmen travelling for expansion and brought in an increased demand for lodging facilities. During the British Raj, India saw some fine structures created for the foreign aristocracy. Most of them still stand strong. The global hospitality industry witnessed comprehensive exposure after the Second World War and thereafter the hospitality industry left no stone was unturned, right from modern day Europe to South Asia and eventually India. With supportive governmental policies to enhance tourism in democratic India, the sector was given a beanstalk. The expansion brought in the dawn of planning, organizing, staffing, designing and furnishing a long with standard operations in the hotels. Training personnel led to a trend of education for the hospitality industry. From the time of lodges that were meant only for resting to seven star palatial hotels, the sector has travelled on a road without a backward glance, only to master the art of servicing. The evolution
of the hospitality industry is no less than a revolution. It has been the source for creating job opportunities whilst contributing to the economic appetite of the country. With every new airport in a developing city, comes a site with surfeit hotels to choose from. This art of leisure has today has a market share of more than INR 7 lakh crores and is expected to reach INR 25 lakh crores by 2022. Hospitality comes from French
a mark behind. Experiential is the key to nurture the relationship with guests and only way to create a recall. From the time a guest steps into the hotel, every second of their stay has to crown a remarkable experience. In our Indian culture, the guest is still God. Hotels have become destinations by themselves- for holidays where families step into a property and forget the world of reality. Such engagements hold true
FROM THE TIME A GUEST STEPS INTO THE HOTEL, EVERY SECOND OF THEIR STAY HAS TO CROWN A REMARKABLE EXPERIENCE. IN OUR INDIAN CULTURE, THE GUEST IS STILL GOD. word ‘ hospice’ that connotes providing for the weary. This clearly is an antonym in today’s time. The focus has now shifted from just providing for the traveller to becoming a holistic supplier of traveller’s demands. Luxury a nd le isu re have b e come a n indispensable factor for the guests today. Hotels and their services are luxury. And the foregoer, in turn does not mind going an extra mile to keep its patrons pampered. The aesthetics of the location, food, interiors and activities is what leaves
not only for the single traveller or families but also for larger groups like corporates and incentives too for various occasions. With such constant engagement, hotels have grown more flexible in every way to cater to the needs of every customer. Guest preferences and intelligence are being proactively amalgamated to enable delivery of superior experience. Evolution in itself becomes a cha llenge for such a volatile industry. Hotels have to adapt to the constant fruition of technology
a nd f licker ing dema nds of consumer, generation demands, constant change in government policies and many more. The challenge of keeping up with rapidly developing technology is costly. Technology however, opens new avenues for guests. The digital media space has changed the genesis of hotel booking. With plethora options available in the online space, a virtual tour of the hotel is already executed by the guest before even zeroing down on one. The competition doesn’t just exist traditionally, but even in the digital partnerships. Whilst this does get a hotel visibility in the digital world in my opinion, lesser individual interaction due to digital advent makes the industry lose out on the human factor and warmth directly to their guests. The hospita lity industry has seen major reform push from the government lately. While some great brands bloomed in India under the umbrella of the international parent companies, we a re witnessing aggressive expansion and origination of more hotels. The foreign direct investment (FDI) inflows in hotel and tourism sector during the period April 2000–March 2014 stood at INR 45,000 crores. Large numbers of overseas travellers are flowing into our country giving rise to more demand. Trusted sources imply, India is to pilot the tourism industr y globa lly. According to Cushman & Wakefield, the hospitality sector in India expects 52,000 new hotel rooms to be added in five years (2013-17). This will lead to a rise of over 65 per cent in total hotel inventory in India. The National Capital Region (NCR) is expected to contribute around onethird to the total expected hotel rooms supply during the period. Despite of all the challenges, industry is growing like never before, with hiring prospects at an all-time high. It’s an exciting time to be in hotel business. HS
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INDUSTRY REPORT
T
HVS survey: industry trends and opportunities 2014
he Trends & Opportunities report, based on the results of the Trends & Opportunities Survey conducted by HVS annually, depicts and analyses the key trends in the hotel performance of the country and presents HVS’ outlook with special emphasis on 13 major Indian markets. The report also outlines existing and future oppor tunities in the hospitalit y industr y of specific interest to investors, developers and hotel operators. The survey participant base has registered a significant rise since 1995/96 from 120 hotels with 18,160 rooms to a record 814 hotels with a
room count of 99,301 in 2013/14, an increase of an additional 97 hotels and approximately 13,180 rooms since the last survey. The growing number of survey participants over the years demonstrates an increase in both HVS’ penetration into the market and the market’s size. Moreover, a larger sample set and availability of data for two historical years have led to the 2012/13 figures undergoing a minor change across all parameters. Similar to previous editions of the Trends & Opportunities report, we have weighted the number of room nights to account for the new supply that was not operational for the entire fiscal in
order to compute the overall occupancy and average rate. The weighted room count for 2013/14 is 95,414, up from 82,512 for 2012/13. Figure 1 illustrates survey participation for the fiscal years 1995/96 to 2013/14. The Indian Economic Scenario – An Overview T he much an ticipated gener al elections in 2014 saw the National Democratic Alliance (NDA), led by the Bharatiya Janta Party (BJP), s e cur e a c onv in c in g m a j or i t y with 336 seats in the Lok Sabha (Lower House) out of a total of 543 elected seats. The Narendra Modiled BJP itself secured 282 seats, propelled as they were by their
development-centric agenda and a strong anti-incumbency factor against the erstwhile government. W i t h a d e c i si ve m a jor i t y, t h e new government is expected to focus on strengthening economic fundamentals through necessary policy formulations and amendments and set the platform for inclusive and sustainable growth. It is also expected to focus on creating affable diplomatic ties with neighbouring countries in Southeast Asia. That being said, the recent disconnection of bilateral talks with Pakistan coupled with the repeated ceasefire violations along the Indo-Pak border lead one to question the
likelihood of a peaceful future with our neighbours. The budget for 2014/15, which was announced on 10th July 2014, set the tone for economic expansion with emphasis on development of quality infrastructure and facilitation of entrepreneurship at the rural and urban levels. On the heels of a partial recovery of the global economy, the country recorded a Real GDP Growth of 4.7% in 2013/14, a minor increase over the previous fiscal. The Industrial sector recorded the least growth: 0.65% in 2013/14, lower than the previous year’s 0.96% but also substantially lower than the 7.81% recorded in 2011/12.
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INDUSTRY REPORT
Agriculture, on the other hand, recorded 4.7% growth in 2013/14 – a significant increase over the previous fiscal. The Services sector grew at 7.0% in 2013/14, marginally higher than the 6.9 % increase recorded in 2012/13. India’s current account deficit (CAD) narrowed to 1.7% of the GDP
in 2013/14 from 4.7% in 2012/13, mainly a result of the contraction in imports, especially that of gold and other non-essential items. After having witnessed a partial decline in 2012/13, the fiscal deficit expanded to 5.2% of GDP in 2013 /14 as compared to 4.8% in 2012/13. This was primarily due to expenditure
growing at a f aster pace than revenue. The year 2013/14 also saw the rupee being more volatile, depicted in the exchange rate to the US dollar fluctuating significantly, especially between May (`53.73/US$ on 2nd May 2013) and August (`68.36/US$ on 28th August 2013), and averaging
`60.7/US$ for the fiscal year. The rupee’s volatility and decline in value has been ascribed to the supplydemand imbalance in the domestic foreign-exchange market on account of slowdown in foreign institutional investors (FII) inflows. Figure 2 shows GDP Growth, Inflation and Exchange Rate from 2006/07 to 2013/14. During 2013 /14, FDI inflow declined by 31.8% over the previous fiscal, largely due to poor investor sentiment and political uncertainty at the time. Going for ward, the Economic Survey of India forecasts India’s GDP growth to be in the range of 5.4-5.9% in 2014/15 on account of an expected revival of the Industrial sector, a stabilised current account, steady capital inflows and an expected resurgence in growth from manufacturing. With the previous government having initiated a programme to revitalise some key infrastructure projects across the country and the new government also following suit, economic expansion is expected to maintain steady momentum in the medium-to-long term. The Tide is Turning As discussed in our 2013 publication, the four pillars of the hospitality b u s i n e s s – S u p p l y, D e m a n d , Occupancy and Average Rate – are key indicators when assessing the past, present and future of any hotel market. On a nationwide basis, branded and/or organised supply grew at a CAGR of 17.8% over the past five years. Demand for these rooms grew at 17.6% for the same period. Resultantly, India-wide occupancies moved from 59.3% in 2011/12 to 57.8% in 2012/13 and have closed at 58.9% in 2013/14. Average Room Rates, however, have gone from `6,032 to `5,773 and are now at `5,531 for the period of 1st April 2013 to 31st March 2014. While occupancies have remained rangebound, average rates have declined for several years in a row. Figure 3 shows the nationwide supply and demand trends for a 15-year period. Figures 4 and 5 present the per formance of existing supply vs. the performance of new hotels that have opened over the past five years. HVS has been analysing this data consistently for the last
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INDUSTRY REPORT three publications now. The trend continues to reflect the fact that existing hotels have grown (or at the ver y least sustained) their occupancies through the so-called down cycle over the past five years. When one studies a market’s overall occupancy, it may seem like the numbers are declining; however, it is evident from Figure 4 that the decline is primarily a function of the new supply’s lower initial- year occupancies that are in turn pulling down the marketwide average. When looked at independently, not only has existing supply proven its ability to retain and/or grow its occupancy numbers, even new supply continues to show a steady (albeit relatively paced) year on year grow th in
occupancies, as is visible in Figure 5. However, similar to last year, we continue to see declines in average room rates. While one may partially attribute this to markets having a larger pool of budget and midmarket hotels in their competitive set now, when we study the charts above it is clear that the advent of new supply is also causing existing hotels to cut their rates in a bid to retain business. This knee-jerk reaction is often a short-sighted approach to doing business and we discuss this in more detail in the following paragraphs. Back to the Future! A s we look to the future, one must first pay heed to political and economic developments in
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the last few months. The BJP-led NDA’s historic victory has not only captured India’s imagination but also reinvigorated overseas interest in India, and one is beginning to witness an overall positivity in the sentiments of people, businesses and nations at large. The Indian stock markets are at their lifetime peak and financial pundits are speculating a continued and sustained bull-run, this time possibly for the mediumto-long term. The recent union budget’s approval of additional FDI in the defence and insurance sectors only adds to the already approved FDI limit increases to retail. The likelihood of significant amounts of foreign money pouring into our country is now strong. Stability at
the centre is therefore very likely to catalyse overall growth in the Gross Domestic Product (GDP) over the next three-to-five years. While average room rates have declined across various prominent markets lately, absolute demand in terms of “r oom nigh t s per day” (RPD) continues to grow. Our research reveals that demand for organised rooms has grown at an average of 11.3% over the past decade. This time period witnessed an up-cycle from 2003 to mid 2008 and a down-cycle from late 2008 to 2013. However, year-on-year demand grew in the double-digits during both cycles. This in itself is testament to the inherent strength of the sector and its continuing potential to grow, even in the face of external adversities. We are of the view that demand is likely to continue growing in the doubledigits for the nex t three-to-five years. Supply, however, is now going to grow at a slower pace. India had 103,855 branded/organised hotel rooms as of 31st March 2014. Supply – in the years going forward – is expected to grow by under 10% in 2014, about 12% in 2015 and approximately 11% in 2016. Given these demand-supply dynamics, coupled with the likelihood of overall economic growth discussed above, HVS feels quite confident in predicting a strong and sustainable upswing in industry performance over the next three- to-five years. While certain markets may take longer than others to reap the benefits of this forecasted upside, overall, the sector should ready itself for the next up-cycle in the near future. Riding the Wave Riding a wave is not just about timing the turn of the tide. It is also about employing the most balanced approach for a sustained surf. It is therefore important that various stakeholders of the Indian hotel sector pay heed to the following thoughts. Some of these include correcting errors of the past, while others are new or innovative ways of doing business in an increasingly competitive business environment. Hotel Operators In our various conversations with
INDUSTRY REPORT General Managers, Directors of Sales & Marketing and Revenue heads of hotels across brands, we have repeatedly heard them worry about increasing competition and the inevitability of why average room rates just had to be “corrected” if they wanted to retain business. It is evident that hotels across positioning and price points have dropped rates in a bid to gain business over the last twoto-three years and “rate wars” have led to some surprising decisions being made by respectable and globally recognised brands. Like last year, we reiterate in this year’s publication – India does NOT have a rate problem! If anything, we are often too afraid to charge a fair price for the product and service being offered, because the management feels that they will lose critical business unless they offer the lowest rate in town. As we look towards the advent of an upcycle in the near future, HVS would like to strongly urge management companies – international and domestic alike – to look one step beyond. Focusing on value creation for your guests rather than simply offering the lowest room rate needs to be the strategy going forward. Today ’s cus tomer is f ar mor e informed and educated about various hotel positioning and is therefore able to appreciate the differences that exist bet ween a budget, midmarket and upscale brand. He or she is also both able and willing to pay what’s fair for products offered and services rendered. Now that this maturity is coming about in the profile of guests, may we suggest that hotels be true to their positioning and target consumers with the confidence that they have the ability to appreciate their product and services. Addi tionall y, please do not forget MICE! Both corporate and social consumption of hotels for events is on the rise. Hotels across positioning must pay heed to the additional revenue that the meetings and conferences segment c an generate for their business. What you may have to give away in room rate could often be mitigated by way of increased F&B spends. Thirdly, domestic leisure is certainly growing and is willing to spend. Target them,
encourage them and rely on them – more than you have in the past. Creating packages for the domestic consumer will help hotels across all positioning in today’s India. Lastly, since earning customer loyalty is your goal, effective management of your loyalty programs will certainly help in value creation. Implementing a combination of ideas discussed above will help you in creating value that today’s well travelled, educated and discerning consumer will likely appreciate, and dropping ARRs may not need to be your primary means of securing business. Hotel Developers & Investors Buil din g w h en a m ar ke t i s in distress so that one may operate when the market picks up makes common sense. However, we are often surprised when developers and investors cite poor market conditions as their primary reason for not wanting to build hotels. If your intent is to build, then commencing work on your project now would be a good idea. It takes anywhere from three to five years to construct a hotel in India. Figures 6 and 7 provide a snapshot of development costs per key and construction tenures for over 200 hotels that have opened in India over the past five years. Given the fact that the last three cycles lasted five to six years each, hotels that will start construction now will ver y likely open in the midst of the next up-cycle. The opportunity to open when market conditions allow for a quick ramp-up of occupancies can help a project in meeting debt service obligations in a n e f f e c t i ve f a shi on. Su c h projects also have a higher chance of breaking even more quickly as a result. Similar l y, i f you are in the market to buy rather than build, negotiating deals when a market is in flux is always a better idea than trying to buy assets in a market that is on the up-swing. Given the fact that more than a few hotels across various positioning are available for transacting lately, buyers should look to acquire now. When the tide does turn, you will end up paying a premium for the same asset(s) that you may be able to negotiate for a fairly attractive value today.
Lenders T he hotel sec tor is either not understood or misunderstood by banks – public and private sector alike – in India. They have traditionally either extended loans based on their prior relationship with a borrower or because they have a mandate to lend a certain amount to a certain sector in a certain year. Of late, they have been shying away from lending to hotel developers because they fear the relatively poor performance of hotels that have not been able to service their debt obligations and have ended up as Non Performing Assets (NPA) in their books. However, not many lending institutions have recognised the fact that the problem doesn’t lie in the hotel sector. Instead, it was their approach to lending (as explained above) that was the primary reason for the situation they find themselves in today. Much like anything else, lending based on the fundamentals of the project, the conditions of the market it will operate in, the reputation of the developer and the viability of its cash flows to service debt should all be the yardsticks for lending. Additionally, rather than fearing the down-cycle, lenders must lend during this period, so that hotels may open by the time the upcycle arrives. Lending to hotel developers, when done based on due diligence and based on feasibility analyses, is the right approach. Fearing the sector because one doesn’t understand it is a folly. In summary, the Indian hotel sector is very likely on the cusp of its next up-cycle! The demand for quality accommodation will continue to grow and while the inherent cyclical nature of the sector will bring about crests and troughs, the fundamentals of the sector are strong. To conclude with the surfing analogy: indeed – the tide is turning! The question is – are you geared up for an interesting surfing ride? Survey Results This report presents the results of the HVS Survey on the performance of mostly branded hotels, analysed by each star grading, as well as major cities. Moreover, for each city we have presented the new supply, its market orientation and
estimated the number of rooms under construction along with the probability of their development over a period of five years. Industry Performance According to Star Category In 2013/14, the overall weighted occupanc y acr o s s c ategories (58.9%) increased by 1.9% over 2012/13; however, average rate (`5,531) dropped by 4.3% over the previous year resulting in a decline in RevPAR by 2.5% to `3,260 in the same time period. Moreover, hotels across all categories witnessed a year-on-year increase in weighted occupancy, except for the four-star segment, which registered a marginal decline of 0.1%. On the other hand, weighted average rate across all categories exhibited a decline apart from the two-star segment, which grew by 7.7%. Consequently, the nationwide RevPAR decreased in 2013/14 with the four-star segment registering the ma x imum decline ( 5.9 %) , followed by the five-star deluxe segment (1.7%) and three-star segment (1.5%). This downswing could be attributed to these three categories adding close to 65% of the new supply in 2013/14. After registering a drop of approximately 2% in 2012/13 over 2011/12, the two-star category registered the highest RevPAR growth in 2013/14 (12.7% over the previous year), owing to roundly 8% annual increase in average rates, highlighting the acceptance of branded economy and budget hotels across the country. The report also explains hotel occupancy across the star categories in India bet ween 1995 / 9 6 and 2013/14. Figures 9 and 10 show average rates for each of the star categories, expressed in Indian rupees and US dollars, respectively. Figures 11 and 12 present the corresponding RevPAR data. Existing Supply – 2013/14 In 2013/14, branded hotel supply surpassed the 100,000 rooms milestone. Nationwide existing supply recorded 103,855 rooms as of 31st March 2014, an increase of around 10.2% (9,600 branded rooms) over the previous year. NOIDA (including Greater NOIDA) showed the highest increase in
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INDUSTRY REPORT supply in 2012/13 over the previous year (33.1%). This is primarily owing to the small base of hotels in this market. Furthermore, both Pune and Bengaluru witnessed similar growth in supply (15.8% and 15.7%) followed by Gurgaon (13.8 %) , Chennai (12.2%) and Ahmedabad (12.1%), while Mumbai (1.7%) saw the least. Mumbai (including Navi Mumbai) maintained its top position with the highest existing supply of branded rooms in the country, followed closely by Delhi (excluding Gurgaon, NOIDA and Greater NOIDA) and Bengaluru, whereas NOIDA (including Greater NOIDA) continued to rank last amongst the major markets with an existing base of only 1,119 branded rooms. Figure 13 shows the existing supply for the 13 major cities from 2006/07 to 2013/14. Additionally, F i g u r e 14 p r e s e n t s t h e t o t a l operating inventor y for the 20 largest hotel brands in the country as of September 2014.
We would like to highlight that Taj Hotels, Resor ts & Palaces (including Ginger) and ITC Hotels (including Fortune) have retained the top two positions respectively for the last three years. Interestingly, since last year’s survey, Marriott International has displaced Hyatt Hotels & Resorts to rank number five in terms of existing inventory. Furthermore, Accor has replaced Sarovar Hotels & Resorts to take the seventh position, in addition to Lemon Tree Hotels and Wyndham Hotels & Resorts replacing The Leela Palaces, Hotels & Resorts and Royal Orchid Group to take the 11th and 12th positions respectively. Future Supply Over the years, HVS has followed a comprehensive approach for tracking new hotel development. We would like to state that a lot of effort goes into collating this data and then verifying many of these projects across various cities in terms of their development stage. Our tracking omits any flippant statements made
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to the media or announcements made by real estate developers to promote their brand and, therefore, get greater visibility. Thus, as we do each year, we have put together a list of developments under construction or those announced in each market that have a confirmed tie-up with an operator. Such developments have been analysed rationally, through the prism of an unbiased third party, for the probability factor of their development within the next five years. From 114,466 proposed branded rooms in 2007/08 – the highest in the last seven years – the total proposed supply was down to 68,050 rooms as of the close of 2013/14, the lowest since 2006/07. Considering this in conjunction with the 121% growth in existing supply over the same period, one can attribute the decline in proposed supply partially to a substantial number of previously planned rooms commencing operations. Additionally, delay and suspension of hotel projects on account of the
economic downturn, high borrowing costs and tight liquidity are the other major contributors towards this decline. Here, we would like to highlight that in this year’s survey, we have gone a step further and not only identified what the truly active proposed supply is and what is planned but not yet active, but also taken a fine-toothed comb approach and completely removed from the survey inactive supply across the nation that has been carried forward year after year, simply because it was either announced or signed, yet is known to be a dead or an abandoned project. At least for the five-year horizon that this report addresses, this inactive supply will certainly not see development and we have thus removed it from the proposed supply pipeline. In Figure 15, we present the existing and proposed supply in each of the 13 major markets and “Other Cities” covered in this report, with indication of the supply under active development (currently under construction or hotels that HVS is
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confident will open over the next five years). We h ave f ur t h er cl a s si f i e d the new supply into its potential positioning of luxur y, upscale, midmarket, budget and extendedstay hotels. Figure 16 presents the development trend of the hotel markets across India bet ween 2006/07 and 2013/14. The “inverse pyramid” with a higher number of existing hotels in the luxury and upscale space, symbolic of India’s organised hotel industry for years, is seen tilting with more midmarket and budget hotels being planned across the country ( almos t 6 6 % of the proposed supply). The 2013/14 fiscal saw luxury and upscale hotels account for only 30% of the total proposed supply, in keeping with a subdued domestic business sentiment during 2010/11, 2011/12 and 2012/13. In our opinion, such a development will enable the industr y to inch closer towards meeting the future room requirement in the country with midmarket and budget hotels coming up quicker and at lower costs than lodging products with a higher positioning. In comparison to our last year’s survey, Mumbai (including Navi Mumbai) displaced Bengaluru with the highest future supply in the country in 2013/14 with a total of 7,896 proposed rooms. However, in terms of active development of
supply, Ahmedabad recorded the top position (86%), closely followed by Agra and Jaipur at 82%. Once again, NOIDA (including Greater NOIDA) saw the highest increase in future supply (215%) on an existing base of just 1,119 rooms in 2013/14, followed by Kolkata at 115% on a existing base of 2,243 rooms. The countrywide active development of supply was lower in 2013 / 14 when compared to the previous fiscal in absolute ter ms. We an ticipate a lit tle over 45,000 branded rooms to be developed over the next five years, taking the total supply to about 150,700 rooms by 2018/19. Figure 17 displays branded supply across major cities for 2013/14 and 2018/19. Additionally, Figure 18 presents the increase in hotel room supply in India from 2000/01 through 2013/14, and then further illustrates the proposed new supply through 2018/19. Industry Performance by Major Cities Overall, Kolkata retained its position as the best- performing hotel market in terms of occupancy (72.0%) in 2013/14, while Mumbai (including Navi Mumbai) registered the highest average rate (`7,105) and Goa recorded the highest RevPAR (`4,778) amongst the 13 major markets being tracked in this report. In 2013/14, most hotel markets
witnessed an increase in occupancy with the exception of Chennai and also Jaipur, which displayed muted growth. However, on the other hand hotel markets other than Goa and Agra witnessed a drop in average rate, testament to our stance on domestic tourism to be a driving force for the industry going forward. Agra, NOIDA (including Greater NOIDA) and Goa were the only major hotel markets in the country to record notable RevPAR growths in 2013/14. Chennai was the only hotel market to have declined in both occupancy (7.5%) and average rate (9.2%) owing to a notable, growth in supply (12.2%). Even though NOIDA (including Greater NOIDA) witnessed the highest growth in supply (33.1%) in 2013/14, it recorded the highest increase in occupancy (21.1%) due to a rise in demand from the MICE segment, consequently resulting in the highest RevPAR growth (7.4%) across the country. This report also presents hotel occupancy for 13 key cities in India between 1995/ 96 and 2013 /14. Figures 20 and 21 show average r a t e s f or e a c h o f t h e s e h o t e l markets, expressed in Indian rupees and US dollars, respectively. Figures 22 and 23 present the corresponding RevPAR data for each city. City Trends A “must-see” leisure destination in India, Agra recorded an occupancy
of 60.6% in 2013/14 (an increase of 2.9% when compared to the previous year), accompanied by a moderate increase in average rate (2.1%). A city highly dependent on the Leisure segment owing to the presence of three world heritage monuments, Agra has witnessed a slight change in its customer mix over the last two years. The slowdown in the growth of the Foreign Leisure segment has been cushioned by the rise in the Individual Domestic Leisure a n d MIC E s e gm en t s c our t e s y the improved road connectivit y to Delhi-NCR. Going for th, the commencement of electronic travel authorisation (ETA) to citizens of 180 countries is likely to provide a fillip to foreign traffic to Agra, an essential component of the famous “Golden Triangle” itinerary. Agra remains the only major hotel market that has not witnessed growth in branded hotel supply in 2012/13 and 2013/14. We are tracking a proposed supply of 990 rooms of which 82% is actively under development. A unique feature is that all of this supply is anticipated in the midmarket and budget space. HVS believes that this development trend presents an excellent opportunity for the hotel market to continue to tap demand from the rising Domestic Leisure segment in the country. However, the destination still lacks an international airpor t.
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INDUSTRY REPORT Plans for construction of a new civilian terminal announced in 2013 are yet to see any headway. Overall, the growing middle class and the anticipated boost from the ETA schemes together with the development of suitable hotel
products leads us to believe that Agra will continue on its growth trajectory in the long run. Ahmedabad witnessed a 12.1% increase in supply in 2013/14 over the previous year. Despite this double-digit grow th in supply,
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the city maintained its occupancy level as a result of robust growth in demand (13.1%). This increase in demand was primarily driven by the emerging business district of SG Highway along with new manufacturing plants being set up
in the industrial belt of Sanand-Bol located on the western periphery of the city. However, hotels faced stiff competition causing rate to decline by 7.4% in 2013/14 as compared to 2012/13. Demand in Ahmedabad is generated mainly in the Commercial segment from the traditional CBD areas of Ashram Road and CG Road together with several Grade A office spaces that have developed along SG Highway. The city also caters to a fair quantum of Ex tendedS t ay demand eman a t ing fr om the growing industrial clusters of Sanand-Bol and Changodar. HVS believes that in addition to SanandBol, hotels will start focusing on the planned Japanese industrial estate in Vithalapur. Major companies such as Maruti Suzuki, Honda and Mitsubishi Aluminum Company have announced plans to set up new plants at this estate, which is located 65 kilometres northwest of Ahmedabad. Traditionally, the city’s hotels had catered to some demand from the MICE segment generated by large- scale conventions such as the biennial Vibrant Gujarat Summit and related events held at Mahatma Mandir in Gandhinagar. Going forth, in addition to such summits, we expect the new hotels offering medium-to- large-scale meeting facilities to attract several conferences and social events to the city. With an impending supply of 1,372 rooms (86% of which is actively under construction) likely to enter the market over the next few years, we expect both occupancy and average rates to remain under pressure in the short term. In the long term, as supply pressure eases and the city continues to exhibit strong demand growth, we anticipate the market conditions to improve. Bengaluru, over the years, has emerged as one of India’s most important commercial destinations, home to the offices of several top global conglomerates that have formed large bases in different parts of the city. Bengaluru is divided into well-defined independent micromarkets with overlap in room-night demand being primarily limited to the Ex tended-Stay segment.
INDUSTRY REPORT This segment, in fact, has grown substantially over the last t wo years and we are of the opinion that the city requires more branded E x tended-Stay accommodation across different positioning. B e n g a lur u h a s hi s t or i c a ll y seen a high percentage of upscale room supply ; however, this is now changing with an increasing number of Economy and Budget hotels having recently commenced operations. With their no frills service- design and low cost of operations, these hotels are ideally suited to cater to low- paying IT/ITeS demand which the city thrives on. The 2013 /14 fisc al saw the addition of approximately 1,350 branded rooms. However, in spite of such a large increase in supply, occupancy actually grew by 6% in 2013/14 over 2012/13. Average rates, however, have shown decline, dropping by approximately 9% over the previous year. This may primarily be attributed to new supply being of a lower positioning coupled with ARR pressures being faced by older hotels. Future supply for Bengaluru is estimated to be approximately 7,000 hotel rooms of which only 66% is being actively developed. With overall business sentiment in the city anticipated to further improve in the coming year, we forecast growth in occupancy; however,ARRsareexp ectedtoremainunder pressure in the short term. Amongst the major hotel markets tracked in this repor t, Chennai recorded the highest decline in RevPAR (16.0%) in 2013/14 when c o m p a r e d t o 2 0 12 / 13 . S t e e p decrease in both aver age r ate and occupancy (9.2% and 7.5% respectively) resulted in the sharpest RevPAR drop the city has witnessed in the last five years. After having wi tnessed a he f t y incre ase in supply in 2012/13 (29.1%), the city continued to expand its supply base and recorded a double-digit growth (12.2%) in its second consecutive y e a r ( 2 0 13 / 14 ) . A d d i t i o n a l l y, moderation in the grow th of demand (a meagre 3.8% in 2013/14) primarily due to the slowdown in the manufacturing industry, particularly in the automobile sector, augmented the pressure on average rates, with
hotels scr ambling to maint ain occupancy levels in an increasingly competitive space. With increasing supply, Chennai is segregating into distinct micromarkets. CBD, which has the highest concentration of independently run hotels, saw a significant drop in average rates accompanied by a marginal decrease in occupancy as most hotels focused on adopting a volume-driven strategy. In contrast, Guindy, which witnessed the largest influx of supply, saw an erosion in both occupancy and average rates leading to a sharp decline in RevPAR. OMR, the IT corridor of the city, saw the highest decline in RevPAR amongst all micro- markets in 2013/14, as slow absorption in office space combined with the opening of two new hotels (200room Gateway by Taj and 215-room Westin) resulted in a highly competitive environment. Chennai’s hotel market is expected to become more competitive with around 3,100 new rooms entering the market over the next two-to-three years, and we expect hotels to focus more on occupancy than average rates across all micro-markets in the short-tomedium term. A majority of this supply (60%) is presently under construction along the OMR belt and is likely to keep the city’s occupancy
and average rate grow th muted over the next two-to-three years. In contrast, the manufacturing hubs of Sriperumbudur and Oragadam, which have seen the announcement of several hotel projects, are yet to see any progress and continue to present opportunities for hotel development. The main focus of the Delhi (excluding Gurgaon, NOIDA and Greater NOIDA) hotel market over the past year has been the impact of hotels in Delhi Aerocity (DA). With four hotels having commenced operations during the course of last year, the impact has, in fact, been positive. The city actually recorded a 2.2% grow th in occupancy in 2013/14 over the previous fiscal. The conclusion of the General Elections and its emphatic result is almost certain to have a positive impact on Delhi, which will now attract increased travel to the city and perhaps see increased diplomatic movements. Furthermore, the new ETA Visa scheme for tourists will also likely bode well for hotels in the city. Delhi’s branded room supply has grown at a CAGR of 10% over the last 5 years of which 42% is spread across the midmarket, budget and economy segment of hotels. The city now provides a healthy mix of high and low positioning branded
hotel rooms - a welcome change from previous years where Delhi was dominated by upscale and luxur y products. This, however, has led to lowering of marketwide ARRs with 2013/14 witnessing a 6% drop over the previous year. Room night demand growth, however, has continued to be healthy, growing by a CAGR of 8% over the last 5 years. Future supply for the cit y is estimated to be approximately 5,300 hotel rooms of which 71% is being ac tively developed. A significant por tion of this new supply is concentrated in DA and is anticipated tocommence operations over t h e n ex t t wo ye ar s. We, therefore, forecast occupancy and rate pressures in the short term as these new hotels enter the market; however, our medium-to-long term view for Delhi at large remains positive. Gurgaon (including Manesar) has gained prominence as one of the leading commercial hubs in the country. The growth of its hospitality sector has been closely linked to the economic health of the city and country on the whole. After having witnessed a decline in marketwide parameters in 2012/13, Gurgaon bounced back in 2013/14 exhibiting a 2.9% increase in marketwide o c c u p a n c y o v e r t h e pr e v i o u s fiscal. This, however, was at the
September 2014 • HOTELSCAPES 39
INDUSTRY REPORT cost of a 7.8% decline in average rate. During this period, owing to economic and political uncertainty coupled with supply pressures, most hotels gave preference to contracted room nights from the relatively low-yielding Airline and MICE segments in order to maintain baseline occupancy levels. Also, to mitigate the occupancy differential between weekdays and weekends, hotels pitched lucrative packages to leisure travellers during the weekend in an attempt to displace demand generated by this segment from hotels in central and south Delhi. As Central Business District (CBD) areas such as Cyber City and Udyog Vihar become congested and less affordable, various companies have started exploring the other peripheral parts of Gurgaon which offer financially lucrative deals. With the majority of new commercial and residential development taking place in these peripheral parts of the city located along Sohna Road, Golf Course Extension, Southern Periphery Road and parts beyond the Kherki Daula Toll Plaza, we expect the creation of multiple secondary feeder markets for room night demand in the medium-to-long term. While supply for room nights in the city is expected to increase by 63% over the next five years, a modest 54% of this pipeline is under active development. This ratio, which is significantly lower than the nationwide average, is reflective of developer uncertainty regarding the fate of the hospitality industry in Gurgaon in light of the development of qualit y branded hotels at Aerocity. HVS believes that while the development and commissioning of hotels at Aerocity is expected to put some pressure on hotels in Gurgaon, especially in segments such as Airline and Meeting and Conferences, this impact is expected to be short-lived. With the country’s economy on the path to recovery, demand for room nights in Gurgaon is expected to outpace its supply in the medium-to-long term. Also, for m a t i on o f a l t er n a t e f e e d er markets within the city is expected to further insulate the market from any external supply threats. All these factors, coupled with the doubling
of office supply over the next five to seven years, indicate Gurgaon’s potential of becoming one of India’s strongest hotel markets. N O I D A ( i n c l u di n g G r e a t e r NOIDA ) su f fer ed the s teepes t decline in average rate (11.3%) over the previous year, reflecting the trade-off the hotels made in order to record the highest increase in occupancy (21.1%) and RevPAR (7.4%) amongst all the markets tracked by us this year. This can be attributed to the increase in MICE demand within the city, coupled with a decrease in the relatively higher paying commercial demand from the neighbouring pockets of Ghaziabad and East Delhi owing to the opening of branded hotel rooms in those areas. M o r e o v e r, e v e n t s s u c h a s the Au to E x po, Pe trotech and Indian Grand Prix - Formula 1 that contributed to the overall MICE demand in the recent past are unlikely to be hosted this year. This, coupled with approximately 1,700 rooms under active development that are anticipated to open over the nex t five years is worr ying, especially as the proposed hotels have large inventories. Keeping in mind the hotel market’s highly price-sensitive nature and lack of any substantial growth in demand, we anticipate hotels to have little choice but to fur ther tap the MICE segment, which includes a limited number of large-format events scheduled to be hosted at the India Exposition Mart and Buddh International Circuit. In the short-to- medium term, we expec t market wide occupancy and average rate to come under pressure. Goa holds the distinction of being the only market in the country that has witnessed a continuous increase in RevPAR over the last five years, exhibiting a healthy 6.9% year-on- year growth. Many factors, such as strong growth in charter movements, an upswing in domestic consumption patterns and the promising growth in the Meeting and Conferences segment, have favourably impacted India’s most preferred leisure destination. In 2013/14, on account of a 5.2% growth in demand for room nights
40 HOTELSCAPES • September 2014
along with a 3.3% growth in its supply, both marketwide occupancy and average rate for Goa increased by 1.8% and 4.5%, respectively. Even with a strong base of unbranded supply, the latent demand for branded rooms became apparent during this period with absorption levels of newly commissioned hotels touching the 65% mark, a number that was significantly higher than the nationwide average. On the supply front, of approximately 2,291 rooms that are proposed to be developed, about 68% are under active development and are likely to enter the market over the next three to four years. Going forward, as year-on-year growth in demand for room nights is expected to outpace its supply, the uptrend in market performance is likely to continue in the short-tomedium term. While demand and supply dynamics are anticipated to pan out positively for the hotel market in Goa, a major hurdle in its sustainable growth continues to be the lack of quality infrastructure. Even though the government has taken measures such as the development of a new terminal at Dabolim airport, a lot more needs to be done, especially in light of the increasing competition Goa faces from other beach destinations in India and South Asia. Hyderabad, after continuing to see a drop in room night demand for the last two years, Hyderabad w i t n e s s e d a 7. 5 % g r o w t h i n marketwide occupancy in 2013/14. This is indicative of the recovery the city is anticipated to make post the conclusion of Telangana political crisis that had plagued the city for the last few years. Hyderabad offers some of the countr y’s best infrastructure in terms of road connectivity, airport access and planned developments, especially in its periphery areas like Gachibowli and HITEC City. It is also home to the India’s only branded convention centre – Hyderabad International Convention Centre (HICC). The improved political situation should hopefully help HICC, which had witnessed a drastic drop in the number of events hosted over the last two years. ARRs in Hyderabad, however,
continue to witness year-on-year decline. Hotels have opted to adopt volume-based strategies especially in the wake of the slowdown in demand. Furthermore, approximately 60% of the recently opened supply in the city is spread across the midmarket, budget and economy segment of hotels. This has led to a further lowering of marketwide ARRs. H yder abad is slated to add approximately 2,900 hotel rooms over the next five years of which approx ima tel y 78 % ar e under active development. Our forecast for the city in the short term is for occupancy to improve with ARRs still being under some pressure. As HICC starts hosting more events and Hyderabad’s association with political issues of the past fade from memory, we anticipate overall RevPAR for the city to improve. Jaipur, one of the top leisure markets in the countr y and an integral part of the Golden Triangle itinerary, recorded an increase of 9.5 %insupplyin2013/14overtheprevious year. In contrast to 2012/13, where the city saw the addition of upscale/ luxur y hotels, it witnessed the introduction of hotels positioned in the economy and budget space such as Ibis, Ginger and Regenta Central in 2013/14. Demand during 2013/14 also increased by 9.5% resulting in the citywide occupancy remaining unchanged over the previous fiscal. The grow th in demand was led primarily by the Domestic Leisure and MICE segments. The burgeoning middle class and growth of domestic travellers compensated for the slow increase in the Foreign Leisure segment in the city. Jaipur continued to grow as a popular weddings and conference destination with hotels such as the Fairmont, Marriot t and Radisson BLU playing host to several large-scale events. However, the price sensitive nature of MICE demand coupled with the opening of lower- positioning hotels resulted in a decline in the city’s average rate by 4.5% in 2013/14. Going forward, over the next two-to-three years, we expect an addition of about 1,400 rooms in the city. With an anticipated double-digit growth in supply, occupancy and average rates are likely to remain
INDUSTRY REPORT under pressure in the short term. However, with the continuing growth of the Domestic Leisure segment and the likely impetus in the Foreign Leisure segment from the E TA facility for citizens of 180 countries, we expect Jaipur to continue to grow as a strong Leisure market. Kolk a t a is the onl y ci t y in the countr y that has recorded occupancy levels northward of 70% in the last three years in spite of a 12% CAGR increase in supply during the same period. This is testament to strong growth in new room night demand coupled with previously unaccommodated demand that was being catered to by the unorganised sector of hotels. ARR growth, however, has been muted. While the previous fiscal (2012 /13) witnessed negligible growth in ARR, 2013/14 witnessed a sharp decline of approximately 7%. Hotels have felt threatened by the entry of new supply in the past year, almost all of which has been in the midmarket segment. Consequently, in order to maintain their previous occupancy levels, older hotels have dropped ARR. W hil e ar e a s like S a l t L a ke have seen a spurt of commercial development and the setting up new offices, other periphery areas like Rajarhat (New Town) remain untapped. There have been plans of developing a large world-class convention centre in Rajarhat ; however, currently there has been no progress on this project. Future supply for the cit y is estimated to be approximately 2,500 hotel rooms of which 72% are under active development. A large percentage of this new supply is upscale in nature and, therefore, the city now faces a situation of being over-supplied in this segment. Given the nature of demand in the city which primarily stems from the low- paying PSU and IT/ITeS segments, Budget and Economy hotel developments are the need of the hour. We forecast pressure on both occupancy and ARR for Kolkata in the short term with theentry of six new hotels over the next 2-3 years. As supply pressure eases and areas like Rajarhat start developing, hotel market performances are likely to improve.
Mumbai continues to retain its position as the largest hotel market in the country. As the commercial capital of India, the growth in yearon-year accommodated demand continues to be robust. Successfully absorbing the CAGR 3.9% increase in supply over the last three years, the city-wide occupancy has grown by 2.5% CAGR during this time. Even though Mumbai achieved the highest average rate (`7,096) amongst the cities tracked by us in this survey, the city has seen a correction in average rate with most properties giving precedence to occupancy over average rate. A notable obser vation is the resurgence of demand amongst the South Mumbai hotels that witnessed an increase in occupancy by approximately 7% over the previous year, whereas average rate exhibited a marginal drop of 0.4% at the same time. This demand stemmed from the Leisure, Social MICE and Commercial segments. In 2013/14, Central and North Mumbai hotels displayed an increase in occupancy of 4% over the previous year; however, average rate witnessed a drop of approximately 7%. Over the last few years, the various micro- markets in Mumbai have seen continuous additions to office stock that has further fueled demand for hotels. Majority of the new supply expected to enter the Mumbai market is located in BKC, Andheri, Juhu and Santa Cruz. In 2013 /14, Mumbai recorded the least supply increase across the country, with additions primarily being on account of expansions and renovations at various hotels. However, increase in supply over the short term includes the JW Marriott and the Taj Airport Hotel at the two airports and Radisson Blu Plaza in Kanjurmarg. In the medium-tolong term, there is the likelihood of hotel developments at the Mumbai International Airport, Bandra-Kurla Complex and Lower Parel. The newly opened Terminal 2 and the proposed convention centre currently being developed near the domestic airport are further expected to augment Airline and MICE demand for the city. Moreover, with improvements in infrastructure such as the development of the
Metro and Monorail, up gradation of the existing Airport and opening of the Santa Cruz-Chembur Link Road and Eastern Freeway, our outlook for Mumbai remains optimistic. Navi Mumbai was developed to facilitate the decongestion of Mumbai and has grown rapidly in the past few years with the proliferation of residential and commercial units in addition to a planned international airpor t. However, it faces poor connectivity with Mumbai, with only two road links and a single rail line between the cities. The Navi Mumbai hotel market continues to be dependent on several unbranded hotels with Commercial and Ex tended-Stay demand contributing over 90% of the accommodated demand. In 2012/13, majority of Navi Mumbai’s planned supply entered the market, with the opening of hotels such as the Ibis, Country Inn & Suites and Royal Tulip. The total number of branded rooms recorded in 2013/14 was approximately 1,000 (located in Vashi, CBD Belapur, Kharghar, Mahape, Kopar Khairane, Turbhe and Palm Beach Road). In the next few years, approximately 800 branded rooms ranging from budget to midmarket categories have been proposed; however, their development is expected to be slow paced. Over the last few years, Navi Mumbai has witnessed a notable increase in commercial activity, with developments such as Jawaharlal Nehru Por t (JNPT), Mindspace, Millennium Business Park and the Reliance Technology Park that have heavily contributed to the growth in hotel demand. Going forward commercial development in areas in and around CBD Belapur and the proposed Seawoods project in addition the proposed Exhibition Centre are expected to augment Commercial and MICE demand. In the long-term, this market’s gr ow t h l ar g e l y hin g e s on t h e development of the new international airport at Panvel that has already witnessed several delays and is yet to commence construction. In the short-to- medium term, we expect marketwide occupancies to increase; however, we expect average rate to remain under pressure.
Pune, Despite a double-digit growth in supply (15.8%), Pune maintained its occupancy in 2013/14. Moreover, further decline in average rate was arrested in 2013/14, a first since 2009/10 for this otherwise seemingly free-falling market. Healthy growth in demand (15.8%) has aided the city’s hotels to grow their occupancy base with minimal rate correction despite increasing supply. This increase in demand has been mainly seen in the MICE, Commercial and Extended Stay segments. The cit y has successfully established itself as a popular MICE destination for large-scale corporate events and weddings in the country over the past few year s. Also, despite the slowdown in the automanufacturing sector, Commercial and Extended Stay segments saw strong increases owing to the rising IT/ITeS sector especially in the city’s eastern and western parts. Several large companies are choosing to set up their back office operations in Pune, owing to the availability of large floor plates in commercial buildings, lower rent als when compared to Mumbai, relatively good connectivity and a burgeoning talent pool emanating from several educational institutions present in the city. Going forth, we expect this trend to continue. Rise in industrial output in April-May this year also leads us to believe that growth in the manufacturing sector, a major contributor of demand to hotels, is on the anvil. On the supply front, the year 2014/15 is expected to be a unique one for Pune ci t y as no large branded hotel is anticipated to commence operations in the first half of the fiscal. With a slowdown in supply and a continued increase in demand, we expect occupancy across the eastern and central micro-markets to pick up. We also anticipate average rate to improve gradually as hotels get the muchneeded break from new- supply pressure. Considering over 50% of the proposed supply currently being tracked by us is planned in Hinjewadi, we are of the opinion that over the next two-to-three years, occupancy and rate pressure will shift to the west before stabilising in the long term. HS
September 2014 • HOTELSCAPES 41
TRENDS
Hotels push for more revenue with half day concept Today, hoteliers are constantly innovating and looking for new streams of revenue generation. The ‘day-concept’ in hotels originally belonged to airport hotels. It is now gathering momentum among city hotels, notably the business traveller. Particularly useful for businessmen on a day trip when they are meant to return home the same evening. HotelScapes catches up with some of the practitioners.
The concept of ‘Halfday’ accelerating more revenue
Rajat Tuli, Director, Operations & Officiating General Manager, Hilton Jaipur says “Jaipur being a leisure destination the demand for day use/half-days room is not very high and for the same reason it’s not a high revenue generating segment for us. As per the current trend, distance and flight schedule put together the ‘Half-day’ rooms are majorly required by guest travelling from Delhi or from other cities within the state to Jaipur, being a capital of Rajasthan and a hub of admin offices.” Half day or the day concept
is a slow catching trend that we can observe in our country. This concept allows guests to save cost at the same time gives the hotel the opportunity to double sell a room. “Offers like these are irresistible for those who would not want to pay for an overnight stay, especially when they would only be using the room for a few hours. As the name suggest ‘day use room’ does help to increase our ADR’s”, says, Anuraag Bhatnagar, Area General Manager, Westin Mumbai Garden City & Westin Pune Koregaon Park. Maahesh Aiyer, Chief Operating Officer, Lemon Tree Premier
Grand Lobby, Hilton Jaipur
42 HOTELSCAPES • September 2014
believes “half-days are mostly used by transit-travellers on the move, either going out or coming into the city. They need a place to refresh themselves or get a quick nap and wash and change themselves for their next pit stop. This is the need we are tapping into.” Transit rooms’ or ‘day use rooms’ are usually booked by business travellers, lawyers, consultants etc. who have few hours for wash and change before embarking on their next round of meetings or catching a flight. “ We g e t d a y u s e r o o m bookings from guests who are booking our venues for banquet functions. Celebrities and VVIPs
usually book suites for day use. Besides luxury, the suites provide them the privacy to do their interviews, meetings etc. The concept of day use rooms has been there since our inception, with an average of 5 to 10 rooms per day booked for day use”, says Vivek Shukla, General Manager , The Lalit New Delhi. The Lalit Suri Hospitality Group offers day stay rooms in all its city hotels in New Delhi, Mumbai, Bangalore, Chandigarh and Kolkata.
Who are using ‘halfday’ package
Tuli says “Majorly the corporates
The Westin Mumbai Garden City
TRENDS the guests who are always on the move. Aiyer says “ Being strategically located just 5 minutes away from both airports and in close prox i m it y to bu si ne ss a nd entertainment hubs in Gurgaon and Delhi, we receive a mix of transit, corporate as well as leisure travellers; just anyone who is moving in and out of the city.”
Rajat Tuli
Anuraag Bhatnagar
Maahesh Aiyer
Chief Operating Officer Lemon Tree Premier
Director, Operations & Officiating GM Hilton Jaipur
Area General Manager, Westin Mumbai Garden City & Westin Pune Koregaon Park
Majorly the corporates opt for ‘Half-Day’ or ‘Day-Use’ rooms as it gives them the opportunity to refresh after a possible flight or train.
Offers like these are irresistible for those who would not want to pay for an overnight stay, especially when they are using the room for a few hours.
Half-days are mostly used by transit-travellers on the move, either going out or coming into the city. They need a place to refresh themselves or get a quick nap.
opt for ‘Half-Day’ or ‘Day-Use’ rooms a s it gives them the opportunity to refresh after a possible flight, train journey or drive and relax between meetings. Very often, it also allows guests a base from which to conduct
meetings when visiting a city for the day. Also, celebrities and dignitaries on their religious visit to Ajmer Sharif and Celebrities visiting Jaipur for their movie promotions mostly take day use room.”
Bhatnagar also believes that the day use room concept is widely accepted by the corporates and the transit guests. It is an ideal fit for those who would like to revitalize before they enter into their next meeting. These are
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The strategy and discounts offered
Tuli validates “for day use room we do offer 50% off the BAR (Best Available Rates) at Hilton Jaipur, with this special package guests are able to enjoy all amenities and services provided in a guestroom from 10am - 6pm . Guests are also offered complimentary use of the Business Centre, Fitness centre and Pool while spa and other services are charged per use.” However according to Bhatnagar, the approach is to attract the niche crowd to avail this service, we usually offer 3040% discount on the best available rate depending on the room selected.”
Lemon Tree Premier, Delhi Airport poolside
September 2014 • HOTELSCAPES 43
TRENDS Aiyer states that it’s not a discounted rate it’s a 6 hours rates that they offer at 60% of their best available rates and include a few value add-ons like a meal or an airport transfer or a jet lag massage. It’s a pick and choose package. We let the customer customize and pay. Shukla believes, “we charge 1015% less than the best available rates. Rates vary from city to city as per the requirement and inclusions. The average duration of stay is 4-5 hours.”
Possibilities of getting more customers
“ I t ’s t o o e a r l y t o p r e d i c t anything on this, as we are just 3 and half months old and still understanding the city trend. But with growing commercial i n f ra s t r uc t u r e i n t he c i t y we expect a good increase in
corporate movement and it may help this concept as well. We do have some queries for the conferences with day use room, where people from different cities of Rajasthan will be participating, but nothing has confirmed yet”, says Tuli. “ T his concept is here to stay and with the fast growing cor porate world t here w i l l be an increase in number of customers to avail this package/ service. This kind of concept is an ideal fit for business travel and will thus help us in return to add up to the revenue. To understand the concept, a single room can be charged twice. Also, when the room is used for the day use concept it is not occupied for the night usage and can be sold to the other customer. The more the customer gets acquainted to the services offered, more number of
THIS CONCEPT IS AN IDEAL FIT FOR BUSINESS TRAVEL AND WILL THUS HELP US IN RETURN TO ADD UP TO THE REVENUE.
The Lalit New Delhi
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transit/business travellers would opt for this service,” validates Bhatnagar. According to Aiyer, “It will drive more customers, if someone has to sleep the night they will. So it’s going to be incremental.”
Chances of getting this offer misused by anti-social elements/ undesirables
Hilton Jaipur is always very particular about the guest profile and they do a careful screening while taking such requests.” Bhatnagar also validates that they are extremely careful with offering this service to a select few. The clientele that uses this service at their hotel is still a very niche segment. To do away with the undesirable there is a screening process is in place and thus it prevents from it being misused. Aiyer says “this is highly improbable and just not possible. At Lemon Tree Hotels, our security checks are of the highest order. The security arrangements
Vivek Shukla
General Manager The Lalit New Delhi
We get day use room bookings from guests who are booking our banquet. Celebrities and VVIPs usually book suites for day use.
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at our hotels are world class and equip us to deal with any kind of situation. So, if you use the room for one hour, one day or a month the security checks are the same.”
Modes of advertising this package
At Hilton Jaipur they have this offer available with 50% off the BAR. No active promotions are planned at the moment as they have to yet understand the travel patterns for Jaipur in peak season and off shoulder months. Bhatnagar says “Our Hotel booking can be easily done through various platforms like the Starwood app, our Hotel Website etc. though as mentioned this package is only available for a niche segment and hence it is only given to a select number of people visiting the property.” At Lemon Tree Premier they are advertising this package via online and through their agent partners.” However at Lalit, New Delhi, this package is not advertised. HS by ANUPRIYA BISHNOI
ZUBIN MEHTA (MD & CEO)
TRENDS
Antony Page
General Manager, JW Marriott Hotel New Delhi Aerocity
The contemporary war
standalones v/s hotel restaurants
Standalone restaurants are out in the battle field, fighting at par with top-notch restaurants of the old-school five stars. While, it has become convenient for the guests to dine at branded restaurants, years of patronage of the hotels seem to be in jeopardy. There is much more than this, to what we actually know, and to find exactly that, we talk to some of the select hotels of the Capital. We understand from them, about the impact of these standalones and the potential impact it can have on their businesses and whether they see the latter as a potential threat.
J
W Marriott New Delhi Aerocity houses a unique set of Food & Beverage outlets, including a celebrity chef run fine-dining restaurant- Akira Back, serving Japanese cuisine with a Korean essence, a food theatre style coffee shop- K3, serving North Indian, Cantonese and Italian cuisines, a cosy bakery and delicatessen – Delhi Baking Company, serving expertly crafted sweet treats, a sprawling lobby lounge and bar – JW Lounge and Oval Bar, a regal whisky bar, serving premium spirits. “With this wholesome set of
offerings on the Food & Beverage front, coupled with authentic décor, efficient service and an expert team of chefs behind the culinary excellence, we welcome comp e t it ion f rom t he new speciality restaurants which acts as a motivator for us to provide ou r pat rons w it h new a nd improved culinary experiences”, says A ntony Pa ge, G e ne ra l Manager, JW Marriott Hotel New Delhi Aerocity. The Taj Mahal Hotel has brought to its patrons those restaurants that are known as dining destinations of the capital. Each restaurant has established
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a distinct identity and a strong presence in the domestic and international scenario. Machancity’s preferred International style coffee shop, The House of Ming – Delhi’s first premier Chinese restaurant, Varq – the Modern Indian Gourmet restaurant, Wasabi by Morimoto – Delhi’s first contemporary Japanese restaurant, Emperor Lounge for choicest teas and coffees and Ricks- the stylish urban lounge bar. Satyajeet Krishnan, General Manager, The Taj Mahal Hotel, New Delhi, says ‘’The Taj Mahal Hotel’s culinary range offers several choices. Authenticity,
We welcome competition from the new speciality restaurants which acts as a motivator for us to provide our patrons with new experiences .
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excellence in service, artistry and innovation in cuisine have remained our key focus that come together to create a dining experience that makes the hotel the city’s dining destination of choice. While we like to constantly reinvent ourselves and craft new dishes and menus for our patrons, we ensure that our signature dishes do not lose their element and retain their originality. Also, we lay great emphasis on frequent & focused interactions with our patrons that provides valuable insights on
TRENDS
Vijay Wanchoo
Sr. Executive VP and General Manager, The Imperial, New Delhi
their experience, expectations, new trends and the evolving taste of our customers.’’ The Sunday brunch at 1911 at The Imperial features various live counters, cheese display and an exotic style of buffet presentation. Spice Route – South East Asian Restaurant features unique menus designed by the celebrity chef Veena Arora, amongst which summer collection and winter collection menus have been an all-time famous annual feature of the restaurant. At The Imperial they also attract and create loyalty groups. For e xa mple t he I mp e r ia l Culinary Club was formed with a view to create a group of loyal Ladies and share with them subtle
nuances of our popular recipes, though selectively. “The food and beverage outlets are evolving worldwide with different concepts and even the guest are well aware of the trends since they are well travelled. To keep up with the competition you need to stay ahead. The essence of our award-winning restaurants lies in their popular menus, the portrayal of their art and architecture, and the basic concept which makes for a stellar dining
Satyajeet Krishnan
General Manager, The Taj Mahal Hotel, New Delhi
While we are always looking to enhance our culinary expertise to delight our patrons, certain delicacies have been a constant on our menu.
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experience for any connoisseur. Also when all this comes within the precincts of an iconic hotel like The Imperial, it’s indeed a distinct culinary journey”, says Vijay Wanchoo, Sr. Executive VP and General Manager, The Imperial, New Delhi. Hyatt Regency Delhi houses restaurants like La Piazza which has completed 20 years and TK’S Oriental Grill which will soon be celebrating its 20th Anniversary; The China Kitchen that has been one of the revered authentic Chinese dining venue since its opening seven years ago. The success of each of these restaurants is a testament to the strong brand recall, which in turn is a reflection of great concepts that have managed to maintain a high level of consistency in service delivery over the years. “Each of these restaurants has been known for its unique concepts and authentic cuisine. Though from time and again we have revised the menus to suit every demand the unique concept of each restaurant has remained the same’’, says Aseem Kapoor, General Manager, Hyatt Regency Delhi.
Keeping the popularity intact
A number of food festivals,
The food and beverage outlets are evolving worldwide with different concepts. To keep up with the competition you need to stay ahead.
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theme-specific promotions are hosted at JW Marriott Aerocity which focuses on details like décor, uniforms, table set-ups etc. to be able to provide our patrons with an authentic dining experience. ‘’We also provide our guests with the opportunity to sign up for the Club Marriott membership, wherein they collect points on their membership card and are, bases these points, eligible to receive fabulous discounts and privileges on the Food & Beverage offerings of the hotel. Apart from this, our associates make it their constant endeavor to ensure our guests our pampered and leave with a lasting memory of their dining experience with us’’, adds Page. Eve r y res tau ra nt at T he TajMahal Hotel is known for its beautiful ambience, specially cra f ted delicacies and an authentic culinary experience. Machan and House of Ming have always been a popular destination for the guests to dine, socialise and celebrate special occasions. “We at the Taj Mahal New Delhi believe in staying relevant
September 2014 • HOTELSCAPES 47
TRENDS
Aseem Kapoor
General Manager, Hyatt Regency, Delhi
and consistent. We design food & beverage promotions and customised offerings, which introduce new concepts and flavours. While we are always looking to enhance our culinary expertise to delight our patrons, certain delicacies have been a constant on our menu as they remain strong favourites. Star dishes such as the Fish ‘n’ Chips, Thai Curry, Pav Bhaji, Kanha Kathi Delight, The Bulls Eye are served at the evergreen Machan since 1978’’, adds Krishnan. T h e Ta j M a h a l H o t e l gave Delhi its first 24 hour international eatery with the opening of Machan. Varq, the award winning modern Indian gourmet dining destination, changed the culinary landscape by offering unmatched artistry in presentation, unique and authentic flavours along with distinctive concepts such as tea pairing, live dessert station and Varq’s bespoke dining experience. Wanchoo says “the restaurants at The Imperial enjoy a strong equity for many years and we make sure the fondness remains with delectable offerings and impeccable service at each of our restaurants. Our endeavour is to make sure that each guest visiting our restaurants carries an unforgettable memory whether
t hey d i ne i n t he b eaut i f u l courtyard of San Gimignano relish ing aut hent ic Tusca n cuisine or feel satiated with the Breakfast in the sun kissed 1911 verandah. A relaxed afternoon high-tea at The Atrium creates just the right atmosphere for a meeting of any kind. Daniell’s’ Tavern- Our Pan Indian restaurant serves traditional Indian recipes taken from the diaries of Thomas and William Daniell (landscape artists during raj era) while Nostalgia at 1911 Brasserie is the only restaurant in the city to offer a classic European cuisine with old and new age wines, complemented with live piano or saxophone music. All these finer nuances make dining at The Imperial, an affair to remember.’’ Kapoor believes that in terms of restaurants, great concepts that manage to retain a high level of consistency in service delivery helps prepare a recipe of success. However, a lot is dependent in getting the basics right, starting from the sourcing of the right quality of ingredients to preparing cuisines in authentic style. “A de d icate d tea m , consis tent service delivery, the execution of in novat ive idea s (wh ich in turn boosts brand recall) helps to retain a restaurant’s popularity. Creating a restaurant
48 HOTELSCAPES • September 2014
t hat ot hers ta lk about a nd willingly recommend to others is paramount for a restaurant’s success”, he adds.
Impact on the business
Page says “We do not consider the cropping of speciality restaurants to a f fect our popula rity or restaurant sales, as we have over the span of a few months f rom op e n i ng , ma na ge d to cement relationships with our loyal patrons, who immensely appreciate our Food & Beverage offerings. We look at competition as a motivator to improve our Food & Beverage standards, so as to garner long-lasting customer relationships. On a business front, we also ensure that there is constant innovation on our menus and service standards to meet the growing needs of the customer.” However Wanchoo says, “we do not see the standalones as our competition as the format is completely distinguished. Standalone restaurants are often visited by all age groups of people, especially if it’s a new entrant in the market. I appreciate the innovations in the cuisine which the stand alone restaurants are coming up with but for a hotel like ours, the dining is meant
A dedicated team, consistent service delivery, the execution of innovative ideas helps to retain a restaurant’s popularity.
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for mature TA, catering to the premium segment and therefore enjoys a commendable brand loyalty.” A lso, we spoke to selec t restaurants of the Capital and ask them about their bourgeoning upper hand over the five stars, where their services are at par with them.
Why restaurants at par with five star hotels
AD Singh, Olive Group says, ‘’In the early 90’s the first wave of
TRENDS
Saurabh Singhal General Manager Benihana India
standalones opened but it wasn't till approximately 2000 that a few really good standalones opened and shook up the hotels. This forced them out of their lethargy and they responded by greatly improving their F&B products. Since then both have maintained high standards and there are very good places in both categories today”. Saurabh Singhal, General Manager, Benihana India, believes “the standalone restaurants are at par today with the five star hotels due to the various reasons. There has been a major development in the standalone restaurants business especially after the entry of global chains like Benihana, TGIF, Hard Rock Café. Non-
resident guests who form the back-bone of any hotels’ restaurant now find them cumbersome i n t e r m s o f a c c e s s i b i l i t y, secur it y a r ra ngeme nt s a nd even ambience. Also, a major shift has been observed in the dining preferences of the general clientele in the market which is now looking for more casual options available outside the five star hotels which are at times even better in terms of their cuisine and service standards. There is also some kind of affordability attached to the
AD Singh Olive Group
Much of the emerging market prefers casual, affordable places and stay away from five stars.
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standalone restaurants which given them an edge over the five star hotels.
The growing popularity of standalones have already started to have an impact on the clientele of five star hotels.
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Growing popularity of standalone Future of standalone impacting the old restaurant business patronage of five stars Singh says, “hotels have certain Singh says “There’s no doubt that standalone restaurants are effecting the patronage of five stars. If it wasn’t for their in house guests many hotel restaurants would struggle. Much of the emerging market prefers casual, affordable places and stay away from five stars. I see that a good option for hotels is to partner with entrepreneurs to create fresh spaces with a wider appeal.” However Singhal opines, “the growing popularity of standalones have already started to have an impact on the clientele of five star hotels. This is particularly visible now what with the new hotels generally opting to have just one or two dining restaurants in their property along with the all-day coffee shop. Even the launch of new dining concepts among the standalones is veering away the five star clientele as seen with the opening of Benihana in New Delhi, which is the world’s largest Teppanyaki chain where most of the dining guests visit from the nearby five star hotels.”
advantages and budgets but apart from a few groups the rest need to develop better products to maintain their profitability and position.” The future clearly belongs to the standalone restaurants which are powered by exciting concepts and the youthful energy. Singhal says, “restaurants at five-star hotels are no more the big draws they once used to be. Top hotels in India are now opening fewer in-house eating houses, as speciality restaurants mushrooming all across towns, are luring away diners and eating into their revenues. Even the newest talents in chefs are inclined towards the standalone restaurants which give them more exposure. This trend is already visible with the hotel chains reworking their F&B offerings. The all-day dining restaurants are slowly transforming to include speciality menu and dishes, which save the cost of building a separate restaurant. Hotels are expanding their banquet space while reducing the number of restaurants.” HS by ANUPRIYA BISHNOI
September 2014 • HOTELSCAPES 49
ONE-ON-ONE
In conversation with a leader in the “coffee shop culture” in the capital Quite frequently talked about topic, ‘coffee shops inside hotels’, still has our attention. From their evolved nature to their offerings, we are covering almost every aspect related to them. But how it all started? From where has the commercialisation and touting of coffee shops began? HotelScapes talks to Meena Bhatia, spokesperson of one of the pioneers of ‘coffee shops’ in the capital, Le Meridien, where she explains how the journey began for them and much more!
Q &A Meena Bhatia
Vice President - Operations & Marketing Le Meridien, New Delhi
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T
he lobby coffee shop at Le Meridien has changed the coffee culture of the Capital. What do you think are the reasons that have contributed in making this coffee shop distinct?
The coffee shop, what we basically refer to as Longitude, is a concept of Meridien globally. These coffee shops are based in the hub of all the Meridiens, and these hubs are typical places where people come to have coffee and enjoy their cuppa over some engaging conversations. Art inspired décor pieces surround Longitude and the entire hotel. So what you see here, is a part of Meridien hub, where art is something which is not just hanging on the wall but for us, art is the furniture, the flooring, designs of the bar itself and longitude bar is typically a coffee shop during the day and its oozes bar like warmth in the evening. When we star ted the coffee programme here 5 years back, the idea was to introduce coffee as a drink that is not so popular with Indians. Because coffee was and is something which Meridien hotel globally embrace and we work with one of the best coffee companies in the world which is Illy. Meridien trains coffee baristas globally. We have a qualified barista in our hotel who has been trained by Illy. This barista does standard recipes which are standardised for Meridien Hotels globally and also innovate free-style recipes for the local market. So that’s what our baristas have been doing for
the last few years. Baristas at Meridien have also the opportunity to participate in the taste of the discovery contest where all the baristas of the Meridien come and present their coffees.
C
an you explain the design element to us?
Meridien family has art inspired hotels around the globe. The décor the hub, now called as Longitude itself is very unique. The floor itself is like a canvas, instead of just a floor. Also the furniture placed in the Longitude along with the art pieces that surrounds the hub are art inspiring. This place stimulates the “art” inside our guests and they can relax and have a tête-à-tête with their colleagues or friends. That’s how we create interesting elements into the design of the hotel.
W
hat is the target clientele of your coffee shop?
Target audience of Meridien is the local
community, who would come and meet friends and enjoy a cup of coffee and can get inspired from the art and designs around.
W
hat do you have to say about the changing coffee culture in hotels where coffee shops are evolved into much more than just a place to have a coffee?
Couple of years ago, coffee was really not popular in India. Of course the Baristas and Café Coffee Days have helped in
Meridien trains coffee baristas globally. We have a qualified barista in our hotel who has been trained by Illy. This barista does standard recipes which are standardised for Meridien Hotels globally and also innovate free-style recipes for the local market.
50 HOTELSCAPES • September 2014
”
ONE-ON-ONE
Coffee shops today are no more what they were before. Le Meridien has definitely helped this fast evolving culture to modernise with constant innovations and latest offering. What we do today is never repeated. We are always on a look out for new inventions and that's the prime reason, that has attracted more customers to land at our exclusive coffee shop.
H
ow important is this segment in revenue generation?
changing this culture where we see how these coffee shops are opened in almost every corner of Delhi and how each one of them is always crowded. Today, hotels around the country have embraced ‘coffee’ as a beverage that is internationally famed and popular. It’s something you can’t do without. As before we didn’t wake up without a cup of tea, now the world doesn’t wake up without a cup of coffee.
So to embrace the international culture and yet retain Indian-ness is very important. Most of the hotels, do serve coffee but the difference is we embrace a brand of coffee and we have the seasonal coffees. For us, coffee is not just a ‘cappuccino’, we have different recipes, and we go beyond the lattes. Every three months we have a different recipe, which make our guests hooked on to us.
I wouldn’t say coffee is a major revenue generator. Of course tea and coffee has never been a major revenue generator for hotels but if you look at Baristas and Café Coffee Days, of course, they are generating good revenue from coffee. Coffee shops give a character to the hotel, it’s a service that our guests will come and enjoy. Today, practically, hoteliers cannot imagine their hotels without a coffee shop, it’s as important as any amenity of the hotel. HS as told to ANUPRIYA BISHNOI
September 2014 • HOTELSCAPES 51
GM SPEAK
What it takes to run a hotel property in the NCR region In our issues, we are constantly discussing the evolving role of a Hotel Manager, who with the changing market and guest trends has always progressed. This issue, HotelScapes gets in conversation with Rajeev Khanna, General Manager, Vivanta By Taj, Surajkund, who tells about the advantages and disadvantages of running a property in NCR along with his role. Also he talks about the expected challenges that may befall hospitality sector in the coming years.
Q &A Rajeev Khanna
General manager, Vivanta by Taj, Surajkund
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H
ow has the role of GM evolved over the years?
In today ’s promising, and a highly competitive hospitality landscape, there is a significant paradigm shift in the role of a hotel General Manager. Owing to the dynamic environment it’s a role of a general manager that requires balancing the constantly evolving customer, employees expectations, investor, owner, and developer’s needs along with the operator’s requirements to prevail in the competitive environment,. This requires being constantly ahead of times in our offerings for customers, and their changing needs by being aware of changing and future trends. There is a renewed focus on guest experiences. With immense competition, a sluggish world economy there is pressure on increasing the revenue per available room and thus a GMs role has also become that of a business manager. The guests, with their ever changing expectations, because of they being more aware now, are also harder to please. With disposable incomes going up substantially of Indian guests there is an ever growing need for different experiences while staying at hotels or even when dining out at hotels. The new age guests want more and this need is also encouraging hotels to look for unique offerings by way of experiences, edge of the plate dining, and fun offerings for resorts.
With the advent of social media and internet, the entire approach to reach out to customers has seen a huge shift and one has to constantly look at innovative means to reach out in order to catch their eye. There is now a need for the GM to be directly connected through all these channels with its guests, and the market at large. The employees today also have greater expectations of growth and thus there is a greater focus on making them ready for the next role, lest one loses them to competition.
W
hat’s your routine like?
Well the typical day begins with the round of the hotel, meeting staff and guests at breakfast followed by a review of the previous days performance, and the happenings of the day. A review on the plan for the day based on guests arriving, events at the hotel and a follow up on other operations issues. Depending on the schedule for monthly reviews, different areas do get reviewed like guest satisfaction index, food safety, MIS, revenue and sales meeting, meeting on expenses etc. Evening are generally again spent on the floor meeting staff and guests.
W
hat are the challenges that one face in managing a hotel property in NCR?
NCR ha s b e come more a nd more
There is a renewed focus on guest experiences. With immense competition, a sluggish world economy there is pressure on increasing the revenue per available room and thus a GMs role has also become that of a business manager.
52 HOTELSCAPES • September 2014
”
GM SPEAK
WE HAVE AN EFFECTIVE ONLINE MARKETING STRATEGY TO PROMOTE THE PROPERTY, DRIVE TRAFFIC TO OUR WEBSITE AND GENERATE GUEST BOOKINGS. AN APPROPRIATE HOTEL MARKETING STRATEGY IS ABOUT MAKING SURE YOUR GUESTS CAN FIND YOU – EASY AND FAST WHILE BOOKING ONLINE. competitive and my comments would more or less be the same as that to the first question, to a large extent.
D
o you see any advantage as well?
The changing market and guest trends have always made us change over a period of time in our business, or any other business, and that is a huge advantage. The competition and the changing customer needs prompt us to constantly change, innovate. The other advantage of being in the NCR is for the brand by way of an increased reach to customers. Located just a few minutes’ drive from the bustling commercial and residential addresses of South Delhi on one side and the corporate hub on the other Vivanta by Taj, Surajkund provides an option to guests wanting a quicker getaway, or an urban retreat.
H
ow are you promoting your property?
Conventional marketing methods of outdoor advertising, print media and public relations are a must to increase brand recall, however there is more “on-the-go” audience that needs to be catered largely. In present scenario, it is imperative to have a professional, easy to use hotel website. We have an effective online marketing strategy to promote the property, drive traffic to our website and generate guest bookings. An appropriate hotel marketing strategy is about making sure your guests can find you – easy and fast while booking online. We utilize multiple techniques from keyword analysis, website optimization, inbound link strategies and content creation strategies. With most traffic driving towards social media platforms like Facebook and Twitter, our presence there helps to boost online visibility and ensure word of mouth. Another useful tool is email marketing to target existing customers. In addition to this it is also important that the guests experiencing the hotel become the
goodwill ambassadors and, this is done largely at site by ensuring guests have memorable experiences and enjoy the unique offerings which differentiate the brand.
C
an you elaborate on the evolution of the hospitality sector in NCR?
Hospitality setting in the National Capital Region (NCR) of Delhi has seen incredible growth in the last few years. From a totally scarce market a few years ago, the city as well as areas around now has surplus supply of hotels. Delhi/NCR is developing rapidly with the sub markets of Delhi, Gurgaon and Noida. Hotels like Vivanta by Taj, Surajkund have become a large hub of corporate and MICE travel, and a successful weekend getaway. Today more organizations have started using the hotels in NCR leaving the traditional ones in Central Delhi, keeping in mind the relaxed environment, value for money, traffic and close proximity to the airport along with the capacity offered by them. Vivanta by Taj, Surajkund has just the right mix of all with its calm surroundings to cater the guests’. The market continues to become more segmented and this makes it more important than ever to ensure that we are correctly positioning our brand for long-term success. For us our focus is very much on the upper upscale segment with a speciality in corporate, MICE and social events.
regarded “Incredible India” campaign, we have come a long way but, to compete on the global marketplace, a lot needs to be done to harness India’s tourism potential. There is a change in the Visa policy to some extent which will indeed be useful but the taxation makes our offerings more expensive for the foreign traveller. With rooms being added every day to the market and not enough demand, this will remain a big challenge over the next couple of years. There are signs of recovery of some economies but the demand will have to grow higher than the supply in order to sustain businesses.
W
hat will make guests want to stay at your hotel?
As Delhi started expanding to the suburbs, NCR emerged as the hub for all new business activities. Vivanta by Taj, Surajkund located just a few minutes’ drive from the bustling commercial and residential addresses of South Delhi on one side and the corporate hub on the other with its close proximity to South and Central Delhi has emerged as a potential leader. We have a number of repeat guests who stay with us from South Delhi and nearby areas on regular basis apart from corporate and social visits. Viva nta by Taj – Su rajku nd , NCR overlooks the imposing entry gate of the famed Surajkund Lake Complex. The restaurants, the lounge bar, and the sprawling Jiva Grande Spa which spans 18500 sq ft along with yoga room and large infinity pool make us a perfect getaway. Exploring outdoor activities from rappelling to archery or getting on hands with pottery or even cycling in the Surajkund neighborhood, a combination of activities, and experiences for everyone in the family, we are a capital of rejuvenation.
W
W
Amid observations of growth and seemingly endless potential, there are certain challenges that have to be addressed by hospitality industry. One such example is increasing energy costs. Energy costs, with other costs escalating, the issue of price rise, bringing in more tourists and business travellers will remain the need of the hour. Additionally, even though India’s highly-
It is essential to understand that people are the most important element of a hospitality business. It is getting difficult to get quality resource and hence a need to train and make the manpower more capable is a constant endeavour. Quality manpower is a must. We are also thriving to manage costs effectively without compromising on guest experiences. HS
hat are the challenges that you see in the coming years that hospitality sector may face?
hat are the challenges that you are facing on every day basis? How are you overcoming them?
as told to ANUPRIYA BISHNOI
September 2014 • HOTELSCAPES 53
CUISINE Acquiring good quality raw material is a pre-requisite for a hotel to ensure quality food for its patrons. With more awareness about healthy food, hotels are pulling all stops, from going local to organic, to keep up with the standard expected by their clientele. We understand, from the insiders, what goes in ensuring the highest quality of raw materials for the hotels and the challenges in getting it right every single time.
Raw materials – whats cooking inside the kitchen Sourcing raw materials
Sourcing raw materials is perhaps the most crucial aspect of kitchen management and rightly so, because it eventually decides the quality of the food offered by the hotel. To ensure fresh food, more and more hotels are now opting to rely on local producers for their needs. “Our focus is on procuring the best quality produce for every dish that is prepared. The emphasis is, also, on procuring fresh ingredients that are locally produced. The Procurement t e a m c a r r ie s o u t a t e nde r process in consultation with the Executive Chef, F&B Manager and General Manager to ensure that the best vendor is chosen. At the Hyderabad Marriot t Hotel & Convention Centre and Cour tyard by Marriott Hyderabad, we get 80% of our produce from our local vendors,” says Jomy Abraham, Director Food & Beverage at the Hyderabad Marriott Hotel & Convention C e nt r e a nd C o u r t ya r d by Marriott, Hyderabad. This is a growing trend which allows hotels to procure fresh and fast. Jomy concurs to the idea, He says, “This ensures that we get the freshest ingredients that are abundantly available and we also use a lot of seasonal fruits and vegetables in our dishes. At the
Marriott we strictly adhere to the food quality standards right from the stage of receiving the produce to ensure that we serve our guests with a refreshing d in ing e x p er ience.” W h i le, Executive Chef Amit Pathania, Alila Diwa Goa too delves on the similar lines. He says, “Alila Diwa Goa like other Alila properties aims to source all its materials locally and therefore, most of our fresh produce is from Goa. We source dry products like salt and
chili powder that are not from Goa from other regions of the country.” The hotel has gone a step further and associated, itself, with the farmer’s organisation in Goa, in order to procure agricultural produce. They also contact the farmers well in advance when in need of materials in bulk. H o w e v e r, c e r t a i n f o o d items are not available locally, for instance marine products. Hotels, in such cases, opt for the nearest city located on the coast.
“Sea food is generally sourced out from the closest port city like Vishakhapatnam, Mumbai or Chennai (depending upon the availability). Local fishes are also bought to add variety. Milk based products are fresh from the local dairies which have food certifications. There are a few groceries, cheese and meats which are not available within the country are sourced from international market through local suppliers like the Norwegian
Jomy Abraham
Amit Pathania
Gaurav Chakraborty
Our focus is on procuring the best quality produce for every dish that is prepared, emphasizing on procuring fresh.
Alila Diwa Goa like other Alila properties aims to source all raw materials locally and therefore, most of our fresh produce is from Goa.
Sea food is generally sourced out from the closest port city like Vishakhapatnam, Mumbai. While, milk based products are fresh from the local dairies.
Director F&B Hyderabad Marriott Hotel & Convention Centre and Courtyard by Marriott, Hyderabad
54 HOTELSCAPES • September 2014
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Executive Chef Alila Diwa Goa
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Executive Chef – Novotel Hyderabad Airport
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CUISINE Girish Kumar, Executive Chef – Courtyard by Marriott Pune Chakan too has the same notion. He tells us, “We don’t deal with any certified vendor who deals with organic foods as of now. However, organic food is definitely getting popular and the demand is increasing in restaurants.’’
A major change in the food needs of the patrons in the hotels is the demand for organic food. Abraham agrees and says, “The trend of organic food and the awareness about it is slowly catching up in the city. Most of our guests prefer
a meal that is healthy and that the ingredients used in the dish are fresh and natural. Our chefs are constantly interacting with our guests to understand their preferences. But the demand for organic food is still in its nascent stage. In our effort to offer healthy and natural food to our guests, our chefs have taken a keen interest in growing some micro greens, sprouts and vegetables in house which are then used for salads and other preparations.” However Dharmen Makawana, Executive Chef, The Leela Palace Chennai says that the demand for organic food is limited. “About 5 per cent of our raw material is organic. With the launch of our spa, the internationally renowned ESPA, for our spa cuisine we will have influx of organic materials. H owe ve r, t h e d e m a n d fo r organic food is not much at this point. Almost 80 per cent of our vegetables come from the local market and the remainder from overseas as it is not available here such as certain types of lettuce, vegetables and fruits,” he says.
Dharmen Makawana
salmon, Australian lamb rack and parmesan cheese,” says Gaurav Chakraborty, Executive Chef – Novotel Hyderabad Airport.
Organic Food and its demand
Challenges in procuring fresh, every time!
Despite the best efforts of the hotel administration to ensure best quality supplies, external factors do have a major role to play. Many a times, supplies are hampered by inclement weather, be it excessive rains or heat, or delays in case of procuring from a distant place. These can affect the quality of the produce and is a major concern for the hotel management. Pat ha n ia concu r s to t he argument saying that, “Yes, we do face challenges in sourcing raw materials and this is primarily due to the availability of the products. Hotels require huge quantities and varieties of raw materials.
Executive Chef The Leela Palace Chennai
Girish Kumar
Executive Chef Courtyard by Marriott Pune Chakan
Raheel Ahmad
About 5 per cent of our raw material is organic. Almost 80 per cent of our vegetables come from the local market and the remainder from overseas.
We don’t deal with any certified vendor who deals with organic foods as of now. However, organic food is definitely getting popular and the demand is increasing.
We have local market survey in place on weekly basis, menu planned based, on seasonality of produce and offered to the guests.
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Executive Chef Bengaluru Marriott Whitefield
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One time procurement is not an issue but when it comes to consistent delivery, it definitely becomes a challenge. Another issue that we face is the quality of the products that need to comply with Alila Diwa Goa’s standards and specifications. We do not accept any material which is below our standards of quality.” While, procuring off-seasonal products are another challenge that the hotels confront on, almost, a daily basis. Chakraborty, too, shares the issues that he faces in his operations. He says, “Challenges depend on what is getting sourced and at what time. Many a times few things are out of season and if the guest demands for it then it becomes challenging.” Some hotels have developed their own internal mechanisms to ensure quality management. Executive Chef Raheel Ahmad, Bengaluru Marriott Whitefield tells us how they tackle the issue. He says, “We have local market survey in place on weekly basis, menu planned based, on seasonality of produce and offered to the guests.” While on the issue of procuring fresh, he informs us, “Bangalore has not too much of difficulties in finding good produce. Some time we do face difficulties to procure fresh seafood, as this has to be really fresh in order to maintain the best quality.’’ No doubt, hotels are putting in best efforts to maintain a high standard in procurement, however, being dependent on so many external factors and third party dependency- it will continue to be a matter of utmost importance and concern for the hotel management. Moreover, as people become more health conscious and opt for more organic food, it is expected to become a long lasting trend in the days to come. HS by SHASHANK SHEKHAR
September 2014 • HOTELSCAPES 55
BUSINESS TRAVEL
Hotels bid on comfort and innovation to tap burgeoning business segment travellers Business travel in India is growing, albeit, at a slow pace of 2.1 percent in 2014 and is pegged to reach a total of $24.9 billion USD, but will recover to reach 7.6 Percent in 2015, forecasts GBTA. This figure will only head north as the economy improves, while, hospitality sector is also evolving with the changing face of business travel. With a majority of hotels catering to a large number of business travellers, who seek nothing but the best, innovation and anticipation will hold the key to their future success.
I
ndian business travel scene has seen a transformation and a steady growth in the past decade and a half. India, which, ranked 24th, in the year 2000, in rank in the major global business travel markets, has now reached a commendable 10th spot in 2014, and is expected to surpass Italy to become the 9th largest market in the next five years. In the past decade, India rode high on the tremendous growth of the middle class and size and multitude of business centers throughout India--with the domestic travel dominating the entire spending with 90% of the total spending. It is also expected that an improved outlook for the Indian economy should bring business travel spend back on track in 2015, as GBTA (global business travel association) expects 7.6 percent growth to $28.8 billion USD. While, statistically speaking, India spend around 8 billion dollars in the year 2000 has, now, reached a figure of 24 billion dollars. That is a respectably substantial growth, however, a lot remains desired. The growth, however, brought with itself more business and consequently more business travel. Which, has a direct bearing on the hospitality industry. Thus, hospitality industry, too, has seen a massive change in the gamut of service that they offer, to keep up with the needs of the business traveller. With, a majority of hotels hosting a large number of business travellers, which often is as high as 70-80% of total occupancy-hotels too, have embarked upon improving their facilities and going the ‘extra-mile’.
Hotels aligning to the changing needs
Hotels, in a bid to maintain its competitive 56 HOTELSCAPES • September 2014
edge, are altering their product to best suit the needs of a business traveller. Essentially, focussing on seamless delivery of service, the hotels have tried to lessen the response time, focussing on ensuring comfort and quick service. Hemant Tenneti, General Manager – Courtyard by Marriott Pune Chakan, further elaborates on the needs of a business traveller. He says, “the top most essentials to ensure a business travel friendly hotel needs hassle free and a very quick check-in since the person has already spent a few hours travelling and flying, very good quality bed and a spotless room, excellent internet connectivity throughout the Hotel with networking zones throughout the hotel and a very good breakfast buffet with fast efficient service.” While, underscoring the importance of quality lounges, he said, “A very good quality lounge bar and an excellent Fitness facility are equally important. The need for better internet and network connectivity have made hotels upgrade their technology.” In order to save time, hotels have, now, introduced easy check-in and check-outs, which essentially saves a lot of time in filling out unnecessary details. They have also designed special all-inclusive packages that, offer discount on services like food and beverages and spa, are attractive for the corporate style of travel. Vishal Singh, General Manager Hyatt Pune, lists the services that have been tailor-made to suite the business traveller. He says, “Hyatt Pune is a Business hotel catering to business travellers. 65 to 70 percent of our guests travel for business. The hotel internet facility has been upgraded and we offer 20 mbps lines to our guests. We also provide quick turnaround for pressing, dry
cleaning, shoe shine service to our guests.” While talking on helping their patrons maintain a healthy lifestyle in a hectic life, He says, “we provide de- stress massage at our spa for our business travellers who want to relax in between their fast paced & hectic schedules. While, healthy meal and comfort food options are also focused towards the business travellers.”
Need for greater flexibility in service and products
As the markets grow and businesses expand, the hospitality sector will continue to evolve. The hotels will have to focus on being flexible in their products and service delivery, while also being able to pre-empt situations to find solutions, feels Maverik Mukerji, General Manager – Novotel, Hyderabad Airport. He believes that, “today’s business traveller requires immense flexibility with pricing as well as cancellation conditions as the lead up time to planned travel gets shorter. Also in huge demand is mobile booking solutions that are fast and reliable. Today’s traveller also requires seamless internet connectivity with most travellers carrying two to three personal Wi Fi devices. What this requires is a high level of intuitive perception and hotel’s to have the ability to react faster to develop and mobilize not just its own internal resources but also work with third party stakeholders and solution providers.” Other industry insiders too echo similar sentiments. “The business traveller is increasingly becoming aware of the different segmentation of the hotels like budget, mid-market, luxury etc. and they are equally aware of the product-value paradigm they offer. Hotels, therefore, need to sharpen
BUSINESS TRAVEL
Vishal Singh, General Manager Hyatt, Pune
Business travel is expected to be buoyant with the stable government coming in. As a matter of fact, Pune is becoming the new base for Global Banks. The future trend will include more usage of Technology and Hotel companies will need to adapt quickly by introducing Mobile Apps for faster communications.
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Hemant Tenneti
General Manager Courtyard by Marriott Pune Chakan
The future will see a lot of manufacturing giants of the world move their business to India, and increasing their business travel. Hotels will have to adapt themselves to the highly efficient and defect free processes that these travellers are used to in their industries.
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Saurabh Bharara
General Manager Novotel Hyderabad Airport
The business traveller is increasingly becoming aware of the different segmentation of the hotels like Budget, Mid-market, Luxury etc. and they are equally aware of the product-value paradigm they offer. Hotels therefore need to sharpen their focus and offer services in line with the expectation of the clientele.
All trends indicate that today’s business traveller requires immense flexibility with pricing as well as cancellation conditions as the lead up time to planned travel gets shorter. Also in huge demand is mobile booking solutions that are fast and reliable. Hotels must also be able work with third party stakeholders and solution providers.
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their focus and offer services in line with the expectation of the specific customer profile they want to attract,” says Saurabh BhararaDirector of Sales & Marketing, Pullman Gurgaon Central Park. He goes on to say that globalisation has had a profound impact on the consumer behaviour as, “Owing to increasing global exposure, quality expectations are also increasing across segments- for example a business traveller at a budget hotel too can be quite choosy. Security too is becoming a key concern and the hospitality sector is seeing a lot of initiatives from key players to meet this demand.”
rooms is relatively large, there is a shortage of quality options, which are by and large expected by business travelers. However, that has begun to change, with the launch of brands like ‘Vivanta’ by Taj, which cater, precisely, to the ‘in-between’.” Therefore, the need remains that more hotels, capable of hosting business travellers must come up in tier-2 and tier-3 cities. With more such developments taking place across a number of global chains that cater to business travellers, it can be hoped that this will change in the near future providing more options for the business travellers.
Need for greater and more diversified hotel products
Improving Infrastructure and convention capacity
India has no dearth of luxury hotels. “There are palaces and havelis, which are apt for senior level corporate travel and then there are local unbranded hotels and very little in-between” feels Welf Ebeling, head of the Asia-Pacific of the GBTA. He argues that, “one particular challenge for business travel in India is that while the supply of hotel
Maverik Mukerji
Director of Sales & Marketing Pullman Gurgaon Central Park
Much has been written and talked about infrastructure and its importance in shoring up business opportunities. But, it remains a hard fact that India’s infrastructure remains lagging behind woefully. This includes along with physical infrastructure such as ports of entry and modes of transportation, but also urban infrastructure such as
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access roads, electricity, water supply and telecommunications. Bolstering our convention capacity remains a daunting challenge. It was most evident when the new government’s oath-taking ceremony was conducted in the fore-court of the Rastrapati Bhawan, exposing the lack of an international standard convention centre in the country. Let us hope that with the new government firmly on the saddle and seeking to expand infrastructure, such short-falls can be plugged to ensure facilitating a more conducive atmosphere for business. The fact remains that the business traveller is a dynamic entity, always vying on getting the best deal for himself in the most time-efficient manner. With improvement, innovation and partnership with various service providers, coupled with a steady dose of economic revival, the hospitality industry is set to continue to evolve in terms of service delivery and products. What, interestingly, remains to be seen is the pace and the direction of the development and how it affects us as business travellers. HS by SHASHANK SHEKHAR
September 2014 • HOTELSCAPES 57
PRODUCTS Etre Luxe brings new luxury collection for your indoor spaces
Vu Televisions launches Quad-Core 50” and 55” 4K Ultra HD TVsT
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recious Stones collection, from Graniti Fiandre by Etre Luxe from the house of Gotu’s India brings its new collection that has been created based on the marble quarrying tradition, the history of stone quarries, the influences of mythology and the history of the origins of stones such as amethyst, the sacred attributes of carnelian, the preciousness of malachite and the ancient origins of amber. Just as a goldsmith interprets precious stones with skill and creativity, making elegant jewellery, Fiandre has succeeded through this collection in recreating the force and wonder of nature, maintaining the beauty and rarity of natural precious stones. Made by hand with the aid of the most advanced technology applied to ceramics, the Precious Stones collection skilfully enhances modern architecture. Intended for adding value to very appealing coatings, thanks to the large 300 x 150 and 150 x 75 cm format, it allows interior designs with an extraordinary impact to be created. For more information visit: www.etreluxeindia.com
Gaia launches Sport Trail Mix: An energy packed snack
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aia has launched Sport Trail Mix that’s for an instant energy boost that lasts. It is important to eat a healthy snack containing a balanced combination of carbs, protein and healthy fats, which will keep you feeling full and give you sustained energy throughout the day. Gaia Sport Trail mix is a healthy blend of nuts, dry fruits and seeds. High on proteins, dietary fibre and good fats with no added sugar, it stands as an extremely nutritious satisfying mix. Perfect for hiking or just snacking, this healthy treat is lightweight. It is priced at `145. For more information visit: www.gaiagoodhealth.com
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u Televisions, the California-based luxury television company, has introduced their 50” and 55” 4K Ultra HD TVs exclusively on www.snapdeal.com, With the motto of “luxury in technology”, Vu 4K Ultra HD TVs are nearly half the price of similar products from the competition – `89,900 for the 50” versus Samsung’s 48” 4K TV at `1,59,556, and `1,19,000 for the 55” versus Sony’s equivalent model at a market price of ` 2,18,000m according to a press release from the company. In fact, Vu delivers more value to customers with the world’s first Quad-Core graphics engine giving an accelerated Ultra HD experience that can upscale basic set-top box content to more detailed and sharper images. The price is `89,900 for the 50” and `1,19,000 for the 55”. For more information visit: www.vutvs.com
A compact and true All-in-One POS solution to delight the customers
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ssae has launched all-in-one POS solution to delight your customers and boost revenue. This solution has integrated high speed thermal printer with auto-cutter. It has a compact design that saves precious counter space. It f u r t her has a bright, rear side LCM Customer display for keeping your customers informed of progress of the transaction and it accommodates any layout of retail counter. The price is on request. For more information visit: www.essae.com
PRODUCTS Netgear launches new AC dual band gigabit Wi-Fi range extender
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etgear launches AC750 WiFi Range Extender (EX6100) which supports older a/b/g/n Wi-Fi devices while providing additional performance to the latest 802.11ac Wi-Fi devices. The ex tender is e nt i t l e d fo r d e l ive r i n g n e x tgeneration Wi-Fi performance for the new mobile devices demanding high Wi-Fi throughout. NETGEAR AC750 Wi - Fi R a nge E x te nde r (EX610 0) boosts your existing network range and speed, delivering AC dual band Wi-Fi up to 750 Mbps. It works with any standard Wi-Fi router and is ideal for HD video streaming and gaming. It also gets connected with iPads, smartphones, laptops and more. It is priced at `6,999 For more information visit: www.NETGEAR.com
Electrolux launches brio gas hob
Green Building facades and Railings from Ozone
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lass plays a critical role in creating such structures and acts as a catalyst in enhancing the building design, aesthetics and creates the wow factor yet making it a Green building. The charm of such world-class structure is lost in case of slightest negligence while selecting the hardware fittings used to construct it. Spider fittings and accessories are the hardware used to create Glass Facades and canopies to achieve the desired building design. Using spider fittings, a transparent façade can be created that allows seeing the interior ambience of the building as a result creating a curiosity among passerby and becomes the landmark in itself. Also, Ozone introduced a new range of designer Sheet Metal Spider Fittings for new age building facades. The price is on request. For more information visit: www.ozone-india.com
Grohe launches its new collection- ‘The Authentic Range’
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rohe introduces ‘The Authentic Range’ to help you build a royal oasis of relaxation and rejuvenation. The range comprising the Grohe Kensington, Bridgeford, Somerset and Grandera collections epitomises elegance. Each of the faucets, levers, mixers and fittings from this range welcomes you to a bathroom that spells grace and refinement. Every precision-made element of your bathroom will harmonize beautifully with brand’s timeless designs and modern technology. The price is on request. For more information visit: www.grohe.com/in/
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he Brio gas hob by Electrolux makes cooking easier and food tastier. When it comes to cooking, having a reliable cooktop is a must for all the kitchens. The hob comes with three burners that ensure effortless cleaning while maintaining a consistent high performance. In addition, the hobs also incorporate several professional-style features .The result is a highly customisable gas hob with a solid build quality that makes cooking easier and more enjoyable. It’s priced at `36,900. For more information visit: www.electrolux.in/builtin
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NEWS SNIPPETS: DOMESTIC
New collaboration – InterContinental Hotels and Resorts Partners with Penfolds
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nterContinental Hotels Group has announced a new partnership with global wine company, Treasury Wine Estates, to offer a premium selection of wine from award-winning Australian marque Penfolds at more than 65 InterContinental hotels and resorts across Asia, Middle East and Africa. The collaboration will bring a great new selection of fine wines to hotel dinner tables and bars, enhancing dining experiences across the region. InterContinental guests also can expect exciting new programmes and events specially tailored for the wine connoisseur in them, including exclusive wine flights, access to rare and limited wines and a bespoke wine list to match every dining occasion in each hotel. Hotel teams at InterContinental hotels and resorts across the region will undergo training
by Treasury Wine Estates to provide curated wine lists specifically tailored for each restaurant, bar and lounge in the property. InterContinental Hotels & Resorts will also have access to the entire portfolio of Penfolds wines including exclusive selections available in limited quantity.
Holiday Inn opens in Jaipur
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HG (InterContinental Hotels Group) has announced the opening of Holiday Inn Jaipur City Centre. The hotel, which is the ninth Holiday Inn hotel in India, is located right in the centre of the city and close to popular tourist and business destinations. The 172-room Holiday Inn Jaipur City Centre is located close to key areas of Jaipur - including the main shopping centre, railway station, government houses, multinational companies and cultural venues. For guests travelling for leisure and sight-seeing, the hotel has convenient access to historical monuments and tourist attractions such as Amber Fort, Hawa Mahal, Jantar Mantar, City Palace and Birla Temple. The central location, coupled with the fresh and comfortable guest rooms and facilities, make it an ideal option for business, leisure and transit travellers to the city. Guests have a choice of three different restaurants and a cocktail lounge. Monarch, the hotel’s all day dining serves Indian Rajasthani and international dishes in a stylish setting. Alternatively, guests can get a flavour of authentic Chinese food at Chao Chinese Bistro restaurant, enjoy American style food and drinks at Road House Bar & Grill or enjoy a warm and cosy atmosphere at Ten Kings Bar while sampling a variety of cocktails.
Embassy Group gears up for hospitality, launches its first hotel – Hilton
Bangalore Embassy GolfLinks
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ilton Bangalore Embassy GolfLinks, developed by Kelachandra and Embassy Group has launched its full-service hotel in strategically located Embassy GolfLinks Business Park, the hub of several Fortune 500 companies. The hotel features 247 studios and suites that are among the largest in the city. Each guestroom is purposebuilt to meet every guest’s needs, from transient business travellers to long-stay guests, offering dedicated living, dining and work areas and a fully-equipped kitchenette. The hotel is minutes away from Bangalore’s central business district and the city-centre, offering easy access to a variety of shopping and dining destinations.
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NEWS SNIPPETS: DOMESTIC
ibis Delhi opens in the hub of Aerocity
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ccor has made its opening at Aerocity, the 43-acre hospitality and commercial precinct near Delhi International Airport. This is the ninth ibis hotel in India with the largest inventory of 316 rooms. With easy access to National Highway 8 to Jaipur, the hotel is conveniently connected to the corporate satellite city Gurgaon. The hotel is also easily accessible from the Metro station situated within a distance of 200 meters. ibis Delhi Airport is Accor’s first hotel in Delhi. It offers 316 comfortable, well-designed, fully equipped guest rooms with modular bathrooms, in a contemporary fit-out including flat screen TV, free Wi-Fi and broadband internet access to suit the needs of business and leisure travellers. ‘Spice It’ presents a spirited and casual dining space with the best of world cuisine, offering a choice of buffet or a la carte. With the ‘You Create, We Cook’ concept, guests can explore their culinary skills whilst dining in an interactive kitchen environment. The restaurant also offers guests a pleasant al-fresco dining experience in a comfortable and lively environment. The Hub, with its energetic ambience, wide selection of refreshing beverages and free Wi-Fi, serves as a gathering place throughout the day. The hotel has three meeting rooms at the lobby level, which combine to a total capacity of 3068 sq. feet and accommodate up to 150 guests. All meeting rooms have a contemporary ambience with the latest audiovisual capabilities and themed set-up available on demand. The ibis Delhi Airport, like all ibis hotels in India, will provide guests the reassurance of quality from one of the world’s largest and most respected economy hotel brands. The brand’s consistency on ‘well-being at the best price’ and its ‘15-minute satisfaction contract’ set ibis apart in the Indian economy hotel environment. The other key features of the hotel include a gym and a free shuttle service to and from the international airport.
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NEWS SNIPPETS: INTERNATIONAL
Six Senses Zighy Bay plunges into culinary innovations
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i x S ense s Z ighy Bay ha s taken a socially responsible approach to culinary innovations that feature on new menus being introduced at the resort’s restaurants’ Summer House and Spice Market. Embracing the farm to table approach, the culinary team has crafted a menu incorporating organic, seasonal ingredients and seafood sourced from local farmers and fishermen. This ensures the integrity of the produce and supports the local community while at the same time, it reduces the resor t ’s carbon footprint by minimizing food miles.
Summer House introduces a bistro style menu, including a new grill section featuring Omani lobster tail, grilled king prawns and Sous Chef Mohan's special of the day, which will focus on combining local seafood and produce for a flavour some epicurean experience. Middle Eastern themed Spice Market has taken inspiration from homegrown specialities to offer more varieties to the menu. Arabic Chef Mohammad Abukhadra takes guests on a gourmet journey through the region, with dishes such as varieties of hot and cold mezze, lentil tajine and cumin and coriander coated duck breast
including a special dessert of Zighy date crème brûlée. Dishes are prepared in the traditional
mud kitchen for guests to enjoy in the relaxed ambience of the authentically accented interiors.
Accor’s Global luxury and upscale marketing team moves from Paris to Singapore Westin Turtle Bay Resort & Spa debuts in Mauritius
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tarwood Hotels & Resor ts Worldwide and Blue Ocean Park Ltd. have announced the debut of the Westin brand in Mauritius with the opening of The Westin Turtle Bay Resort & Spa, Mauritius. Nestled in lush tropical gardens, the resort enjoys a pristine beachfront location in the historic Turtle Bay of Balaclava on the North West coast of the island. The Westin Turtle Bay Resort & Spa, Mauritius offers a variety of food and beverage outlets including the allday dining restaurant Seasonal Tastes and the beach club Mystique, both of which feature the Westin brand’s
signature SuperfoodsRx menu items with exceptional food combinations rich in nutrients and flavour. The hotel also boasts three a-la-carte restaurants: Kangan, serving cuisine with an exciting and authentic Indian flare; Fusion, an ‘east meets west’ style restaurant with strong local culinary influences and the relaxed and fun Beach Grill, positioned right on the ocean’s edge serving a variety of fresh seafood and succulent meats cooked on open BBQ’s. In addition, the hotel produces local honey from its own beehives and sources fresh herbs from its garden helping infuse healthy meals to the guest experience.
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s Accor celebrates the successful launch of several high-end hotels across Asia Pacific including Sofitel So Singapore, Pullman Shanghai South, and the signing of the highly coveted Sofitel Sydney Darling Harbour at the Sydney International Convention Centre, the group has moved its Global Luxury and Upscale marketing operations from Paris to Singapore, in a move that signals the growing importance of Asia Pacific in these segments. With Asian consumers now accounting for almost half of global luxury sales, Accor decided that a move to Singapore would bring new insights into luxury and upscale hotels and place the nerve centre of its marketing operations closer to where its customer base is growing fastest. The move of the Luxury and Upscale Global Marketing team to Asia follows a restructuring of Accor’s business model around geographical lines, with all its brands now divided into three segments: Luxury and Upscale; Midscale; and Economy/Budget. The Luxury and Upscale segments, now emanating from Singapore, include Accor’s Sofitel, Pullman, MGallery, Grand Mercure and The Sebel brands. China alone already has 19 Sofitel and 15 Pullman hotels, making it the number one market for these brands outside of Europe.
NEWS SNIPPETS: INTERNATIONAL
The Luxury Collection Hotels & Resorts expands its footprints in China
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he Luxury Collection Hotels & Resorts opens The Azure Qiantang, in the capital of China’s Z hejia ng prov ince. With the openings of The Azure Qiantang and very recently The Castle Hotel in Dalian, The Luxury Collection brand includes six hotels as part of its distinguished portfolio in China, including the legendary Astor Hotel in Tianjin, Twelve at Hengshan and The Hongta Hotel in Shanghai, and The Royal Begonia in Sanya. Situated along the Qiantang River, The Azure Qiantang is a blend between Hangzhou’s traditional foundations with contemporary design elements. Designed Pierre-
Yves Rochon, the hotel uses a blue glass coloured structure which showcases design elements that reference the surging waves of the Qiantang River, merged harmoniously with the colours of the sky. The hotel boasts 205 elegant guest rooms and suites, all with views of the Qiantang River. The hotel is equipped with a swimming pool, spa and a 24-hour fitness ce nt r e for g ue s t s to p u r s ue moments of deep relaxation or invigorating workouts. The hotel spa will feature seven treatment rooms and three massage rooms, offering moments to replenish the
mind and body inspired by five of Hangzhou’s surrounding water elements, including the river, canal, stream, lake, and sea. At Panorama Restaura nt & Ba r diners ca n savour a range of favourite local
snacks in addition to international buffets. The Lobby Bar with its beautiful garden views is another ideal location for spending time while indulging in a lavish local afternoon tea.
Legacy of Starwood continues with the launch of The St. Regis Chengdu
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Renaissance Beijing Wangfujing comes to the Chinese Capital City
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enaissance Hotels debuts its second hotel in Beijing with the introduction of the 329 -room Renaissance Beijing Wangfujing. The hotel overlooks the famed Forbidden City on historic Wangfujing Street. Renaissance Beijing Wangfujing joins the Renaissance Beijing Capital in the capital city and a fast-growing portfolio of 18 hotels in China including six in Shanghai and three in Tianjin, with additional
locations in Suzhou, Wuhan, Sanya, Huizhou, Guiyan, Chengdu and Hong Kong. The latest opening brings the total number Marriott International offerings to 72 hotels across six brands. The Renaissance Beijing Wangfujing Hotel features the latest innovations in design and décor, technology and culinary. The hotel’s executive lounge offers sweeping panoramic views of the Forbidden City.
t. Regis Hotels & Resorts has launched The St. Regis Chengdu, debuting exactly 110 years after the opening of the first St. Regis hotel in New York City in 1904. With this opening, St. Regis reaches 33 hotels around the world. The St. Regis Chengdu, ideally located at the intersection of Chengdu’s business and luxury retail districts, and steps away from Tianfu Square and Chun Xi Road, creates a home for today’s entrepreneurial traveller with 279 luxuriously appointed guestrooms and suites artfully designed to blend the residential Art Deco style of the 1920s with traditional elements of Sichuan culture and discreet state-of-the-art technology. With floor-to-ceiling glass windows, The St. Regis Chengdu will also provide the perfect venue for events with over 11,840 square feet of meeting spaces. The newest Iridium Spa, exclusive to St. Regis Hotels & Resorts, offers a blissful experience including nine treatment rooms, sauna and steam rooms, and a modern fitness centre. Offering the latest in treatments, the tranquil spa offers customized indulgence that surpasses the discerning tastes of St. Regis guests. St. Regis is the only luxury hotel in Chengdu to offer both indoor and outdoor swimming pools for in-house guests and St. Regis Athletic Club members.
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PEOPLE THOMAS MANGAS Executive Vice President, Chief Financial Officer Starwood Hotels & Resorts Mangas will be a member of Starwood’s Senior Leadership Team and report to President and CEO Frits van Paasschen. Mangas most recently served as Executive Vice President and Chief Executive Officer of Armstrong Floor Products, a division of Armstrong World Industries, Inc. From 2010 to 2013, he was Senior VP and CFO of the parent company, Armstrong World Industries, Inc., where he was responsible for finance, investor relations, information technology, and global business services.
PUNEET SINGH General Manager Kempinski Ambience Hotel Delhi Puneet returns to his hometown as General Manager of Kempinski’s flagship hotel in India, following a successful two years as the General Manager of Kempinski Grand & Ixir Hotel in Bahrain. After working for more than two decades with Kempinski in eight different countries, Puneet now takes over the leadership at Kempinski Ambience Hotel. Puneet previously served as General Manager at Kempinski Hotel the Dome, Antalya, Turkey etc. He holds a Bachelor of Commerce degree and an MBA.
ANDREAS FLAIG Executive VP of Development Carlson Rezidor In his new role, Andreas will be responsible for driving the development strategies for Carlson Rezidor in Asia Pacific to further grow its hotel portfolio and enhance its presence in this region. He will oversee the regional teams based in Singapore, China, India and Indonesia securing new management contracts as well as franchise and conversion opportunities. Andreas has been in the hospitality industry for more than 20 years, of which 16 years were in Asia.
TEJUS JOSE General Manager Novotel Mumbai Juhu Beach Tejus has been associated with the Accor group in several positions for almost 9 years and his last assignment was as the General Manager of Grand Mercure Bangalore. Having embarked on his career 14 years ago, he has worked with many renowned Indian and International hotel companies before joining Accor. Tejus’ key interests and expertise lies in delivering results through empowered people and systems and processes in all aspects of the business.
RISHU ROSHAN General Manager Marasa Sarovar Premiere, Tirupati Rishu joins Sarovar with expertise in operations, food & beverage operations, personnel management and much more. He holds Master of Science in International Hotel and Tourism Management from Oxford Brookes University, UK and is also a diploma holder from Institute of Hotel Management, Bhubaneswar. Prior to joining Sarovar Hotels, Rishu was the Operations Manager at The Holiday Inn, UK. He has also worked with Heathrow Windsor Marriott International in London, Oxford Thames Four Pillars in Oxford and The Park, New Delhi.
ANISH SRIVASTAVA Operations Manager Mosaic Hotels, Noida A hospitality graduate, Anish began his career as an Assistant Manager with Ramada Hotel Manohar (Now Fortune Hotel Manohar) New Delhi in 2000 and rose to the rank of Food and Beverage Manager with Mahagun Sarovar Portico. He has worked with different establishments right from Ramada, where he offered his services as Assistant Manager- Food & Beverage, to Jaypee Group as Food & Beverage Manager and Mahagun Sarovar Portico as Food and Beverage Manager.
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PEOPLE AMIT PRAKASH Director of Sales Westin Pune Koregaon Park With his succinct objective of striving to achieve a challenging role where his knowledge and skills can be utilized to embellish the development of both the organization and himself, Amit has made an everlasting impression in the hospitality industry. Amit is known for his leadership and development skills and has also been awarded for the same by the Starwood Cares Leadership University. Prior to joining The Westin Pune Koregaon Park, Amit Prakash was ascribed as Associate Director of Sales at The Westin Hyderabad Mindspace.
ASHUTOSH RANJAN THAKUR Food & Beverage Manager Renaissance Mumbai Convention Centre Hotel & Lakeside Chalet Marriott Executive Apartments With over 11 years of experience, Ashutosh has previously worked with 5-star hotels like JW Marriott, Holiday Inn , Westin, BJN Hotels Ltd and Mirah Hospitality. Prior to joining Renaissance Mumbai Convention Centre Hotel, Ashutosh was working with Holiday Inn Mumbai International Airport as an Outlet Operations Manager for close to 3 years.
RAMASAMY NATARAJAN Shangri-la Hotel, Bengaluru Director of Sales In his new role, Ram will head the Sales Department encompassing corporate sales, MICE and travel trade business. With more than 11 years of experience in the hospitality industry, Ram possesses great leadership skills, a passion for excellence and a talent for developing high-performing teams that drive excellent measurable business results. In his last assignment, he was part of the preopening team and led the sales team at Fairmont Jaipur.
NARAYAN RAO Executive Chef Courtyard by Marriott Pune City Centre Chef Narayan brings with him over 18 years of experience in the hospitality industry, having worked with world-class resorts, commercial city hotels as well as upscale restaurants. His core expertise lies in guest relations, corporate hospitality, guest experience, customer management, hotel operations, performance management and event management.
SIDDHARTH MEHRA Hotel Manager Four Seasons Hotel Mumbai True to the culture and philosophy of Four Seasons Hotels and Resorts, Siddharth Mehra is a people focused leader. In this new role, he would be responsible to drive the operations of rooms and food and beverage division. Originally from Delhi, he is an alumnus of the Oberoi School of Hotel Management with a career span of 20 years beginning with The Oberoi Towers, Mumbai as Restaurant Manager. His travels have taken him on a Hindu trail, having recently lived in Ubud Bali and has been the GM of Amandari Resort.
HIROYUKI HASHIMOTO Japanese speciality Chef at EEST The Westin Gurgaon Prior to joining The Westin Gurgaon, New Delhi, Chef Hiroyuki Hashimoto was associated with The Leela Hotel, Gurgaon for a period of five years since 2009. He was also a part of the pre- opening team at Shangri-La Hotel, New Delhi, as Executive Japanese Chef, in 2005. It has been during his nearly decade long stint here that Chef Hashimoto has gained an extensive insight into the palette of an India connoisseur. He has also worked with numerous celebrated standalone restaurants.
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LAST PAGE
Opportunities that every hospitality industry stakeholder must know
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We reproduce here extracts from the HVS survey, indicating trends and opportunities that every shareholder in the industry may like to take note of.
n recent yea rs, we have highlighted various trends and opportunities impacting the Indian hospitality sector. These have, in the last three-to-five years, included the beginning of hotel transactions and rebranding of hotels, increased awareness in Indian hotel owners, growth in domestic travel, emergence of institutional hospitality players, growth of the previously untapped MICE segment, the creation of newer leisure markets and last, but not least, focus on environmental sustainability within hotels.
Social Media
Social media platforms such as Facebook, Twitter, LinkedIn, Instagram, Pinterest, Google+, Z om a t o, Tr ip a dv i s or, e t c . are increasingly inf luencing t he de c i s ion s t h a t t o d ay ’s consumers are inclined to take. While, benchmarking a hotel or restaurant’s popularity and success may not be entirely possible, simply by correlating it to its Trip advisor ratings just yet, one cannot deny the fact that a vast majority of guests – corporate and leisure alike – do conduct online research before making their hotel stay and/or F&B spend decisions. The ability of such platforms to assist hotel owners and operators today – if utilized correctly – is immense.
REITs
The first draft guidelines of Real Estate Investment Trusts (REITs) for India were released in 2008. After years of non-action by the state and central authorities, REITs were formally approved, and that
l The Prime Minister’s Five Ts- Tradition, Talent, To u r i s m , T r a d e a n d Technology, have a direct correlation with the future of India’s hospitality sector.
E l e c t r o n i c Tr a v e l Authorisation (ETA) will help boost commercial, leisure and MICE tourism across the country. l
MICE- opportunities in the MICE segment across various hotel positioning. With the announcement of a worldclass convention facility to be developed in Goa in the recent union budget. l
too, in this year’s budget. REITs have been on the wish- list of the Indian real estate industry for long and are expected to add vibrancy to the sector with a prospective increase in institutional investors and retail buyers. We view this as an interesting opportunity for hotel developers of today and tomorrow.
Electronic Travel Authorisation
Electronic Travel Authorisation (ETA), a facility to issue visa on arrival for tourists from 180 countries, is likely to be introduced later this year. The Union government plans to roll out ETA across nine airports: Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Kochi, Thiruvananthapuram and Goa. We believe the ETA facility will help boost commercial, leisure and MICE tourism across the country.
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MICE
With the announcement of a world-class convention facility to be developed in Goa, in the recent union budget, we believe this to be a starting point for other destinations to follow suit. India can now aspire to present itself as an interesting MICE destination to consumers from across the world. The Prime Minister’s Five Ts To build “Brand India”, the newly appointed Prime Minister laid out his Five Ts – Tradition, Ta lent, Tourism, Trade and Te c h nolo g y, h ave a d i r e c t correlation with the future of India’s hospitality sector. Tradition – As the sector grows in size and scale, staying true to our age-old tradition of “Atithi Devo Bhava” could prove to be one of the differentiators that separate the successful from the not-so- successful hotels of tomorrow. Talent – Perhaps, the single largest challenge that the Indian hospitality sector faces today is the lack of trained, experienced and motivated talent. The sector will have to take serious and immediate steps towards training, growing and retaining a talent pool if, it intends to continue delivering quality service to the guests of tomorrow. Tourism – With the new government acknowledging India’s largely untapped potential as a major tourist destination, we foresee a new ray of hope for the hospitality sector. Trade – Promoting India as an investment destination is an important part of the new
government’s agenda. Raising the FDI bar across various industries is a welcome step forward. Encouraging growth in the manufacturing sector with his recent “Make in India” slogan, can significantly contribute to the growth and success of the Hotel sector. Technology – Technology and its export will continue to play a key role in the economic future of India. From in-room iPads and docking stations to state of the art point of sale systems that allow hotel operators to track consumer likes, dislikes and spend behaviors, today’s hotels are increasingly using technology in their daily operations.
A Potential Threat
The recent talk about prohibition in Kerala or a Goa minister’s unnecessary comments about a proposed ban on swimwear are more political gimmicks than real issues at hand. The government of the day would be well advised to move beyond such posturing and hopefully concentrate on issues such as safety of the female traveller, so that we may truly see Indian hospitality flourish.
In Conclusion
To summa rise, the decisive outcome of the 2014 elections is expected to improve investor confidence in the country. India’s strong economic fundamentals coupled with a stable political situation will help revive growth in the medium-to-long term. The Indian hospitality sector is likely on the cusp of a much awaited growth trajectory and we end this year’s publication on a note of hope and optimism. HS
RNI No. DELENG/2012/47318 Posting Dt. 16-21/09/2014 Licence No. U(C)-105/2013-2014 W.P.P. at NDPSO Postal Reg. No. DL(C) 01/1353/12-14
Date of Publication: 19/09/2014
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