By P R Bansal
I AM a civil engineer and did not have a background in hospitality or any experience in terms of owning Hotels. I got into the hotel trade when I found a huge gap in the level of service and guest expectations in the cities I visited on work. You had either Five Star hotels or unbranded properties, there was nothing in between. I took the plunge, started with just one property and now have 24 properties across different verticals; leisure, business and pilgrimage.
We might have grown well, but the challenges faced by mid-sized hotels are enormous. First and foremost, is competition from international chains. The chains initially try to capture the market and price out local competition. To face this onslaught, one needs to have strong USP and price competitiveness. Thankfully at Lords, we pride ourselves for our high numbers of repeat guests. Any group who is on weak wicket though, can be easily swept away.
Branding and publicity for better recall and brand perception is also a must. Midsized hotels struggle here because of their miniscule marketing budgets. Any compromise at the marketing level can lead to the brand not getting any recognition and in the absence enough sales staff, selling room nights is an uphill task, not to mention trying to keep ARRs up. Fortunately, we are in the strong position, where our publicity budgets are worked out in advance and we are able to rationalise our marketing spending.
Another important issue is the lack of matching civic infrastructure. Lot of midsized and budget hotels is situated in the 2 tier and 3 tier cities. In terms of business, these have grown tremendously, but civic infrastructure like roads, transportation, connectivity and power have not kept pace. The basic urbanisation issues have not been addressed and those using these properties are greatly inconvenienced because of this.
Besides the above issues, there is a huge challenge in terms of training and retaining staff. There is huge shortage of skilled hotel staff and this is more acute in budget hotels. We have overcome this by having our own training institute, but a lot of budget hotels suffer in a big way, because of lack of trained staff.
But even with these challenges and having to deal with varying taxation and government policies, there is huge opportunity and potential in this sector. India is one of the fastest growing economies with a very young working population. Either on work or leisure, they travel a lot, offering huge opportunity for those in the budget hotel segment. The present government too has placed major thrust on tourism. It is considering a tax holiday/concessions for budget hotels and this measure will go a long way in improving the business prospect for budget hotels.
At Lords Hotels and Resorts, we are very upbeat and look to aggressively expand our presence with several new properties opening in Agra, Jodhpur and Bhaktapur in Nepal. We are confident of growing to 45 properties within the next couple of years.
P R Bansal, Managing Director of Lords Hotels and Resorts.
