By Rishi Puri
IN THE last 10-15 years Hospitality industry has grown by leaps and bounds. If we look at the past, people used to travel less as businesses were confined to certain region. Leisure travel was almost negligible with the segment almost being nonexistent. Now with the advent of the technology, the whole world has opened up for business. Another thing is that with double income families becoming norm, the disposable income has grown and with that there is a huge rise in demand for leisure travel as well. All in all there has been exponential growth in demand for Hotel rooms in business, leisure, pilgrimage and the MICE sector.
With the increase in demand there has been increase in the supply of hotel rooms too. Many new Hotels have come up. New International Hotel chains have announced major plans for India. But what has happened is that in a short run big cities like Delhi, Kolkata, Bengaluru and Chennai had greater influx of hotels then the demand itself. Last few years have been really tough for the industry and Average Room Rent (ARR’s) have actually dropped as the demand has not kept with the supply. But this is a short run aberration and going forward with the economy picking up, the demand is definitely going to rise. Further this phenomenon has remained confined to Hotels in big cities and that too in luxury and super luxury sector only. The one’s in Mid Hotel (which my group Lords Hotels & Resorts belongs to) has grown.
The real growth is in tier 2 and tier 3 cities. They are the real hub of business activity and so far the competition from the branded hotels has not yet come in these cities. Our property in Kandla (a major port city in Gujarat) has 100 percent occupancy almost throughout the year. Same goes for our other properties in other industrial cities. Yes there are problems related to infrastructure, problems from local civic authorities and reluctance of top staff to relocate to these regions but this is more than offset by cheaper land values and above all readymade demand. Another segment which is growing and asking for better hotel accommodation is the religious travel. Religious travel was always considered as lowly with elderly who were undertaking these trips were expected to stay in sarais, guesthouses and likewise. But there is a transformation in this sector, with nowadays people demanding better and branded accommodation. And these are recession proof segment. MICE- which is the traditional bread and butter of the Hotel industry is directly related to state of the economy but the religion one at least in India is growing up.
Another trend is direct booking by the guests through the website. This has caught on big way in the past 3-4 years. This is not only benefits the guest as they get competitive room fares but it benefits the Hotel Chains as they save on the commissions which they would otherwise pass on to channel partners. So online presence is a major issue and hotels have started allocating good part of their marketing budget on online promotion.
One more thing would like to share that Hotels have become very environment conscious. They see it is if in the society’s interest, it is in their interest as well. In our new properties we have built facades in such a way that during day there is least requirement of lighting. This saves power costs and of course can be termed as environment friendly.Similar other small- measures are being taken which contributes to environment conservation.
Indian Hospitality Industry across all segments has huge scope and I feel we have barely scratched the surface.
The Author is Vice President, Operations, Lords Hotels & Resorts.
IN THE last 10-15 years Hospitality industry has grown by leaps and bounds. If we look at the past, people used to travel less as businesses were confined to certain region. Leisure travel was almost negligible with the segment almost being nonexistent. Now with the advent of the technology, the whole world has opened up for business. Another thing is that with double income families becoming norm, the disposable income has grown and with that there is a huge rise in demand for leisure travel as well. All in all there has been exponential growth in demand for Hotel rooms in business, leisure, pilgrimage and the MICE sector.
With the increase in demand there has been increase in the supply of hotel rooms too. Many new Hotels have come up. New International Hotel chains have announced major plans for India. But what has happened is that in a short run big cities like Delhi, Kolkata, Bengaluru and Chennai had greater influx of hotels then the demand itself. Last few years have been really tough for the industry and Average Room Rent (ARR’s) have actually dropped as the demand has not kept with the supply. But this is a short run aberration and going forward with the economy picking up, the demand is definitely going to rise. Further this phenomenon has remained confined to Hotels in big cities and that too in luxury and super luxury sector only. The one’s in Mid Hotel (which my group Lords Hotels & Resorts belongs to) has grown.
The real growth is in tier 2 and tier 3 cities. They are the real hub of business activity and so far the competition from the branded hotels has not yet come in these cities. Our property in Kandla (a major port city in Gujarat) has 100 percent occupancy almost throughout the year. Same goes for our other properties in other industrial cities. Yes there are problems related to infrastructure, problems from local civic authorities and reluctance of top staff to relocate to these regions but this is more than offset by cheaper land values and above all readymade demand. Another segment which is growing and asking for better hotel accommodation is the religious travel. Religious travel was always considered as lowly with elderly who were undertaking these trips were expected to stay in sarais, guesthouses and likewise. But there is a transformation in this sector, with nowadays people demanding better and branded accommodation. And these are recession proof segment. MICE- which is the traditional bread and butter of the Hotel industry is directly related to state of the economy but the religion one at least in India is growing up.
Another trend is direct booking by the guests through the website. This has caught on big way in the past 3-4 years. This is not only benefits the guest as they get competitive room fares but it benefits the Hotel Chains as they save on the commissions which they would otherwise pass on to channel partners. So online presence is a major issue and hotels have started allocating good part of their marketing budget on online promotion.
One more thing would like to share that Hotels have become very environment conscious. They see it is if in the society’s interest, it is in their interest as well. In our new properties we have built facades in such a way that during day there is least requirement of lighting. This saves power costs and of course can be termed as environment friendly.Similar other small- measures are being taken which contributes to environment conservation.
Indian Hospitality Industry across all segments has huge scope and I feel we have barely scratched the surface.
The Author is Vice President, Operations, Lords Hotels & Resorts.
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