RevPar in Summer and ARR in Winter

BW HOTELIER got the opportunity to chat with Dhananjay Kumar, General Manager, The Suryaa New Delhi on his strategy to run one of the city’s most popular standalone hotel property. Here are some excerpts from the interview.

“Our strategy for this hotel, during summer was to fill up the hotel, take the revpar route because that's what you take to the bank. Last year, we closed summer occupancy at about 68 percent, this year it's been 85 percent occupancy and that has given us a good topline,” Kumar began by telling us.
This year, the hotel will be closing at around 80 percent occupancy. The strategy now was to increase the corporate base and the hotel has added 140 more companies for their rooms business in the last six months, to achieve their target, he added.

“In winter, we are going to look at the ARR route, because rate correction is very important. We have taken it up by around 12 to 15 percent on the base category (compared to last year’s winter rates). A lot of hotels have not revised their rates over last year. What has happened is PSUs like ONGC have also started taking two year rates which are flat and cannot be raised. So, a rate correction was very much needed,” Kumar stressed.

“Last year, we closed at 60 percent occupancy year round, with a winter rate of Rs 6000. This year, we're looking at at Rs 6,500 to Rs 7,000 only on peak season. Our strategy is very simple and based on demand-supply situation. We don't believe in RoE but in RoI,” he added.

While earlier, hotels with more than 150 rooms would need a crew base, this is not the case any longer, he said. For one, the hotel wasn’t very near the airport and there was Delhi Aerocity to compete with.

“Our hotel's strategy is to focus on corporates and FiTs. Because of a lot of construction work happening, with the Delhi metro for instance, the movement from Japanese companies is also quite strong. These companies have also increased their length of stay, from 2.5 days to around 3 months,” he explained.
When we asked Kumar about what’s new with his property, he began by explaining that four floors had gone through a complete facelift with new soft furnishings. Two other floors, which usually accommodated their groups had been given a complete renovation four years ago. All the public areas, including banquet spaces—8,000 square feet in total--have also been completely renovated.

“Our coffee shop is now completely new and expanded, to around 140 covers plus two PDRs, and we have done a format where 60 percent of the food is done in front of the guest. It's more hygienic and fresh,” he went on to say, adding that their oriental Asian restaurant, Sampan was aimed at the market for quick business lunches and dinner service, and now served Japanese, Chinese as well as Thai cuisine.

The biggest expense for a hotel as old as the Suryaa, Kumar told us was HLP (Heat, Light and Power). “We have installed a completely new broiler system and already been given 50 percent return in just two months. We are also using only PNG across the hotel. We have also changed our plant. All our public areas are lit with led lighting. Halogens used on premises are now only 7 or 8 watts compared to the earlier 50. Last month itself, our savings was in the region of Rs 10 lakh,” he added explaining the hotel’s power saving plan.