Smart Buildings Help Achieve Sustainability

The courage and resilience displayed by the hospitality industry in 2020-21 has been remarkable. Demand compression and liquidity management have been the central themes over the last 18 months. Now, it is fair to say that the industry is better prepared which is reflective in its performance in recent months. While the recovery graph appears wavy, it is on the way up. The bounce back after the second wave was sharper, making the forward outlook very positive with the upcoming peak season being a catalyst to the pent up demand. One of the largest vaccination drives in the world is also bringing back renewed confidence in India.

The positive trend that the Indian economy witnessed after the second wave has triggered forecasts of 10 per cent GDP growth by five major agencies. Global institutions predict India to be the third-largest economy by 2030 which will demand accelerated growth by the hospitality sector as well. India’s unique economy built on an intra-India framework will put to test our industry’s ability to not only keep pace but also find its way to be one of the cornerstones of India’s growth story.

It is, therefore, imperative that lessons learnt in the recent past drive a resolve within the industry and the Government to rework policies and institutions to make the industry significantly more efficient and make-up for the lost time.

ibis Hyderabad Spice It Restaurant

CHALLENGES AND IGH BUSINESS 

GOP, occupancy, ARR and the other thumb indices and measurables are critical for a turnaround and bounce back. Uncertainty, demand compression, liquidity, health and safety, have been some of the key challenges. As we were well-prepared with most of the planned interventions by February-March 2020, it allowed us to strike the right balance between employee and customer safety and security, asset maintenance, revenue and cost discipline, development in our ongoing projects and working with various agencies to provide support to social causes. 

We worked alongside the governments of different states for the Vande Bharat repatriation groups and quarantined guests for months. We ensured that we deepened our engagement with all our stakeholders especially during the first lockdown and continued the discipline once the country started to reopen. This ensured we were well prepared along with our stakeholders to drive a confident revival. This time has been well used by us to create some structural changes which will continue to drive efficiencies going forward. As an organisation, we are, therefore, empowered and committed to expeditiously navigate these difficult times. This has allowed us to create an arbitrage for the future as we rebuild our balance sheets.

Hub Bar, ibis Gurgaon

Throughout, we diligently ran three forecasts which were updated initially on a weekly basis and then monthly. We have seen in the last quarter that our revenue forecasts for the year almost doubled. Aggressive trends like this will pull the industry out of this vortex in the short and medium term. Intra-India demand will continue to hold centre-stage which will grow over time as the rest of the world resets its travel policies. We are forecasting a significantly improved FY 2022. Should that happen on plan and uninterrupted, it would give a clean run to get to a pre-Covid level in and around FY 2023.

RELATIONSHIP WITH ACCOR AS AN OWNER

Our relationship with Accor thrives on mutual trust and a shared vision to transform the hospitality sector through an efficient development model backed by a sound financial structure. This has enabled us to be market leaders as a hotel owning and development company in India and together, we have achieved a domestic edge over all our competitors in the mid-market segment.  We worked together to realign our operating structures to ensure we met the challenges head-on and prepared ourselves for the future. At the same time, we supported the Government initiatives and were frontrunners with quarantined travellers, Vande Bharat repatriation and several other efforts across the country with frontline workers.  The partnership is committed to run compliant hotels and we were among the first ones to launch our All-Safe certification with Bureau Veritas and committed vaccination programmes. Our performance this past year has been a testament to the success of this relationship, and we will continue to work together as we continue to grow the portfolio.

ibis Jaipur Spice It Restaurant

DIVERSIFICATION PLANS

The diversity that InterGlobe and Accor bring together is unique and the cornerstone of our success. We have a very deeply engaged joint venture with Accor where we work closely with them towards growing the ‘ibis’ brand in India. This joint venture is unique and one where our association has been for over 15 years. We today have 17 operating hotels with six under development, totalling 4,100 keys. We are committed to continue developing and raising the benchmarks of the smart economy segment with high quality buildings with state-of-the-art design, efficient operations, all of which are totally focused on the new emerging Indian traveller. 

ibis Kolkata Rajarhat

BUILDING NEW SMART HOTELS 

The industry’s need to bring in sustainable tech interventions has never been greater. We have been working on several technology interventions for several years now and evaluating newer systems in the areas of revenue management, e-audits, energy, central procurement, centralised finance, property management, dynamic pricing, and sales channels. Some of these will go live soon and others are under a test environment. These bring in significant efficiencies. For example, our project management tools help us plan, coordinate and schedule and bring down build time significantly. Energy management systems that work on IoT can bring energy costs down by 8-10 per cent.

ibis Kolkata Spice It Restaurant

Smart buildings help us achieve our sustainability vision with initiatives such as wheeling in wind and hydel power, retrofitting existing hotels enhancing solar power generation, enhanced air filtration systems. Also, we have been working to deliver special offerings of visual and experiential value in F&B, guest services and in-room entertainment to meet the demands of varied demographics.

PROJECTS IN PIPELINE

We are planning to launch six hotels with over 1,083 keys in the next three years. First up is ibis Vikhroli which is opening its doors in October this year with 249 keys. This would be followed by two more ibis at Thane and Hebbal, along with ibis Styles at Vagator, Goa next year. In 2023, we would be in the process of launching our first hotel outside the ibis brand with the 149 keys Novotel City Centre in Bengaluru, our fourth property in Bengaluru with a new gen look and feel. To further strengthen our presence in Mumbai, we are initiating a new hotel, ibis Kalina with 207 keys to open by 2024. India will continue to grow and offer ample opportunities to build supply to match this growth which is going to keep us busy for coming few years.