‘Indian hotel industry set to regain lost sheen in 2023’

“We have learned many critical lessons when things limped back to normalcy in 2022,” says Vishal Lonkar about how the year has been for Renest Hotels & Resorts. For the General Manager – Business Development at the 10-hotel strong chain, the most important lesson this year has been deriving value by efficiently serving domestic travellers and exceeding their expectations.

“The third quarter of 2022 ended well for our hotels as they continued to register robust yearly growth. In some of our properties, we are, in fact, beating pre-pandemic revenues by as much as 40 per cent. We are touching an aggregate 80 per cent occupancy every month in some properties. ARRs for most locations have seen a growth,” he shares.

Renest Hotels & Resorts has been expanding its stronghold in India, having most recently opened Renest Haridwar in order to strengthen its position in the spiritual tourism market after presence in Shirdi and Tirupati. The chain is also looking at expanding the homegrown brand Renest in Gurgaon, Goa and Udaipur, as per the current plans.

2023 and hospitality industry

Speaking about his prediction for what the coming year has in store for the hospitality industry, Lonkar opines, “The Indian hotel industry is set to regain its lost sheen in 2023. From occupancy to ARR, everything will improve dramatically. Domestic travel, especially the leisure segment, gave wind to the industry this year and is expected to continue into the next. Meanwhile, international arrivals - both leisure and business, are on an upswing. Hopefully, what is happening in China will not have major impact on tourism in our country.”

For the Indian hospitality industry, 2023 is special for another reason. “India’s G20 presidency brings with it a great opportunity for the tourism and hospitality industry. The country will host delegates from the participating countries over the duration of a year and this might also pique the interest of tourists to travel to India. After two years of absolute stalling, this has come as a golden opportunity for the tourism and hospitality industry. Both private sector players like us and the government aim to go full throttle to promote tourism under the ‘Incredible India’ banner,” he shares.

In order to take full advantage of the opportunity that 2023 is set to bring, Lonkar suggests that the government should reinvigorate the Champion Sector in Services Scheme (CSSS) that was introduced by the Ministry of Tourism (MoT) to incentivise international conference business in India. “The initiative was taken with the objective of increasing foreign tourist arrivals, employment, and foreign exchange earnings. However, the project got stalled owing to the pandemic. The industry has been clamouring for infrastructure status for over two decades. The government needs to drastically bring this down to step up development in the sector,” he says.

Surge in cost of travel

The year 2022 saw a surge in the cost of travel, with predictions also stating that a similar surge is on the cards for 2023. On this, Lonkar says, “The rise in cost of travel is a spillover effect of rising inflation, which is being witnessed globally. However, the overall outlook for travel is generally quite optimistic, particularly with regard to international travel, which is expected to ramp up in 2023. The American and European international travellers are typically more affluent travellers and are therefore, proportionately less impacted by rising costs and inflationary pressures.”

He adds that the relative strength of the US Dollar and the opening up of foreign destinations support the notion that the travel industry economy will see international travel as a strong area in 2023. “Henceforth, we are expecting a strong rebound in both business and leisure travel from overseas,” he avers.

Strategy for sustaining business growth

For Lonkar, the future of hospitality lies in more clustering of resources for strategic positions such as General Managers - Sales or Finance, handling multiple hotels. “That's the path we have taken with our new openings so that we can improve efficiencies while giving more hands for the ground level team handling our guests. We are holding on to our rates and that's helping big time. We did not let go of any of our employees and this has really held them in good stead. With a very low attrition rate, we are reaping the benefits of employee retention during tough period as business is nearly pre-pandemic levels,” he asserts.