By Bikramjit Ray ONE of the country’s iconic hotel brands, The Leela Palaces, Hotels and Resorts, and the company that controls it (Hotel Leelaventure Limited, henceforth mentioned as The Leela Group), have been struggling with debt for quite some time, but the industry grapevine is abuzz with whispers that the luxury chain is selling two significant assets to turn around its fortunes. The Leela Group, which sold its Kovalam property in 2011 for Rs 500 crore, is in the process of selling two other hotels in its portfolio. If rumours are to be believed, the two hotels are the Leela Palace Chennai and The Leela Goa. No one within the group was willing to speak when contacted by BW Hotelier, citing a non-disclosure clause, but we have heard that negotiations are on and due diligence is being done for both properties. The company’s objective is to wipe out a considerable amount of the debt which the Leela group is struggling under, even with rising revenues. According to an ICICI Securities Ltd report dated June 5, 2014, the group’s total debt stood at Rs 4,976 crore in FY14. The Leela Group’s annual interest commitment is said to be over Rs 500 crore, while its estimated turnover is Rs 822 crore, so the going it still very tough. A significant reduction of debt is desperately needed, the report states. The Leela Group got into a high debt situation after opening its luxury hotels first in Chanakyapuri, New Delhi, and then on the Adyar Seaface in Chennai. The two hotels set the group back by Rs 2,900 crore. The high capex in these two properties ’ averaging Rs 5 crore per room ’ coupled with moderate market growth has led to heavy losses over the last two years. The group’s combined net loss, according to ICICI Securities, now stands at Rs 875 crore. To pare its debt, the company first sold its Kovalam property, but it did not help much. In 2013, the group executed an agreement for sale with Reliance Industries for the Chennai IT Park. The deal was pegged at Rs 170.17 crore. If the sale of the Chennai and Goa hotels go through as planned, there is hope that The Leela Group will eventually get back into the black. Bikramjit Ray is the Executive Editor of BW Hotelier.
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By Archit Gupta In the hurly burly high stress world of business travel a good night’s sleep is of paramount importance. Hotels and hotel chains are always striving to make the slumber experience of the guest as comfortable as possible. The most important thing when it comes to sleep is what you sleep on and in this field; the hospitality industry has made giant strides. When you enter a modern hotel room, there are a number of trends in the bed and bedding segment of the hotel industry in the international market. These include, electric beds which can be adjusted to increase comfort’ which is very popular with high-end suites in luxury properties. Mattresses with Eurotop or PillowTop construction are another growing trend in the bedding segment. These add more comfort cushioning layers and end the hassle of flipping and turning the mattress every few months as they are one side usable. This reduces the load on the housekeeping department as well. Finally, the pillow menu is an offering which has spread in the industry across the subcontinent as well and is just another customization hotel’s offer for a restful stay. As far as lifespan of a hotel bed and mattress is concerned, it should easily last 8 to 10 years, though internationally due to hygiene issues, the trend is to replace mattresses every five years. The choice of mattresses in India has also seen a massive increase in recent years, with the entry of big international brands entering even the retail market. This has led to not only better product specifications, but better construction and international quality beds and mattresses which we at King Koil, also happen to follow. ’We are the only brand in the world which is spread over 85 countries, making us the world’s most popular premium mattress. The core strength of our brand is the penetration of the hospitality market in most countries we are present in. If we talk of the Asia Pacific region, we have the most premium and extensive client list containing almost all of the top hotel chains. ’In recent past, we have supplied King Koil bedding products to hotel properties operated by Starwood, IHG, ITC Hotels, Carlson Rezidor, Golden Tulip, Accor, Taj and Best Western. Archit Gupta is Managing Director of King Koil.
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BENGALURU ranks 16th among 50 cities across the world where a global agency tested hotels for the quality of their WiFi connectivity and the number of them that offer the service for free. It is also the only Indian city to make it to the list, where the Top 3 are Stockholm, Budapest and Tokyo. Berlin and Munich are just above Bengaluru at Nos. 14 and 15 respectively, and Seattle, Rome and Barcelona follow it in the global rankings just released by www.hotelwifitest.com. The ranking are limited to 50 countries that are in Hotel WiFi Test's most-tested category. Not getting free WiFi connectivity has become a sore point with travellers across categories because it is seen by them as an entitlement because of the high prices they other pay both for their rooms and food and beverages. Keeping the sentiment in mind, a quick look at the Hotel WiFi Test global rankings reveals that Istanbul and Stockholm are the most generous cities in this regard - 91.5 per cent of Istanbul hotels offer complimentary WiFi; the percentage is 89.5 in Stockholm and 87.9 in Barcelona. Among the much-travelled cities, Dubai is the stingiest, with only 40.9 per cent of its hotels extending this courtesy. Tokyo is a distant second from the bottom with 51.2 per cent and Washington, D.C. and Las Vegas follow with 58 per cent and 59.1 per cent of their hotels offering WiFi services for free. The global rankings also throw up interesting regional snapshots. Asia, for instance, is at the top for hotel WiFi quality (49.5 per cent), but at the bottom for the percentage of hotels offering free in-room WiFi (61.2 per cent). South Korea is the leader in hotel WiFi quality (92 per cent) by a healthy margin in 7.1 percentage points to the No. 2, Japan. Even though Sweden is only No. 7 in the country ranking, Stockholm is No. 1 among cities. The definitions following by the study are: A hotel, according to www.hotelwifitest.com, judged as having adequate WiFi must provide an expected download speed of at least 3 Mbps (the Netflix recommendation for SD-quality streaming) and an upload speed of 500 kbps (the Skype recommendation for high-quality, non-HD video calling). "This type of ranking is easy to understand, and it makes perfect sense from a practical standpoint. For most travellers, having super-fast and consistently stable WiFi is a great bonus, but their first priority is ensuring that basic quality expectations for Internet access are met," the study points out. The free WiFi percentage is calculated as a ratio of hotels that offer free in-room WiFi to all hotels for which the WiFi price structure and availability is known. Hotel WiFi is a synonym for in-room WiFi; hotels that offer free WiFi only in public areas are not counted among the ones offering free WiFi. Sourish Bhattacharyya is the Consulting Editor of BW Hotelier.
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LUMINARIES from the tourism and hospitality industries mooted the idea of creating a tourism promotion council assist and advise the Government of Rajasthan's Tourism Department at a BW Hotelier Roundtable at the ITC Rajputana in Jaipur this past weekend. The gathering discussed the present situation of hotel occupancies and tourist arrivals in the state and the problems that needed to be addressed. The idea of forming the council, to act like a "think tank for tourism", was discussed among those present, who were also a part of the newly formed and soon to be registered Federation of Travel and Hospitality, Rajasthan (FTHR). The discussion started with Bhim Singh, who founded Rajasthan Tours in 1959, going down memory lane. "I remember tourism in post-Independence Jaipur really began in the 1950s, when the city had only one hotel, in front of the railway station, called Kesar-e-Hind," he reminisced. The establishment was run by a Muslim gentleman who used to be the manager, cook and waiter, and also operated the pick-up and drop facility for guests to and from the railway station. Much progress has been made since then. "I think there is an imbalance between the glut of rooms and tourist arrivals in Jaipur," said Randhir Vikram Singh, Joint Managing Director of Hotel Castle Mandawa. "A lot of people who are not professional hoteliers but are involved in the real estate or in the alcohol business park their money in hotels, drawing a number of chain hotels from across the world to start operating out of Jaipur," Singh said. This has led to an explosion of hotel room numbers in the city. There is also an imbalance of trained manpower and the number of rooms available in the city. There are more problems as well. Jaipur airport hasn't really developed as an international terminal. You only have four international flights coming in daily from the Middle East. You have no European airline coming into Jaipur. Everyone lands in Delhi and uses travel agents there to come into the state. Rajasthan is actually losing out in the bargain, Randhir Vikram Singh informed us. The hotels too are now betting against each other, trying to fill up rooms. The ARRs compare poorly with South India, for instance. "What sells for $250 a night there, can be got in Rajasthan for $30," Randhir Vikram Singh said. But there is always the brighter side. "When we used to have our meetings a decade ago, we used to talk only about the shortage of rooms, I remember the room requirement in the starred category then used to be a mere 3,000," Gyan Prakash, ex-director of FICCI, Rajasthan, said. The shortfall doesn't exist anymore. "The present government is very proactive on tourism, so the situation is looking good," he said. One of the great contributors to tourism revenue in Rajasthan is the domestic traffic, he added, saying that this really helps shorten the off-season, which confronts you if you are dependent entirely on the international market. "The biggest challenge today is to push marketing initiatives in Europe and the US to help bring in more international tourists into the state," said Kuldeep Singh Chandela, Managing Director, Spice Court Restaurant. When we speak to tourists from those countries, we discover that there is hardly any marketing effort for Rajasthan as a destination in those markets, he said. "We should have more extensive campaigns and the official delegations should include more tour and travel operators as well as hoteliers, not just government officials," he said. There is no longer a dearth of rooms in Jaipur, Chandela emphasised. What was needed, though, was a regular flow of tourists "so that we can fill up the rooms". Mohan Singh, Managing Director, Rajasthan Tours, raised the issue of air connectivity, saying Rajasthan was better off in this regard between 1984 and 2004. "We are missing the connectivity among tourist centres within the state. Jaipur, Udaipur and Jodhpur are not connected, which hampers the way we can package Rajasthan," Singh said. "Rajasthan is the most mature tourism market in India, yet growth has been lopsided. Moreover, a mere 20 per cent of the industry is organised," Sunil Gupta, General Manager, ITC Rajputana, and President, Hotel and Restaurant Association of Rajasthan. What the sector needs, he said, is a structured approach, structured marketing, structured selling and structured functioning. The widespread concern over saturation of the rooms market came across in the discussion. It may take a couple of years for the market to stabilise and even as it heads in that direction, the industry is getting focused on bringing in many more tourists from all over the world and, more importantly, within India. Bikramjit Ray is the Executive Editor of BW Hotelier.
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New consumers are looking beyond just the hotel, but is the industry prepared to wake to this new reality? The perceived differences between the Indian and international travelers are now blurring. Don't forget that a lot more Indians travel abroad, so they are getting used to the service abroad. A lot of mid-level operators coming into the country are now giving the kind of service they offer in their hotels abroad. There are no bell boys in many of the new three-star hotels. You have to come down to get a newspaper, which is an add on. I believe that the over-expectation of Indian customers is getting tempered today. They have more realistic expectations. What has changed today is that customers no longer expect just a good hotel. They want good food and a good experience overall. Whether they are there for leisure, business or a conference, it's the overall experience that they get in a hotel that counts. What do we do differently, being an international brand, in India? We are bringing in an entirely new culture. Many Indian hotel companies are trying to do new and different things. A number of international companies are already doing them. We have the experience and expertise globally, which makes it easier for us to bring it into India. For the Indian companies, the challenge and the opportunity is to quickly understand this fact and do it better. I don't for a moment believe that Starwood can come here and operate hotels better than Indian companies can, but I certainly believe we bring in more efficiencies to the use of technology and to the use of our global processes, which Indian companies will certainly start adopting as well. The transition in the attitude to service we see in the hospitality industry isn't just limited to it. Indians are changing the way they live. Look at social media platforms. Indians use them more than anywhere else in the world. We have Gen Y travellers, millennial travellers who are more adaptable to global trends. When we have a 60-year-old customer, they would probably say, "I don't want to do laundry", while someone who is from the younger generation, a techie who travels abroad, may not mind. He has done it abroad, after all. The altering demographics of the customers are making changes like those happening in mature markets easier to adapt to India. When we speak about service in hotels, we have to also look at whether India has enough people to staff the industry. The industry is growing so fast that questions being raised on the quality and availability of talent to meet its demand for skilled hands. Rooms will remain in short supply, but what about the shortage of talent? The talent crunch is a reality that the industry must face up to. Nonetheless, we are heading towards another golden era of the hospitality industry. The surge in business that it saw between 2003 and 2008, when demand grew faster than supply, is poised to come back in 2015. It's back to the days of growth. As spoken to Bikramjit Ray. Dilip Puri is the Managing Director-Indian and Regional Vice President, Starwood Hotels & Resorts.
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THERE are changes in the air for the Taj Group. Rumour mills are working overtime, but one confirmed piece of news is the imminent departure of Hemant Oberoi, the master of restaurant launches and Corporate Chef of the chain's luxury division. A very reliable source has informed BW Hotelier that Chef Oberoi is retiring this year. When we contacted Chef Oberoi, who is now in Davos, Switzerland, he neither confirmed, nor denied the news. "No comment," he said, and added: "Everyone has to be in a company as per company rules." A culinary super star, Chef Oberoi has launch a series of prestigious restaurants, from Mumbai's Zodiac Grill to the Masala series, Blue Ginger, Wasabi by Morimoto and Varq. He joined the chain of hotels as a trainee chef in 1974 after graduating from the Pusa Institute of Hotel Management, New Delhi. It took him just 12 years of single-minded dedication to climb up the kitchen ladder to become the Executive Chef of the Taj Mahal Palace & Tower, Mumbai. In his four-decade-long career with the Taj, he has won multiple awards, been invited twice to demonstrate his skills at the World Gourmet Summit, and he was the only Indian chef to be invited by Alain Ducasse, the man with the most Michelin stars, to the 25th anniversary bash of the Louis XV in Monaco. In his four-decade-long career with the Taj, Chef Oberoi has prepared meals for dignitaries such as Atal Bihari Vajpayee, Bill Clinton and Margaret Thatcher, and for Hollywood celebrities, notably Brad Pitt and Angelina Jolie. What will life be post-retirement for the chef who's famous for his daunting 7 a.m. to 11:30 p.m. daily work schedule? Prefacing his statement with a "No comment", Chef Oberoi assured us that he was not one to rest on his laurels, nor change his routine. Bikramjit Ray is the Executive Editor of BW Hotelier.
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