I DO BELIEVE that no power on earth can stop an idea whose time has come. We live in exciting times and India's time is now. History will record these as the golden years of Indian tourism. But numbers tell a different story. India's share of the world tourism pie is a minuscule 0.7 per cent. With 6.8 million international visitor arrivals in 2013 (a number that is likely to rise by 7.8 per cent when the 2014 figures are finally in), India is ranked No. 10 in Asia and No. 65 among 140 countries in the WTO Travel & Tourism Competitiveness Report 2013. Even the Ministry of Tourism's target of 11 million international visitor arrivals by 2017 will take India's share in global tourism to a mere 1.0 per cent. We cannot wait any longer to convert the country's natural, economic and cultural advantages into a strong competitive advantage. To enable the industry to do it, the government must respond proactively to our ten long-standing demands. Ensure that the proposed GST regime gets the much-deserved level playing field. Grant infrastructure status, including hotels above Rs 20 crore. Revisit the taxation policy on exports and aviation turbine fuel (ATF). Promote the idea of 'One India', or seamless tourism across the country. Eliminate double taxation and enable depreciation benefits. Deliver on Atithi Devo Bhava. Alter the perception that India is 'unsafe' by creating a tourism police force and sensitising law-enforcement agencies to the special needs of women travellers. Create islands of excellence -- a minimum of one per state -- and evolve from 'World Class Products' to 'World Class Experiences'. Focus on new potential source markets such as China and give tourism from neighbouring nations the big thrust it requires. Invest in potential growth segments: yoga and wellness; culinary tourism; Buddhist circuits (four out of five are in India); adventure and wildlife; river and seas cruises; Himalayas; MICE. The Centre and the states must work in unison with the travel and tourism sectors to harness the vast potential of Incredible India. The government has already demonstrated its sincerity to address these demands and emerging opportunities beckon. In this environment, with the Namaste as the enduring symbol of the ITC Hotels experience, we offer comprehensive hospitality solutions with a collection of more than 100 hotels in over 70 destinations in India. We have upwards of 40 hotels in various stages of development with 5,000-plus rooms being readied to be added to our inventory over the next five-six years. We have made our first foray into the leisure segment with a luxury resort -- the ITC Grand Bharat at Manesar, Gurgaon. It will be followed by the ITC Vilasa at Mahabalipuram in mid-2015. And we established yet another milestone in the journey of ITC Hotels, when we broke ground for our first international project, the ITC One at the Colombo One Luxury Hotel & Residences in Sri Lanka. Our pipeline also includes hotels in Ahmedabad, Amritsar, Bhubaneswar, Coimbatore, Guntur, Hyderabad, Kathmandu, Kolkata and Srinagar. ITC's triple bottomline approach to business is reflected in our ethos of Responsible Luxury -- offering luxury experiences that are planet positive. Responsible Luxury at ITC Hotels is manifest in our hotel concepts that are 'rooted to the soil', in our world-renowned Indian dining concepts such as Bukhara and Dum Pukht, and in our globally acclaimed spa brand Kaya Kalp. Our Responsible Luxury endeavours have led to 55 per cent of the total energy demand of ITC Hotels being met through renewable sources. Water consumption has gone down by 50 per cent across the chain over the last five years. Almost 100 per cent of the solid waste generated is reused or recycled. And more than 40 per cent of our food ingredients and beverages are sourced within a 100km radius to create a carbon-positive footprint. Nakul Anand is Executive Director, ITC Limited, and Chairman of the travel and tourism industry's new national umbrella body, FAITH The article first appeared in the inaugural edition of BW Hotelier, JAN-FEB 2015.
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We believe that the hospitality industry in India offers opportunities for strong and steady growth. The fundamentals that drive growth in the industry are strong and these continue to propel the sector. Some key drivers are continued growth of the Indian economy, steady investment in infrastructure, growing numbers of international and domestic travellers, and a burgeoning middle class with increasing disposable income. Additionally, the government's stimuli, such as extending the Tourist Visa on Arrival Scheme from 11 to 180 countries, and the recent introduction of the e-visa facility for 43 countries, will provide an additional boost to tourism-related activities in the country. Hilton Worldwide is a leading global hospitality company that offers a powerful portfolio of 12 brands catering to all customer segments, from luxury and full-service to mid-market. Four of our brands have a presence in India. These include our upscale, full-service brands (Hilton Hotels & Resorts and DoubleTree by Hilton) and our mid-market, focused-service brands (Hilton Garden Inn and Hampton by Hilton). Presently, we operate 14 hotels and resorts in India and we have a presence in seven of the top ten hospitality markets in the country (in terms of number of branded hotel rooms). Our footprint now extends from New Delhi, Gurgaon, Jaipur and Agra to Mumbai, Chennai, Bangalore, Thiruvananthapuram, Goa, Vadodara, Pune and Shillim in the Western Ghats. Over the last 12 months, we have entered four new markets -- Bangalore, Thiruvananthapuram, Jaipur and Agra -- and opened five new hotels: Hilton Garden Inn Thiruvananthapuram, Hilton Embassy Golf Links and DoubleTree Suites by Hilton in Bangalore, Hilton Jaipur and DoubleTree by Hilton Agra. With our entry into Agra, we now have a presence across the Golden Triangle. We are committed to India, one of our key strategic growth markets, and continue to explore opportunities to extend our network in the country through a multi-brand and multiple-partner strategy. We now have a robust pipeline of 17 hotels with 2,899 rooms, which has given us the confidence to launch our luxury brand, Conrad Hotels & Resorts, in India. With over 4,250 hotels in 93 countries, at Hilton Worldwide we realise we are in a position to be able to effect positive change for our community and planet. Hilton Worldwide was the first major multi-brand hospitality company in the world to make sustainability measurement a brand standard, and a critical performance measure, just as quality, service and revenue. Our continued effort in this regard is resulting in the enhanced efficiency of our operations and a mitigation of their environmental impact. Earlier this year, we announced a global commitment to impact the lives at least one million young people by 2019. Our endeavour is to enable young people by exposing them to new cultures, preparing them for success in the workplace through mentorships, apprenticeships and our global career showcase, Careers@HiltonLive: Youth in Hospitality Month, which was our largest ever in May this year with more than 600 events reaching 73,000 young people across the globe. Daniel Welk is the Vice President (Operations-India), Hilton Worldwide
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India is at present an under-penetrated hotel market. In terms of hotel rooms per 10,000 people, India has a little over one, compared with 28 rooms globally and 180 rooms in the US. Even if one assumes that the country's consuming population is only 10 per cent of the actual population, there should still be a requirement of three rooms per 10,000 people based on the global average. Due to structural issues, India is also a unique market for hotel development. The high cost of land, the high cost of short-duration debt and opaque localised approval processes create significant barriers to entry. Consequently (and unlike in the rest of the world, especially the US), most of the hotels in the country are owned by individuals (rather than institutions) with an inverted pyramid of supply, wherein a majority of hotel rooms in India are either upscale or better. As an analogy, imagine a scenario in which the majority of airline seats in India were business class. Clearly, as a result of these factors, there is a price-demand mismatch with more high-priced rooms than required and far fewer lower-priced rooms. It means that over the next few years, India can easily absorb another 200,000 rooms in the 'right'-priced mid-scale (three-star) and economy (one- or two-star) categories. If one looks at the aggregate demand-supply mismatch in India, it was in favour of hotels up until about 2007-8, when occupancies across the country were in excess of 70 per cent. Over the past six or seven years, supply has grown at close to 16 per cent CAGR, and demand at only 12 per cent CAGR. Consequently, national occupancies for the last few years have been under 60 per cent. This has led to irrational pricing, great financial stress for hotels and significant debt on their balance sheets. Going forward, additional supply injections are slowing down to about 7 per cent CAGR over the next four or five years, whereas demand is expected to continue to rise at a minimum 12 per cent CAGR. It is clear therefore that by 2018-19, hotel occupancies across the country will once again cross the magic figure of 70 per cent. Indian hotels have a bright future provided they are able to manage short- to mid-term cash flows and debt service obligations. The Lemon Tree Hotel Company (LTH) at present owns 3,000 rooms and manages an additional 300 rooms across 15 cities in India. Since the launch of its first hotel in 2004, the company has grown at close to 50 per cent CAGR over the past decade. Another nine owned hotels aggregating 2,000 rooms are under development. By 2020, LTH will most likely own 7,500 rooms and manage an additional 10,000 in 30 cities across India. At that point in time, the company will control about 7 per cent of the total supply of branded hotel rooms in the country and more than 15 per cent of mid-market rooms. Of these, about a third will be upscale (four-star), another third, midscale (three-star) and the balance, economy (two-star). Patu Keswani is the Chairman and Managing Director, Lemon Tree Hotel Company
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