General Managers of leading hotel brands in India speak about the challenges and the business strategy in the year to ahead
The year ahead
I expect 2017 to be a strong year for hotels with demand continuing to out-pace the growth in new hotel openings. As India’s economic growth continues to out-pace the rest of the world, there is no doubt that hoteliers are expecting a healthy increase in both international and domestic travellers. I see 2017 as the serious advent of Citycations (a holiday spent in one’s own city) with families escaping to relax, be together and enjoy the facilities of a hotel for a one or two night break in their own city. We will see a large number of branded hotel openings in Tier II cities and leisure destinations which will be beneficial as it will not only offer more variety in choices but also provide a general uplift in consistency and quality throughout the sector in these geographies.
I believe it will be an exciting year for food & beverage with catering business, especially social and wedding business continuing to increase as hotels continued to be recognised as a perfect choice for larger events. The only question-mark, surrounds the long-term implication of demonetisation and the impact it has on catering business – initial indications are that for established hotels growth is still strong.
Growing average rates which have broadly been rather slow to grow in-line with inflation over the last few years. Especially in markets where occupancies are approaching 70 per cent or higher we as hoteliers need to ensure that we move the needle towards driving Revpar through rate. With all the growth in the industry attracting strong and ready talent is becoming increasingly tough.
Promoting the completion of the rooms’ refurbishment at The Renaissance, Mumbai and continuing to find ways of celebrating the hotel’s spectacular natural setting surrounded by Powai Lake and the greenery of Powai, whilst only 20 to 25 minutes from the international airport. We will continue to drive occupancy through higher paying transient segments and achieve a record year for groups and catering business.
Hotel loyalty programmes will continue to play a key role in attracting guests to hotels and now that the Marriott portfolio includes the Starwood Preferred Guest, Ritz Carlton and Marriott Rewards programmes, we are excited for the opportunity to give our members access to explore the world’s most admired destinations, choose from the most comprehensive portfolio of brands, and enjoy the benefits, recognition, and experiences of three award-winning loyalty programmes.
Indian hotels continue to lead the world in offering amazing value – there are not many cities in the world where five star hotels have rates under US$ 130.
– Nicholas Dumbell, General Manager, Renaissance Mumbai Convention Centre Hotel & Lakeside Chalet –Mumbai, Marriott Executive Apartments
The year ahead
2017 looks to be a very promising year with the experts talking about technology, dynamic pricing and personal experiences ruling being on an all-time high. Technology topped the charts for 2016, and that won’t change as we move into 2017. I am certain that there will be an increase in the mobile apps and its popularity. The second popular trend that is here to stay is dynamic pricing. It has been a constant in the world of global hospitality industry trends in recent years. With more and more business moving to online mediums, booking platforms and OTAs are bound to adapt the rates in order to meet the demand. Hospitality is all about people, and curating these special experiences that touch the guest’s heart will be the most important. Personal experience will have to be crafted and executed to perfection, keeping in mind the guest’s reason for travel and his needs during this stay.
Luxury and the expectation from luxury brands such as JW Marriott Pune is changing with times and keeping up with times is the new challenge that we need to prepare to face in 2017. Today’s concepts of luxury are way beyond the limousine and the 1000 count thread sheets; it’s become more about the experience. The salient aspects of luxury still remain, however that to guests is a given. What really sets apart a luxury brand today is the craftsmanship, localisation of the global offerings and truly the story that we tell our guests. That is what we need to set out to achieve and that will truly define how well 2017 pans out for us.
The competitive landscape within the hospitality industry in Pune has never been as dynamic as it is today. Supply in the city has grown by 2.4 per cent in 2016; and reports are indicating additional supply growth of 25 per cent till 2021 in the luxury/ upscale segment. With our merger with Starwood, we will be in a much stronger pool of best practices, gain access to a significantly higher base of loyalty members and more growth and development opportunities for the associates. We definitely have a competitive advantage as a product and our business catchment areas in the city are unique from competition. The other key strategy for 2017 for JW Marriott Pune is going to be to make every stay or experience at the hotel count. We want to reach out to each of our customers and create unique experiences at various touch points. Given that today’s business travellers look for pleasure and today’s leisure traveller trying to finish some work when away. Business travellers are blurring the distinction between business and leisure travel, and in 2017, it’s expected to be even more so as fun increasingly becomes an integral part of work. I feel 2017 will mark the year to go out and create unique memorable travel stories. With 17 long weekends, staycations will certainly be on a high. MICE too is showing a good potential pick up with large conventions looking at cities within India. Cities like Pune, Hyderabad and Kochi will see more growth with the varied options that they offer. Some key trends and opportunities that are setting the tone for 2017 are the integrated force of Marriott and Starwood hotels which will help us in consolidating our businesses. Renewed focus on F&B (specifically restaurants) offerings to withstand the proliferation of several standalone setups that are increasingly luring away diners and weddings which are grand affairs in India and the need of the hour is to cash in big time from these large-ticket size events.
– Vineet Mishra, General Manager, JW Marriott Pune
The year ahead
I foresee a prominent increase in domestic and international tourist footfalls to Mumbai this year. 2017 will see a rise of independent travellers seeking experiences rather than just pure luxury.
At The Leela Mumbai, we take pride in providing our guests personalised experiences tailored to their preferences, coupled with warm, sincere and anticipatory service with a touch of authentic Indian hospitality.
The ‘Bleisure Travel’ segment also looks promising this year and we would like to curate special packages to tap these business travellers. Mumbai will continue to be a preferred destination for the business traveller and with our state of the art banqueting facilities, robust sales processes and locational advantage of being close to the airports and Bombay Exhibition Centre, I am confident that we will continue to command a dominant share of this business as well going forward this year. I expect the MICE segment to also grow in the years to come and contribute to our business.
We do not foresee any particular challenge but our endeavour will be to retain a leadership position in the North Mumbai market and continue to grow our market share and focus on better RevPar.
We will continue to tap the business travel market and the leisure travel market. Our energies are currently focused on growing our market share from key feeder source markets – pan India, especially targeting high yielding FIT businesses.
Enhancing guest experiences by innovating and maintaining the highest standards of service will continue to be the central core of our overall business model and our objective would be to further
develop our online and social media reputation.
– Sameer Sud, General Manager, The Leela Mumbai
The year ahead
Tourism in India accounts for 7.5 per cent of the GDP and is the third largest foreign exchange earner for the country with a direct contribution estimated to be around US$ 47 billion. This is expected to grow at 7.2 per cent per annum during the period 2015 – 25 with the contribution projected to reach US$ 160.2 billion by 2027 according to an official estimate. While this is the overall scenario, the year ahead for us in Alibaug, looks positive and buoyant, going by the number of enquiries we have been receiving for the year 2017. Wedding bookings/ enquiries for as far as end 2017 have already started and therefore I anticipate the year ahead to be positive in terms of overall growth in occupancy. Yes, ADRs may be impacted marginally given the impact of demonetisation, however I believe that’s a temporary phase and we should be able to offset that given our business mix, in the interim.
On a macro level, infrastructure has been a challenge for us. We lack a composite facility of world class standards, like a global exhibition and say a convention center like some other countries do, to attract a larger MICE footfall. Yes, the infrastructure initiatives undertaken are noteworthy and we have good convention facilities in Noida, Hyderabad to quote an example, however the reason why we fail to attract MICE at the global level lies in our inability to see the larger picture and connect the dots as a part of a larger value chain. Having said that, on a micro level, with respect to Alibaug, infrastructure will be a challenge for us, as good connectivity by road is lacking during monsoons, which will affect business during the monsoons. However, work is going on in developing a four road corridor from Panvel to Wadkal which will put Alibaug within an hours drive from Mumbai.
We have a three point strategy – guests, revenues and costs. At the user level we will focus on engaging our guests and create unique experiences for them; on the revenue front we will focus on maximising yield from our market mix, and keep tight control on costs.
We are a weekend getaway hotel and therefore while the focus will be on maximising yield and revenue over the weekends, the strategy is to offer more value on other days and command a slightly higher price than what we currently do to maximise yield on weekdays. We have just completed renovation of one of our wings, which has the much sought after pool accessible rooms which will be sold at a premium. The room categorisation has also been changed to contribute to realise higher yields.
Taxes from the service industry form a significant chunk of the tax kitty. Taxes are levied on accommodation as well as F&B when you stay at a hotel, often with different tax levies on rooms and F&B. I feel it will help the industry contribute better if this is simplified and reduced.
– Santanu Guha Roy, General Manager, Radisson Blu Resort & Spa Alibaug
The year ahead
Pune city occupancy grew by 7.1 per cent from 2015 and witnessed 65 per cent occupancy for 2016. The outlook for 2017 is very positive due to the growth in the IT/ ITES sector, increased availability of office facilities and multiple projects lined up in the city like the Pune Metro and the Smart City project.
As Pune is on an expanding curve, business will tend to gravitate to respective micro segments based on location preferences. Pune has been an attractive MICE destination due to its competitive pricing and close proximity to Mumbai. However, the hotel growth in neighbouring cities like Nasik, Aurangbad, Mahabaleshwar, Lonavala, Lavasa is expected to dilute the MICE demand.
Pune has experienced a good demand from the manufacturing and IT/ ITES and business from these sectors would be the primary focus for next year. At Hilton, the book direct campaign drives booking through the hotel’s direct channels whereby guests get the lowest possible rate as part of the HHonors Loyalty Program. Another significant focus segment is weddings due to their positive impact on the overall revenue contribution.
Conrad Pune has set trends in the food and beverage landscape in Pune, with our pan-Asian fine dining restaurant Koji serving classic Japanese, Thai and Chinese receiving rave reviews and patronage locally and nationally. Another favourite is the Kabana, our poolside restaurant, that has become a favoured venue due to its surrounding landscape and greenery. Overall, the F&B have been a success story since the opening of the hotel over nine months ago and have sustained to becoming the most preferred dining destinations in the city. Pune has experienced an upward trend in staycation travel into the city and this has been advantageous for the hotel as well.
– Amit Midha, General Manager, Conrad Pune
The year ahead
We are optimistic about 2017. The year looks bullish for the hotel industry. The demand for quality hospitality products is growing and we are happy to be in that space. With the infrastructure improving and a lot of domestic flights shifting to the international airport, it augurs well for us, as we are just a few minutes away from the international hotel. The city hosts a lot of big events and exhibitions and it drives more traction. MICE sector per se is doing well and will surely impact the hotel industry positively. Hotel revenue will be maximising on these events.
Challenges are a part of any business. In fact the challenges offer a great opportunity, as you have to think out of the box to meet them. It takes out the best in you. One of the key challenges faced by the industry is the price sensitivity. Because of the heated competition, there is a challenge to maintain the ARRs. However we are very optimistic that we will be doing well, mostly considering the dynamic market scenario and growing transit business.
The tourism industry is at an all time high with better leisure and business prospects too for 2017. Rate sensitivity and several other exhibition destinations across the country will lead to a challenging situation for all city hotels in Mumbai. This will create a problem in maintaining the ARR for all city hotels in 2017.
Holiday Inn is a much trusted name India and abroad with more than 1155 hotels under its brand. This gives us a big advantage. People are very brand conscious and want to associate themselves with good brands. As we are part of IHG (Intercontinental Hotels Group), one of the largest hotel companies in the world, we have the advantage of brand recall and brand recognition.
For the year of 2017, we will be targeting new corporate accounts in the vicinity. Since we are a business hotel, the focus is to get business travellers as much as possible. Since we are an international chain, we shall be looking at increasing the global accounts too. We also have one of the best banqueting facilities in town.
Because of it we host a lot of events and conferences at Holiday Inn. We also have thriving business which comes from the wedding segment, which is growing in a big way. More and more consumers are booking four-five star hotels for their big day. In a city like Mumbai, the demand for quality product is always there. As per an industry report, the city’s demand for rooms is growing every year.
Another important scenario is that there is no new inventory which would be coming in for the year of 2017. This helps the industry, hence the hotels will have opportunities on the growing demand in the city and that is what we will be trying to capitalise on.
– Suraj Kumar Jha, General Manager, Holiday Inn Mumbai International Airport
The year ahead
2016 was a good year for Novotel Imagica Khopoli. We completed one year of operation in 2016 and have been faring well in terms of occupancy. The market response has exceeded our expectations by leaps and bounds. Our occupancy has been over 75 per cent in 2016. 2017 will be an eventful year for Novotel Imagica, as our new wing will be fully operational, adding another 171 rooms and suites to the current 116 rooms making it a total inventory of 287 rooms and suites. With distinct views of the theme park, pool, hills and more, the property will be known for its varied options. This increase in the room inventory will facilitate us to organise larger MICE, social and wedding events. Being the only hotel comprising of more than 200 rooms also gives us an edge over the others.
The hospitality sector is a dynamic industry; while the overall demand and supply dynamics are in line with historical trends, what was noticeable was the change in nature of demand and its segmentation. The growing trends for city dwellers to take short getaways, even staycations near their residences, have worked well in our favour. Internationally the challenge with theme park hotels has been the location; but in our case with proximity to Mumbai and Pune, and an expressway connecting us to both, it has been a boon, leading to constant engagement with travellers and tourists from the region.
The Indian hospitality industry today is seeing changes like never before. While demand and supply are the forces that drive all the industries, there are several factors that need to be taken care of such as positioning of the hotel, devising strategies based on the current needs and scenarios, etc. Nuances such as employee relations, guest relations, and receptivity to changing trends e.g. digitalisation for increased productivity are also essential to be on top of the game. We at Novotel Imagica recognise the current market dynamics and the needs of the guests.
Also, since the customers and guests have become more tech – savvy, we ensure the presence of our hotel across all platforms.
The business strategy for 2017 will be to focus more on leisure over the weekends as the year ahead has several long weekends, while concentrating on MICE and social events on weekdays. With a resort having 287 keys, it allows us to focus on long staying and local company guests. We also want to lay more emphasis on multi-function space and the crucial role it will play in attracting the customers and event planners.
Retaining our current levels of repeat business and developing further customer loyalty will be an important part of our forward strategy. There has been a steady increase in our ADR and RevPAR in 2016, however dynamic pricing is an area that will be paid attention to with changing trends and season demands. We also aim to majorly emphasise on driving bookings through our website and online channels. Khopoli has now become a year-round destination rather than seasonal. This has boosted revenues and positively impacted profitability. Novotel Imagica have established itself as a preferred getaway for adventure seekers, families and leisure travellers. We will continue to differentiate us from the others by offering comfortable and memorable stay to our guests, exciting F&B offerings, indoor and outdoor activities like rifle shooting, paintball, box cricket, aqua zorbing and more along with personalised services designed by our highly skilled and well trained staff.
The hospitality industry is undergoing an extensive transformation and technology has taken the front seat in the form of social media. We use social media platforms for guest engagement, which we understand leads to guest satisfaction and creates a long-term relationship. Some of our marketing objectives would be to communicate our strategic objectives to our target markets effectively, to accomplish our growth targets within the given time and budget and expand our markets and identify new markets for our hotel.
– Srinivas Srirangam, General Manager, Novotel Imagica Khopoli
The year ahead
We are all forecasting higher revenue in 2017, an increase in the number of domestic travellers and a few new projects in the pipeline would most definitely lead to more footfalls. Keeping in mind the reformation that is taking place in our economy, the market as a whole has become more cautious which is why it is important for the hospitality industry, particularly hotels, to emphasise more on their total revenue rather than just the room revenue or the food and beverage revenue.
Hotels have to keep their pricing strategies very dynamic while keeping a close watch on the overall pricing matrix. 2017 will see quite a few long weekends in comparison to 2016, which to an extent will affect business hotels like ours in terms of occupancy. I believe cost control is definitely one of the key challenges for 2017 followed by employee retention and recruitment of trained manpower.
I will focus on the overall market mix and few key areas like length of stay of our guests, segment wise trends and RevPar and internally build relevant strategies for each of these parameters.
As mentioned earlier, maintaining a good and balanced pricing strategy is also of utmost priority to ensure our hotels sustenance in this ever-competitive industry. Besides our core business strategy for 2017, we will also be giving importance to online reputation management and OTA reviews. With the digital boom, we will also be looking at leveraging social media platforms to drive footfalls.
– Subhabrata Roy, General Manager, Four Points by Sheraton Navi Mumbai
The year ahead
The domestic demand is expected to be strong with pickup in economic activity and increase in urban disposable incomes. FTAs are however expected to be weak during 2017, given the weak global economic outlook and heightened security concerns worldwide. The Pune market is growing with new projects starting every month and 2017 looks positive, with people considering Pune as a wedding destination as well. We expect a marginal increase in occupancy though the focus will be to increase the ADR.
With new inventory and luxury brands coming into Pune, it should help everyone to lift the rates. Though the key challenge would be to hold on to occupancy, along with the increase in rates.
The strategy would be to maintain occupancy levels with a substantial growth in ADR by maximising corporate yield during weekdays. Additionally, continue to explore MICE and wedding business during weekends. The focus will be to maintain an optimum balance between the two.
The hotel industry is sensitive to economic cycles, accentuated both by supply and demand. It has been in a state of flux, over the past nine years (FY2008-FY2016),—starting from the FY2008 peak to a trough in FY2010, a brief pickup in FY2011 and downhill till it bottomed out in FY2015-2016. After strong headwinds from an adverse demand environment and excess room inventory, the situation has improved over the past 12 months with the pace of room addition slowing down and domestic demand being supportive.
– Vishal Singh, General Manager, Hyatt Regency Pune
The year ahead
Sofitel Mumbai BKC is well known for being the beacon of French hospitality in India. We will continue to strive to push our potential around our four brand pillars of gastronomy, culture, design and wellbeing. As part of business strategy and marketing plans, Sofitel Mumbai BKC has measurable goals internally to achieve quality, impeccable service, intelligent marketing and a high ratio of repeat guests.
During the current calendar year, the country is expected to witness footfalls of nine million foreign tourists, thereby witnessing a growth of around 12 per cent with eight million visitors last year. By 2025, foreign tourist arrivals in India are expected to reach 15.3 million as per the World Tourism Organisation.
To cater to this huge demand, we expect several international brands to have openings around the country, creating healthy competition amongst luxury hotels. Sofitel Mumbai BKC is excited to be a part of this league and we believe that the single differentiating factor that will make a property stand out amongst the target group, is the ability to exceed guest expectations.
The luxury travel market is projected to reach US$ 14.7 billion in 2017 and is pegged to grow at 25 per cent year–on–year between 2016 and 2018. Given Sofitel’s unique positioning where luxury experiences and business meet in an elegant setting, we expect to see tremendous growth not just in occupancy, but also with our ADR.
We are constantly reinventing the Sofitel brand providing innovative, high-quality products and services for the benefit of our guests. Our business strategy is centered around our positioning and our brand pillars. In addition, the property also brings a strong design esthetic, not recently seen in city hotels.
We are also proud of an exciting new chapter for the AccorHotels Group as we recently announced the acquisition of FRHI Hotels & Resorts and its three prestigious luxury hotel brands: Raffles Hotels & Resorts, Fairmont Hotels & Resorts and Swissôtel Hotels & Resorts.
This historic milestone of welcoming into our family three remarkable brands has instantly positioned AccorHotels as a leading player in the global luxury hotel market and has significantly expanded the company’s footprint in North America, the world’s largest and most influential consumer market.
Sofitel Mumbai BKC is a unique address where buoyant business meets an elegant lifestyle in the heart of Mumbai. 302 guest rooms and suites, cutting-edge meeting spaces, the elite Club Millésime Business Lounge on the top-most floor, a wealth of innovative dining outlets, So SPA, So FIT, a serene open-air pool and its strategic location in the new financial centre of Mumbai make this luxurious hotel a haven for both business and leisure travellers.
Along with basic services, it caters to the luxury connoisseur who expects and appreciates quality and excellence. Sofitel Mumbai BKC offers a genuine experience of French ‘art de vivre’ and the best of local culture, coupled with warm Indian hospitality, sophistication and elegance. It currently ranks as number two on TripAdvisor out of 433 hotels in Mumbai – which is a remarkable achievement as this is the voice of every guest who has stayed with us and it truly reflects the high level of quality standards that Sofitel Mumbai BKC is so well-known for.
The hospitality trend in India is changing rapidly and the players who will succeed eventually are the ones who manage to sufficiently differentiate themselves with unique experiences and who manage to touch the hearts of the guests by exceeding their expectations in terms of luxury and memorability. Over the years, Sofitel Mumbai BKC has become a game-changer in its segment and guests have shared with us that this hotel is their benchmark of hospitality in India.
– Biswajit Chakraborty, General Manager, Sofitel Mumbai BKC
The year ahead
The coming year looks good for business as we are placed with healthy rate of confirmed room nights on books for FY 16-17. Last year has shown growth for the overall market, though the occupancy level has been persistent, the ARR has seen a steady increase of 10 per cent YOY for us. The rising middle class and increasing disposable incomes has continued to support the growth of domestic and outbound travel for the market. Total outbound trips have increased by 8.7 per cent in 2015 and it continues. Inbound tourist volume grew at a Compound Annual Growth Rate of 6.8 per cent during 2010-15 and would continue further. Foreign Tourist Arrivals in India increased 11.8 per cent year-on-year to 670,000 tourists in August 2016, while Foreign Exchange Earnings from tourism increased 13.1 per cent year-on-year to `12,903 crore. Tourist arrivals in India on e-Tourist Visa grew by 196.6 per cent year on year to 66,097 tourists in August 2016, attributable to the introduction of e-Tourist Visa for 150 countries as against the earlier coverage of 113 countries, according to data from the ministry of tourism. This is a very beneficial indication to the market and we would certainly capitalise on the opportunity.
The dynamic nature of business is one factor that always brings challenges in forecasting. With the introduction of new hotels, demand supply gap is getting reduced and this may adversely affect the room tariff. However, as this was a factor for last year and still we were able to surpass the year on year industry growth rate, hence we are confident to continue the trend.
Maximising market penetration with higher guest satisfaction level is going to be the strategy for this year. The current growing segment is the advancement of the middle class spending capacity which makes the trade more price sensitive with customers seeking value for money. Our focus to deliver unparalleled and unmatched guest services coupled with best offerings to this segment would be an exciting way forward for us.
Through the shift of the terminal for domestic carriers can lead to the change in market mix, this will result in increase in average length of stay for us and thus we may enjoy better returns. OTAs would certainly act as a game changer, especially with the entry of some global travel portals such as the Ctrip.Com in collaboration with MakeMyTrip, etc, due to their reach across the overall bigger economies on wide scale. This would help attract inbound from bigger markets such as China and the US.
– Varun Sahani, General Manager, The Orchid Mumbai
The year ahead
We foresee 2017 to be a buoyant year in terms of growth in business volume. The market sentiment is positive overall, on account of which we anticipate the demand to surge up by 10 per cent – 12 per cent. No incremental room inventories in the city of Mumbai would help to further grow occupancies of the existing hotels.
Acceptance of technology is on a steep upwards climb. From a hotelier’s perspective, it would deem that properties will need to keep up with the exponential growth in digital marketing and social media to ensure that they thoughtfully utilise technology to improve operations and guest satisfaction. This year, we believe, social media will become an even more important tool for hotels to capture the attention of majority of audiences who are now increasingly reliant on digital media.
At a time when the market is looking immensely bullish, the acquisition of Starwood Hotels & Resorts Worldwide by Marriott International has not only created the world’s largest hotel company with the most comprehensive portfolio of brands, but has also led to a market offering a plethora of growth opportunities.
Hospitality in Mumbai and in the country will continue to boom. Mumbai being the economic hub of the country attracts business travellers from all across the world and within the nation. The influx of business from various sectors such as IT, automobile, pharmaceuticals and finance has largely contributed to the expansion of the hospitality sector. There is a market for all players, however ours is a price sensitive market and the end user is spoilt for choices. Therefore, all guests; the astute and the experimental, will continue to make their choices based on the brand value, service, quality and the value proportions offered.
Having said that, our challenge will be to offer newer food & beverage offerings, undertake detailed research to innovate aggressively and offer deeper levels of personalised service.
Sourcing high quality resources with befitting skills and competencies will continue to be a challenge. As a result we estimate robust emphasis on training and development. Rigorous training, especially at larger hotels that incur high manning costs, will be imperative.
Still going through its ramp-up phase, JW Marriott Mumbai Sahar will continue to grow business across all its customer segments; corporate and MICE, with greater focus on weddings this year. The weddings market too is pacing well and we will look to capitalise on weddings and banquets.
The hotels overall growth strategy will optimally use as well as drive business from all e-channels including OTAs and meta sites such as TripAdvisor. This, however, will not take away from the priority of the property to encourage direct bookings. The revenue and the marketing teams will work in tandem with one another to achieve incremental ‘hotel-direct’ bookings.
With over 30 per cent of the hotel’s talent pool being women, the hotel will retain a healthy male to female human resources ratio and encourage women in leadership.
With the coming of age of technology, consumers have become aware, intelligent and agile. Guests rarely appreciate standardised, homogenous experiences. The guest will now seek profound insights into destination-specific cuisine that is able to showcase local art and talent.
Changes in hospitality design are frequent and on – going too. Providing our guests’ services suitable to business along with leisure will be of utmost importance.
– Saeid Heidari, General Manager, JW Marriott Mumbai Sahar
The year ahead
The year ahead looks very bullish. We are very optimistic and are really looking forward to how the year shapes up. 2016 has been a good year indeed. But we expect 2017 to be even better for the hospitality industry. In terms of revenue for rooms we are expecting a growth of 8-9 per cent vis-à-vis last year. Food and beverage industry is also expected to have a growth of 10-12 per cent.
The pressure keeps increasing as more number of hotels are launched every year. With increased room inventory there will be an even more cut-throat competition which will eventually lead to price wars. With numerous multi-national hotel chains entering the market, the standalone hotel brands will feel the pressure to maintain a higher ARR. With such increase in supply of room inventory it becomes difficult to maintain rate parity leading to under-cuts and cannibalising the hotel’s revenue. The only way to ensure that you standout from your competition is by making your offerings unique as compared to other competitors. Guests today are looking out for something more than the usual. They are no more interested in a typical five-star hotel. They are looking at what more can the hotel offer to make them feel special.
Another challenge faced by the industry is shortage of skilled staff. Also, the attrition rate continues to be high in this labour intensive industry. It is extremely important to retain your staff and the only way to achieve this is by ensuring high levels of employee satisfaction. Today it’s not just about remuneration. In a fast paced city like Mumbai, it is crucial to allow your employees to have a healthy work-life balance. One also needs to have proper career-growth plans for each employee. Counseling at different levels helps resolve employee issues thus making them feel comfortable. It also helps to gauge an employee’s expectations from a company and then create a growth plan that matches the expectations. If done correctly, this will help boost employee morale and make him/ her feel motivated towards his/ her job.
Our business strategy would be to focus on our brand positioning. Waterstones Hotel is a business boutique hotel and that itself is our USP. There are not many quality boutique hotels in Mumbai and that sets us apart from our competition.
Customisation and flexibility in terms of offerings is the key to success in today’s world. The unique design of Waterstones allows us to customise our offerings to a large extent. We have different packages based on specific requirements of the guests. For example, a corporate guest who visits Waterstones Hotel for a business meeting/ seminar may not really have the time to enjoy the leisure facilities like the swimming pool, gymnasium, movie lounge, tennis courts, etc. In such a case we offer a no-frill package which becomes economically viable for our corporate guests. On the other hand, we offer a whole range of facilities including spa treatments to our leisure guests who visit us for a staycation. Our flexibility in terms of offerings ensures that the guests pay only for what they consume thus making it a value for money proposition.
We also pay a lot of attention to our service quality and standards. The beauty of having only 99 rooms is that we can offer personalised attention to each of our guests thus making them feel special and welcomed. Today it’s all about the happy memories that you are able to create.
It is important to mention the things that the hospitality industry has been eagerly waiting for: The most important being the implementation of GST which is expected this year. Hospitality has been an over-taxed segment of the economy and is paying higher taxes at various levels. Hospitality is one of the major contributors for tourism sector which has been one of the biggest drivers of the economy. Uniform taxation will not just help hoteliers but also the consumers who will end up paying lower taxes on services they consume. The second most important thing is the single license. Currently there are multiple licenses that a hotel or a restaurant has to source before it starts operating. This makes it extremely difficult for budding hoteliers/ entrepreneurs to setup businesses in India. A single license window will help ease the process and we will see a lot more businessman entering the hospitality industry.
The introduction of GST and single-tax window will definitely take India’s ranking higher in ease of doing business.
– Kapil Kapoor, General Manager, Waterstones Hotel, Mumbai
The year ahead
2017 should prove to be far better than 2016, with the pace of uplift one saw last year, not just in terms of economy but also in our industry, with the growth in RevPAR and occupancies across all major markets. This trend should also continue into 2017.
Demonetisation, the biggest impact of 2016 has a long term promise of cashless transactions. Our businesses and the level at which we operate are semi-insulated, in that it is almost cashless and digital, especially with our Indian economy moving toward rapid digitalisation. Further, there is an improved sentiment about India making vast strides economically under the leadership of Prime
India, today with a combination of rapid digital growth and having a huge population of millennials in the country is proving to have a great propensity for spending and consumption.
The ease of doing business index is rising rapidly under the initiatives announced by the government – The Clean India movement, the demonetisation and the fact that positive infrastructure announcements are being made – all of that will lead to a boost in our economy, which would further lead to a boost in foreign attention and engagement.
The country, with a reputational enhancement after all these initiatives, would become a bigger and better market globally for investments and foreign FTI. This, I believe would also increase the movement of business travellers into India.
Eventually, 2017 promises to be the stabilising year for our business and our industry as we will also see the positive impact of e-visas and visa-on-arrival initiated last year – so whether it is a leisure tourist or MICE or destination weddings or individual travelers or even conferencing, 2017 looks to be better year than 2016.
I don’t see any major worries and concerns. India is now moving away from just being market dependent on global travellers.
The domestic market is now one of the fastest growing domestic markets in the world with Indians having the right propensity and exposure to travel and spend.
Domestic carriers have compounded this fact with an air passenger traffic growth of over 20 per cent. Some of our most luxurious and upmarket resorts – like the W Goa, our most recent launch is already doing a 65 per cent occupancy in the first month within 30 days of opening.
As a matter of fact, without a formal announcement, the hotel was getting a lot of queries and bookings at a high price point from the domestic market, which tells us that the Indian domestic resort and luxury market has evolved and our dependence on just the FTOs and foreign travel has somewhat reduced in our leisure destinations. Overall, for both food and beverage as well room business, 2017 pans out to be a very promising year.
– Anuraag Bhatnagar, Multi-property Vice President, Luxury, India, Marriott International & General Manager, The St Regis Mumbai
The year ahead
The hospitality industry continues to be one of the fastest-growing and most vibrant sectors in India. In the coming year, with a robust inflow of foreign tourists, growth in first time travellers and an increase in internal tourism, we expect to witness a substantial growth in demand for room inventory. F&B and banqueting will continue to be key contributors to revenue and cash flows. However, the MICE and weddings segment is expected to play a major role in driving the growth and generating demand for rooms.
This year, we also expect a surge in domestic leisure demand. The need and demand for ‘short-breaks’ and ‘staycations’ will grow, creating development potential at locations in proximity to big cities. Destination weddings, across multiple price points, is also expected to see a demand surge this year with the improvement in infrastructure and connectivity within the country.
With the nature of competition in this sector also changing, it will become important for hospitality players to proactively and effectively respond to evolving challenges around customer and market expectations. Currently, new business models are emerging to meet the needs of the evolving consumers, which might pose significant challenges to traditional hospitality players.
In the coming year, use of technology is going to be a major game changer for the hotel industry as today’s traveller leans heavily on technology during all stages of the journey. We, at ITC Maratha, would look at further strengthening our bond with our existing guests by optimal utilisation of this medium at every touchpoint, thus ensuring a WOW at every moment of truth.
Also, the other challenge we foresee in the coming year would be attracting and retaining the new age millennials, who are predicted to set the travel trends in the country. These individuals are driven less by brand loyalty and more by the search for novelty. Hence, we plan to draw this segment with increased levels of personalisation.
At ITC Maratha, we are looking at successfully tapping into the growing segment of travellers by focusing on new business dynamics and converging it with the endeavour to create planet positive experiences under our guiding principle of ‘Responsible Luxury’. The property has also taken steps to create newer markets and broadening its clientele base. This forward strategy will not only help ITC Maratha to stay ahead of competition but also maintain a positive momentum despite the volatility created in the market due to a sudden surge in the number of new hotels launched by major players within the city.
In the coming year, along with the focus on external guests, equal priority will also be given on nurturing our human resources who are the prime custodians of creating a positive experience for our guests. We believe that in order to maintain this positive growth, it is important for us to focus on the well-being and training of such talent.
– Kuldeep Bhartee, Area Manager (West) – ITC Hotels & General Manager, ITC Maratha
The year ahead
I feel that the hotel industry in India has a very positive face in the year 2017. Global economy is in a revival stage. Also, with the government’s efforts on visa on arrival we will see more foreign traveller arrivals. Increased tourist movement in the country (inbound as well as domestic travel) and corporate profits will help filling in the rooms. Millennials are now having a close affinity for weekend travel and quick short vacations, this will further fuel up the occupancies. Considering all these factors atleast the top line will not have a big problem.
For me there would be three critical challenges – it is not something that cannot be managed, tactful management can easily help us overcome them.
- Retaining quality and shortage of skilled employees: Unattractive wage packages is the biggest reason – an average hotel spends 25 per cent of their revenues on labour and allied costs but the turnover in the industry is as high at 31 per cent.
- Social media: Transparency of the social media will highlight every positive and negative or for that matter every inconsistency. It easily forms a quick and efficient communication channel between the guest and the hotel. Challenge is to accept and positively embrace the power of social media rather than fight against it.
- Technology: The change of customer segment that the hospitality industry is witnessing has resulted in very diverse needs. The new customer segment expects to be connected all the times. This means hotels need to have satisfactory Wi-Fi all times at all places. Probably having the Wi-Fi only at the conference rooms and rooms is not sufficient. Even restaurants need to have free Wi-Fi. In many cases ‘free Wi-Fi’ has helped accommodate a new customer segment!
In case of hotels having a loyalty card programme, customers do not want to carry the conventional paper vouchers which can be redeemed, they want e-vouchers which can be transferred electronically and the entire process is hassle free.
Over the last few years technology has changed and changing further, these days guests would want to be able to make reservations for restaurants through mobile technology and avoid the entire process of calling and booking at the hostess desk.
It is well known that the hotel can have the best of the product and most amazing packages catering to every segment however if these packages are not distributed through correct channels they don’t reach the target customers. Hence we would be initiating our app as it is a good way to reach leisure as well as business travellers. We have a strong repeat clientele hence the app gives them an easy reason to eliminate all their hotel search or through an aggregator website and book directly with the hotel. This will also help us becoming personalised travel planners to many. Today’s travellers expect immediate, one stop shop travel experiences.
Many hotel brands are now targeting the millennial travellers: we are all aware that it is these travellers who like and believe in having quick small frequent gateways. My hotel is designed and meant for such guests. To suit their needs have enhanced certain services – by adding a new gym and re launching the spa – Bodyscape. We are currently in the process on adding few more services like segways, adventure sports and all-terrain vehicles in the property. These activities will appeal to guests of every age. I am sure these new services will help build a better brand loyalty.
– Satyajit Kotwal, General Manager, The Resort Mumbai
(All interviews by Sudipta Dev)