Bengaluru as a hospitality market
The market is very interesting in Bengaluru. It is more subdivided than any other city, in terms of micro markets, primarily because of its geographical location and local traffic situation. So when we talk in terms of inventory of Bengaluru city as a whole, the city has definitely seen some oversupply with a lot of new hotels coming up. But if you talk about specific market places like Whitefield for example, there has been an increase in the five-star luxury space by almost 100 per cent in the last year because of the Sheraton Grand and The Den coming in the picture, but the demand also has been equally robust.
Certain reports show that the market has grown by almost 19 per cent last year in Whitefield micro market which has more-or-less absorbed the additional inventory. We don’t see any fresh inventory coming in at least in the next three years.
Bengaluru is also very dynamic when it comes to commercial space. We’ve seen a lot of international companies expressing interest in enhancing their capacities, to name a few like TCS and Mashreq. So looking at the way the commercial space availability exists in various submarkets and the inventory of the hotels, we see that they are evenly balanced, and that we are poised for a robust growth, both in ADRs and occupancies in the years to come. The inventory which has come in will definitely be absorbed in the coming 24 months and the added inventory which will come up in separate micro markets like Devanahalli or Palace Grounds or on the Koramangla side of the city definitely have other business avenues to absorb that.
USP of The Den Bengaluru
When we were trying to look for locations in India for setting up The Den, we in fact looked at all the cities across India including Ahmedabad, Chandigarh, Mumbai, Chennai, Hyderabad, Delhi, etc. The key reason for choosing Bengaluru was the availability of the right real estate at the right price – it’s a 100 per cent FDI project where we also own the land. Secondly, it was the growth potential of various cities. Bengaluru and primarily Whitefield was already in place. So Bengaluru was more of a fail safe investment where we knew that success is inevitable. The city is also an incubator of startups and most brands in manufacturing or hospitality or technology set up their India base from or around here. So we thought it is wise to set up here. We are a true blue hospitality company as we own and operate our assets, so we are open to setting up anywhere where the market exists and the returns exist. Our growth will be primarily through acquisition because we feel that is the right way to grow faster. Then we renovate and rebrand the property as a Den hotel.
This property has brought many firsts to India. We have a 70 seater step down auditorium, one of the first in the country and a small cinema inside the hotel to occupy the guests after work hours because to keep the single business traveller engaged after work hours especially in Whitefield is not an easy job. Our brand has four main ethos – Eat, Work, Sleep, Play. We are a tech savvy hotel so we have incorporated virtual reality even in our game room. The whole idea is to create an ecosystem where people love the hotel. Ours is not a standard hotel, we want to create a homely feeling.
We also have our own spa brand called Sanctuary with a lot of focus on Nature. Like in summers we use scrubs that are based on citrus fruits. In winters it is avacado. We try to be as organic as possible. We have 15000 sq ft of indoor and 15000 sq ft of outdoor banqueting space. The hotel is very successful for corporate events and conferences, and we are tapping social events, weddings and pre-wedding events now for which we see a decent amount of demand. It has a lot to do with the decor and the warmth of the property. Banqueting/events/ catering is one of the mainstream revenues of any successful hotel today and so it is for us. We are much more popular for our F&B than any other hotel in Whitefield. Room revenue and F&B revenue is almost a 50:50 business mix, unlike earlier where it was a 70:30 ratio. We have seen that as room revenue is increasing so also the footfall in F&B has increased dramatically. We see lot of local clientele who like to come and try our cuisine. Especially at our rooftop restaurant Layla which is one of its kind. a true blue Mediterranean restaurant.
As for attrition, we are a new property so in the beginning it was 33 to 34 per cent but now we are seeing at levelling out at the market attrition levels of around 25 per cent. Today if an associate stays with you for even four years especially at the base level where 80 per cent of the team members are, it is an achievement. We have a strong HR policy. We have people who have worked for 50 years in the company in Israel. Most employees are on the payroll unlike other companies that use contractual labour. This permanency gives employees a sense of security and belonging. We are a good training ground.
My Management Mantra
I believe in simplicity. Making life and operations as clutterfree, as easy and as simple as possible. And it starts from my worktable where I just have my laptop. I like to practise management by objective (mbo). I like to walk around, be with my team members and my customers (I call them my stakeholders) greeting them as they check in. Stakeholders’ satisfaction at every stage that is my goal. I want to be with my team when they need me the most and where they need me the most, not mere lip service. Once the team realises this, they rally behind you as they see the leader is leading by example.