Six Things The Indian Hospitality Industry Would Have Done Differently
Most Indian hotel owners are over-awed by the established brands and would willingly take decisions that are not in their own favour just because the brand says something
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When I returned with a hotel degree from Ecole Hoteliere de Lausanne, Switzerland, I had some definite ideas on how to open a brand new, luxury hotel in Kolkata. A brand that can break away from most hoteliering clichés and cater to the outstanding possibilities of hi-tech fixtures and wacky designs of public spaces, as seen in the hotels around the world.
The impact of creativity and innovation within the hospitality industry knows no bounds. In the current economic climate, hotels and restaurants alike generate, disseminate and use innovation in order to break all of the prevailing records. Therefore, major industry players are now seeking to strategically deploy and optimise their capital investments within the hospitality sector. There are many who seek professional guidance in the growing global industries. Listed below are the six most important features that I wish our industry did differently:
1. Over-specified hotels
Most Indian chains are over-specified as compared to the brand standards. The same brand in its home country will be a much less fancy hotel as compared to its Indian outpost. This leads to the per-key cost going up for no reason, and then leads to owners wanting a higher rate, which leads to lower occupancy. This has its roots in the motivation of many hoteliers preference for “return on ego,” rather than return on equity while planning and building the hotel. The illusion of the higher rate also changes the service standards of the hotel. For example, India is perhaps the only place where a Holiday Inn Express does not only have a restaurant, but it has room service, too. And you know what? They might even have a service trolley to do it.
2. Not be over-awed by brands, specifications, amenity creep and unknown Western brands
Most Indian hotel owners are over-awed by the established brands and would willingly take decisions that are not in their own favour just because the brand says something. What’s more surprising is that some of these brands are not even known in our country at all. Imagine paying someone for a brand, and then paying to build that brand!
3. Not allow OTAs to eat our lunch
Why are the hotels too dependent on OTAs for business opportunities? The OTAs charge 12-15% commission from a hotel, which means, for a 50-room hotel, about 15 rooms are virtually owned by the OTA. No doubt, OTAs are a great tool if used well, but if they are your only channel, then the “T” in OTA could very well stand for “trouble.”
4. Knowing that the budget is about value, not about price
Most entrepreneurs in various sectors have tried and failed at offering just cheap rates and expecting to do well. While I agree that hotel room nights are a perishable commodity and you need to monetise them, doing so at an unprofitable price simply trains the potential guest to get an unreasonable deal. Also, it’s about value, not solely about price. Some aggregators may sell rooms at Rs 999, but they may not even know what they are selling.
5. Learning that there is a market beyond tier 1 cities – Polo Max Connect
When Lehman Brothers went bankrupt, the idea of real estate in tier-2 cities started gaining currency. Since then, the hotels have a default component of real estate, which is definitely the right way to go. For instance, Allahabad has ample market space. Most of the hotels are known as Plaza, Royal or Deluxe. Also, the smaller cities have a growing mass affluent population thus leading to higher sales of volume of FMCG, small durables and even financial products. All these sectors are generators of visitation. Though at times, this is taken to a level that is morbidly out of tune with market realties.
6. Hotels are a micro business, not macro
As a country we lack hotel rooms and the total number of hotel rooms in India is less than that of Bangkok. However, what most people forget is that hotels are a micro market-specific business. So, don’t look at the Mumbai hotel market, but instead look at the Santa Cruz-Bandra hotel market. It doesn’t matter if Bangkok has more rooms; see if the neighbourhood is oversupplied with unbearable hotel rooms from key demand generators.
Deval Tibrewalla is the CEO and Director of Polo Towers Group. A graduate from the prestigious Ecole Hoteliere de Lausanne, Switzerland, Tibrewalla has worked in the hospitality value chain from housekeeping and cafe operations to corporate development and new projects for almost a decade. Tibrewalla is a member of the Kolkata Chapter in the Entrepreneurs’ Organization.
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