Each year brings with it a wave of opportunities and disappointments. Industry spokespersons believe that 2018 has set the pace for growth for the coming year, with occupancies and ARRs expected to rise. We bring to you their point of view on what drives this growth.
Anupriya Bishnoi
Foreign tourist arrivals in India are expected to reach 20 million by 2020, a benchmark that mirrors the sizeable growth of India’s hospitality industry. With an influx of leading global hospitality chains and a surging segment of home-grown brands, the country is well-equipped to cater to travellers of all kinds.
Rahul Kanungo
General Manager
The Fern Hotel, Belagavi
A promising 2019
As of now, 2019 looks promising as the economy is being stabilised and the GDP for the year is quite close to the projected GDP. This is an indication of a good year economically. Considering various factors, it is expected that ARR and occupancies will rise, both expected to increase from four to eight per cent based on geographical locations.
Industries to fare well
The South Indian market is poised for a steady growth in the coming year with a number of large-scale projects to be launched. Infrastructure, pharmaceuticals, hospitality, and other service-oriented industries are expected to fare well in the coming year. Tourism will surely get a boost with betterment of the Indian economy and there may also be relaxation in norms, it being a year of elections.
Pushing for direct bookings
The hotel adopts various measures to encourage direct bookings, including conversion of bookings materialised through OTAs, an efficient reservation system with ease of accessibility, and direct marketing.
Akash Gupta
General Manager
Gokulam Grand Hotel and Spa
ADR to rise, but marginally
The impact of demonetisation and GST was felt during 2017-18. The hospitality industry is now recovering from it and has started to gain lost ground. There could be a marginal increase in ADR between four and five per cent, while some hotels would play it safe and could stick to a no-ADR-growth policy. We feel that our hotel can achieve a four to five per cent growth in ADR, while occupancy is expected to grow between seven and eight per cent.
Tech to take centre stage
By the year 2020, the traveller will be highly sophisticated and technology-driven, with a strong expectation of superior service levels. The use of mobiles and digitalisation would be even more advanced and human interaction is bound to decrease year-on-year. Guests will be more demanding and expect best-in-class hospitality from all quarters, with the latest technology readily available to serve their needs.
Revamping the website
In recent times, technology has revolutionised how services are offered to guests. Technology will continue to be the way forward and we would ensure necessary steps are taken to attract bookings directly from our website. Making the website more interactive and lively with deals being offered that are better than those being provided by OTAs will be an initiative in this direction. An easy booking mechanism with no hidden cost and 100 per cent refund management in case of cancellation would be a huge boost for conversion. We are also looking to making the hotel’s website mobile-friendly for convenient transactions. Lastly, we will soon start showcasing testimonials on our website that would enable potential guests to make bookings.
Tarun Seth
General Manager
Hyatt Regency Chennai
ARRs to rise, not occupancy
We are expecting a five to seven per cent increase in ARRs, while occupancy may remain at the same level as it was this year. The occupancy stagnation is primarily due to the sports segment as they seem to have moved away from the city due to various reasons.
Value add-ons to be game changer
South India is a very competitive market in terms of pricing. Value add-ons to the rate will be expected by corporate travellers in the coming year. The online segment will continue to lead and will see a double-digit growth over 2018.
World of Hyatt builds customer base
Our global loyalty programme, World of Hyatt, continues to attract more and more guests to book directly through us. Other benefits include special offers for members, which entice our guests to book through us.
Arindam Sarkar
General Manager
The Fern Residency, Yeshwanthpur
Steady growth expected
With more international brands entering the market in 2019, competition will only get bigger and better. We have achieved a steady growth in 2018; from April to September, we attained a growth of 10 per cent in occupancy, 7 per cent in ARR, and 21 per cent in total revenue against the same period last year. If this trend continues, we can expect a significant growth in 2019 and I believe that our ARR and occupancy will also go up.
Serving the millennials
Nowadays, in South India or perhaps anywhere in the world, guests are very clear about their choices. Almost 50 per cent of travellers are millennials who travel often, so hotels try to please them through easy check-in and check-out facilities, as well as gourmet dining experiences at reasonable prices. In return, millennials promote the business on social media through websites/Apps such as TripAdvisor and Zomato. Hotels also need to ensure that their offerings are up to date and user-friendly, supporting tech-savvy guests who are comfortable using Apps or mobile websites.
Eco-friendly practices are also becoming a trend, and in our hotel, we encourage our guests to participate actively to make the environment a better place to live in.
Perks for loyal customers
Since the hotel does well across all online channels, we are targeting the same to convert into our loyal customers. We are also using other direct marketing tools like discount vouchers to encourage direct bookings.
Faiz Alam Ansari
General Manager
Sheraton Grand Bengaluru Whitefield Hotel and Convention Center
Ideal for corporates
The travel and tourism industry has huge growth potential, not just in Bengaluru but across India. Given the booming technology scene in Bengaluru, it is one of the world’s most dynamic cities with exceptional economic growth and strong business activity. It is also very buoyant as a market and additionally, the constant rise in number of business travellers visiting the city has led to the hospitality sector progressing at a very fast pace. Sheraton Grand Bengaluru Whitefield Hotel and Convention Center, being conveniently located in the heart of Bengaluru’s IT hub, caters essentially to corporate travellers who mix business and leisure with ease.
Maintaining Gross Operating Profit
One of the biggest challenges we faced was ensuring Gross Operating Profit in the first month after the launch. Being the city’s largest premium meeting and conference destination, generating MiCE business within a short time frame was difficult and we had to monitor the Gross Operating Profit very closely.
What we did was, we implemented a variety of strategic marketing and advertising activities largely encompassing digital platforms and mainstream advertisements to overcome the obstacles faced in the launch phase. One of the unique strategies that we implemented was installation of our Sheraton Signature Bed at Bengaluru airport. It essentially helped us attain a remarkable 40 per cent Gross Operating Profit in the first six months of operations without request for proposals. Additionally, guest satisfaction and persistent innovation were some of the strategies we consistently adopted to excel. Sheraton Grand Bengaluru Whitefield Hotel and Convention Center looks beyond competition and focuses on what really works to reign in the hospitality sector.
Reuben Kataria
General Manager
JW Marriott Hotel Bengaluru
ARR and occupancy may suffer
We have had a very healthy 2018 so far, and are looking at an increase in ARR with occupancy levels being stable at approximately 80 per cent throughout the year. However, with an increase in supply of rooms, we expect the next year to see pressures on ARRs and occupancy.
Industrial growth to benefit hotels
The three southern states of Karnataka, Telangana, and Kerala are collectively known for IT, infrastructure, defense, and leisure travel among other revenue-generating avenues. With the upcoming technology parks in these states, investment is expected to increase with new growth in business opportunities. This will have a positive impact on hospitality sector.
All for the customer
At Marriott International, investment in direct business channels is a key focus area. The initiatives are taken at the Asia Pacific level to promote and incentivise benefits towards end-customers, along with a look-no-further policy to give our loyal customers real benefits in order to remove multiple layers of booking channels.
Manish Dayya
General Manager
Novotel Hyderabad Convention Centre Hotel and Hyderabad International Convention Centre
2019 to be even better
This year, we hosted multiple key events in the city. In addition, a focus on MiCE, weddings, corporates, and FITs also enabled us to maintain good occupancy throughout the year.
We are all geared up for 2019 with a refurbished look and a fresh experience for our guests. Increased MiCE and business travel, rise in global events and international associations, and growth of start-ups is only going to add to the demand. We expect that we will achieve at least a seven to 10 per cent increase in growth over this year and with the current progression and some prominent events in the pipeline, we expect 2019 to be a much stronger year for our property.
More opportunities to come
Considering India’s steady y-o-y growth in the MiCE market, we expect continued and increased demand from international MiCE organisers. For the South Indian market, one can expect to see continued growth from various industries such as IT, pharmaceuticals and automobiles, which will primarily drive MiCE. With increased travel and meeting requirements of these industries, the southern region will continue to enjoy increased opportunities to cater to them.
Also, in years to come, the scale of such events and dependency on highly advanced technology will increase, giving us an edge over others as we are already well-equipped to cater to this rise in demand for conference venues and banquets. We also expect weddings to be a key driver of MiCE in South India, as there has been a shift in demand for events at hotels and convention centres.
Online and offline get equal attention
Digitalisation has invariably reduced the gap between the traveller and the hotel. It provides guests convenience and allows hotels to connect with them and engage them through multiple channels. As a hotel, we continuously work towards increasing our visibility and be present on all relevant platforms, including third party travel partners. Besides the usual channels, our strong loyalty network – Le Club by AccorHotels – further drives direct bookings especially with individual travellers and MiCE planners. Another avenue that propels direct bookings is the AccorHotels mobile App, an easy-to-use and guest-friendly platform where guests can take advantage of special offers.
With our aggressive 360-degree outreach plan, we have an equal focus on online as well as offline channels. The personal guest connect, locally negotiated rates, brand associations, national and international tradeshows, fairs and exhibitions, all contribute to our direct bookings. With multimedia campaigns and a resilient presence across platforms, Novotel Hyderabad Convention Centre and Hyderabad International Convention Centre continue to make a mark as the most sought-after destination for all business and leisure travel in Hyderabad.
Suman Gahlot
General Manager
Aloft New Delhi Aerocity
A successful first year
Being in our first year of operations, the prime focus was on ensuring exceptional guest experience at aggressive pricing. We have been able to successfully achieve the same. Firm beginnings helped steady positioning of this new brand’s entry to the capital city. The year 2018 was a great one for Aerocity; every hotel had its fair share, leading to a steady increase in ARR.
Overcoming challenges
Guests perceived us to be a budget, upscale property, but we are a full-service five-star hotel and so, they were delighted with the scale and level of service we offered. Finding the right people to run the hotel was a bit of a challenge, but the mix of talent is a delight to see and work with. Being a relatively new brand of Marriott in this region does pose a challenge somewhere.
Aggressive marketing as well as a perfect mix of traditional and contemporary marketing strategies created a niche space amongst the decision-making millennials that the brand targets. Internal Marriott talent hiring also went a long way in establishing the brand’s ethos and offerings for the capital city to accept us with open arms. Running efficient and strategic marketing campaigns towards target clientele and for brand establishment via print, digital or social media campaigns; and participating in all prominent Marriott roadshows and undertaking extensive sales blitz for established and potential business opportunities helped us overcome challenges we faced.
Vinod Kumar
Director of Rooms
Bengaluru Marriott Hotel Whitefield
Transient and group on the rise
The year 2018 has been great in terms of transient and group segments, which have helped drive a growth in ADR of two per cent as compared to last year. While growth in transient ADR was primarily supported by a three per cent increase in corporate ADR, retail returned a 1.5 per cent growth as compared to 2017.
While city supply increased by 10.3 per cent for 2018 (upper upscale segment contributed 42 per cent of the growth in supply followed by the luxury segment at 21 per cent), during YTD September 2018, Bengaluru grew four per cent in RevPAR driven by ADR growth of seven per cent. Occupancy dropped by 2.9 per cent; ADR growth was led by Whitefield and ORR sub-market at 14.3 per cent compared to last year. Excluding Marriott properties, the city RevPAR growth came down to 3.2 per cent as against Marriott properties at 7.5 per cent.
Building a base
The market witnessed a 12.6 per cent increase in branded supply with opening of The Den and Sheraton Whitefield. Ramp up of these properties has led to a share shift, especially in the group and MiCE segments, resulting in a 5.4 per cent drop as opposed to the previous year in the group volumes for the property.
A primary mitigation plan to overcome the added supply was to safeguard our top corporate accounts by offering open availability to build base due to lost group share. This resulted in a three per cent volume increase in the transient segment.
Chitra Awasthi
Director of Sales & Marketing
JW Marriott Mussoorie Walnut Grove Resort & Spa
Not much of a change
We accomplished a marginal growth in terms of ARR in 2018. With the GST implementation there were some initial hiccups, but now there is a certain level of stability in the market. There has been slight growth in occupancy levels, but overall, the trends have been the same as compared to last year.
ARR growth sacrificed
For a better RevPAR, we had to drive the occupancy of the hotel, but ARR growth had to be sacrificed. In order to overcome the challenge, we introduced multiple seasonal packages, explored collaborations with travel partners, and increased new business segments amongst other numerous measures initiated.
