Home / ANALYSIS / Hospitality Trends / Convenient, lucrative or wasted space

Five star hotels present a ready market of high end footfalls.

Judicious use of space within a hotel property remains key to maximising revenue and has been subject to many debates. Hotelier India takes a look at retail in hotels and whether it is seen as a money-maker today.

With average stay on the decline as business guests hop between cities overnight, having shop owners rent space at your property obviously allows your time-strapped guests the convenience of shopping within the hotel’s comfortable radius.

However, does the guest really take notice of the convenience offerred by in-house retail or would s/he rather go shopping downtown? With F&B gaining ground in our revenue models, having a guest visit the property to shop and then grab an afternoon cuppa, a glass of bubbly or a snack is a sound proposition, but is this how it works on the ground?

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Does the rent earned from renting out spaces within our property to retailers justify itself or would we have earned more by introducing more F&B outlets? Would it have been wiser to rent space to corporates for office use? Do shop owners still see value in being located within a hotel with malls mushrooming around cities, promising higher footfalls?

Hotelier India posed these questions to hoteliers in various Indian cities to see what the word on the street was.

The convenience argument
Many hoteliers are of the opinon that a revenue spinner or not, it remains important to provide your guest with the convenience of some amount of in-house retail. The soon-to-open Jaipur Marriott Hotel general manager, Pankaj Birla says, “When you are looking to attract the business traveller who is not likely to have the time to go into town or to a market and shop, it makes sense to have retail options within the hotel.”

But not everyone thinks in-house retail makes a difference to the guest’s convenience.

“I think our guests would rather visit a mall if he wants to shop, where he would have access to a wider variety of brands and articles,” says Grand Sarovar, Mumbai, general manager, Ajoy Balakrishna. The property is located in Goregaon – a suburb which hosts the Oberoi and Inorbit Mall sand is close enough to other malls like HyperCity and Infiniti.

Balakrishna cautions that this may not apply in smaller cities. “Areas where malls may not exist, or where they exist on a smaller scale could see guests or even locals being more comfortable going shopping at 5 star hotels,” adds Balakrishna.

Hoteliers feel that there are several diverse factors that result in a general preference among guests for shopping away from within the hotel premises.

Courtyard by Marriott Mumbai International Airport general manager Sanne Emborg agrees that customers would probably rather shop elsewhere.
 

“International guests who would typically be the market for retail at a hotel are more interested in traditional shopping and would probably rather go to a marketplace to soak up India while shopping,” says Emborg.

However, at her property too, there has been an effort to offer the convenience of shopping to the guest - on a small scale. Of MoMo mart, the souvenir shop in her property’s premises Emborg adds, “It’s definitely not an area of revenue but a service or convenience that we like to offer to our guests.”

General manager of the two Raintree Hotels in Chennai, Manish Dayya echoes this sentiment. “We have a souvenir shop at our property but it is a not-for-profit initiative aimed at providing convenience to our guests. We do not even charge our supplier a rental for the space.”