|
|
|
|
|
|
|
Optimistic results at the end of the first quarter of 2010 have got the leaders in travel trade re-strategising says Shalini Seth.
The closure of the financial books in 2009-10 fiscal year has given a reason to officially pronounce India “cautiously optimistic”.
Talking to travel trade industry leaders to understand strategy and outlook for the rest of the year, the term is now familiar to TGI, along with other trends that have emerged on the eve of strategising for recovery.
Story continues below 
The Union Minister of Tourism, Selja Kumari set the tone. “Now we can safely say that the negative impact has been totally mitigated. Tourism in India is now on the path of recovery,” she says, commenting on the growth rate of 12.8% in foreign tourist arrivals (FTAs) in the first quarter of 2010.
In fact, December 2009 saw a huge rise of 21% growth in comparison to the corresponding period during the previous year. The trend continued with 16% growth in January 2010 and about 10% in February 2010.
Going forward, the key trends are:
Too much room
Smart operators increased their room capacity last year. In India, traditionally, land prices have not permitted budget hotels, but now there is oversupply, at least temporarily.
“Occupancy seems to be here but rates are going to stay where they are because of oversupply,” says Uttam Davé, president and CEO of InterGlobe Hotels, Accor’s key partner in India. Keys Hotels is set to launch soon.
And, Hilton plans to add 1500 keys in the next 12-15 months, with six out of its 10 global brands – Hilton, DoubleTree, Garden Inn, Hampton, Conrad and Waldorf Astoria. Experts say that this is not the case of too much of a good thing.
“In the short term there will be over supply. But no hotel or tourism product is built for three years. There is a seven-year time frame for recovery,” says P R Srinivas, Industry Lead, Tourism, Hospitality and Leisure, Deloitte India.
Domestic traveller
The Indian traveller leaving home to go for pilgrimages, short weekend breaks, business or meeting relatives is finally getting his due. Srinivas of Deloitte India, analyses the trend thus: “Domestic travel numbers are bound to increase. We don’t even think about the domestic tourist, when they are the only reason to exist for much of the travel trade industry in the country. There are 500 million travellers in the country – a 100 times more than outbound travellers.” The ministry has supported this claim with Selja Kumari calling domestic tourism “the backbone of the economy”.
Adding value
At the sixth Hotel Investment Conference - South Asia 2010, one of messages from hoteliers such as Martin Rinck president, Hilton Worldwide, Asia Pacific; Liam Lambert, president, the Oberoi; and Capt CP Krishnan Nair, chairman, the Leela, was to do with adding value. “We do not want to be the biggest. We want to be the best,” says Liam Lambert.
“Rather than having a nice time physically, people want to have a nice time intellectually and to participate in community activity. If there is an eco-friendly hotel and a non eco- friendly hotel available in the same price, I’d probably go for the eco-friendly one. People want things tailor-made rather than be a part of a package,” he says, speaking on the trends that are shaping their strategy.
Business moves
One of the first sectors to show improvement was business travel, says Srinivas. “Business travel in the country has been on the mend. It was never down in the dumps as it was abroad,” he says.
Business travellers, both men and women, have caused the industry to sit up and take notice of what they need. “Business travel and business delegations have picked up very smartly. That trend started a little earlier instead of leisure. So I think if you are a hotelier in business areas you see smart revival.
If you are a hotelier in leisure segment you are struggling still,” says Sharma, adding that business travellers will travel to less-than-perfect destinations while leisure travellers would look out for the right amount of sunshine.
Scaling down
Things will not be the same, at least for some time. “The customer is trading down. He was earlier looking for a five star deluxe hotel, today he’s happy with a five star,” says Arjun Sharma, MD, Le Passage to India. “We are dealing with a new customer psyche – tendency to book late and trade down.” So, re-strategising does not include hiking prices, for the moment.
They are not coming back
The most important lesson the industry has learnt is to go lean. “Lot of these jobs that are cut won’t be added back. At least not for a couple of years,” says Christopher Mumford, MD, HVS Executive Search.
“They had become quite fat and they really need to lean and mean and they realise that they can operate. So they don’t need all these people. They need people in hotels but in the head office and corporate office I don’t see people being added back,” he says. Industry leaders are a bit gleeful at having learnt this. “That was a great initiative. We are trying to institutionalise the culture of cost control,” says Davé.
| Articles | |
| Companies | |
 |
Site Map
 |
 |
 |
 |
|  |
COMMENT
Comment on this article