Space Utilisation: An emerging trend amongst hotels to identify spaces that can add to the revenue
Industry experts propagate out-of-the-box thinking in identifying hotel spaces that can add revenue to the bottom-line
It is an undisputed verity that space is at a premium, no matter which part of the country or the world one lives in. And, in India, especially in the urban areas, where realty figures get increasingly mind-boggling, hotels have started looking at spaces with a new eye—especially at those which may have been vastly under-utilised in the past. In an industry like hospitality where the dynamics of business are always changing because of external factors, hoteliers are looking for ways to ensure healthy bottom-lines. Innovating a variety of ideas for effective space utilisation is a fast-evolving trend.
Sheraton Grand Bangalore at Brigade Gateway WorldCafe: A luxurious space remains buzzing with guests meeting and unwinding over tea and coffee throughout the day
One has to consider the pressure from developers on the operators of the properties to turn in more profits and ensure that every inch of their real estate pays. Prashanth Rao Aroor, ceo, IntelliStay Hotels, recognises hotels as just one of the real estate options available to developers, and there are other competing asset classes such as commercial, residential, retail, schools and hospitals.
Prashanth Rao Aroor, ceo, IntelliStay Hotels
Aroor points out, “Quite often, the developer considers the return from each class unemotionally and hotels need to compete. One of the ways to do that is to ensure zero waste in space utilisation to get a required level of revenue maximisation from it. This is driving cut-throat competition among hotel brands to maximise revenue from every part of the hotel.”
It is no wonder then that the importance of optimally using space is swiftly being recognised by hoteliers both in India and abroad. Step into any property worth its salt and you will immediately observe the changes that are evident in its design and interiors.
Srijan Vadhera, general manager, Conrad Bengaluru
As Srijan Vadhera, general manager, Conrad Bengaluru, emphasises, “A wise man once said, ‘If there’s a way to do it better – find it….’ Innovation is seeing what everybody has seen and thinking what nobody has thought.”
Hilton Worldwide has recently introduced a new meetings-centric brand that incorporates many emerging trends that have transformed the events space. “Signia Hilton, as it is called, incorporates flexible meeting spaces along with indoor/outdoor spaces, giving meeting planners more options, while creating experiences and spaces holistically reimagined for today's meetings and events,” says Vadhera.
Hilton is also investing in group bookings, which account for 30 per cent of its global business so that this upscale brand resonates with what planners are looking for.
JW Marriott New Delhi Aerocity added INR 31 million to its bottom-line by converting a wasted space into an events space
Believing that hotels can make the best possible use of every space available to boost business or provide a significant service to guests, Nitesh Gandhi, general manager, JW Marriott New Delhi Aerocity, shows how they have created an exclusive event destination from an under-utilised space, now named as ‘The Gallery Room’. With meticulous interiors and elegant art pieces, The Gallery Room is an ideal venue to host business meetings and events, and screen previews requiring audio-visual immersion for gatherings. The space comes equipped with Bose sound systems, Swarovski crystal chandeliers and a life-size LED screen. It spreads across an area of 4,000sq.ft with a capacity to accommodate 150 guests.
Nitesh Gandhi, general manager, JW Marriott New Delhi Aerocity
“I consider this as a very thoughtful and relevant utilisation of the hotel’s infrastructure as it can contribute greatly towards the business. Not only for revenue generation, but we have also diligently converted an area in the back-of-the-house into an Associate Fitness Centre which is an approachable go-to gym right in the hotel premises for our associates during any hour of the day,” he adds.
Since the opening of The Gallery Room in August 2018, it has successfully contributed around INR 31 million towards the banqueting business.
Strategies to effectively utilise space
Thinking out-of-the box has become the norm, rather than the exception. But adding functions to existing areas while keeping the luxury and comfort factors in mind is no mean task.
Varun Chibber, general manager, The Leela Ambience Convention Hotel Delhi
Recognising the paradox, Varun Chibber, general manager, The Leela Ambience Convention Hotel Delhi, underlines, “As a luxury hotel, the public area space should be more than adequate to cater to varied guest needs. As a matter of fact, guests at leisure expect and deserve luxurious public spaces. On the other hand, organisers of high-end conferences expect additional spaces for breakaway rooms and team building activities. Specific spaces such as digital galleries or planning rooms also add a touch of delight for bespoke meeting planners and event executors. We are always focused on delivering opulent spaces deigned intelligently, with optimum space utilisation. Our endeavour is to identify spaces within the hotel that can be utilised to enhance guest satisfaction and add revenue for the organisation.”
Literally, excluding the external façade of a property, the first introduction to a hotel when one arrives is its lobby, and that often speaks a lot about any hotel. Conventionally, though the lobby is the point of entry, it often takes up more space than is required.
Ajay Bakaya, managing director, Sarovar Hotels Pvt. Ltd.
Lobbies are now increasingly becoming a multi-purpose entertainment, business and recreation location. Ajay Bakaya, managing director, Sarovar Hotels, reveals, “Citizen M hotels have done away with the reception space altogether. A self-service counter, largely with one or no staff, assists guests with in-house technology to check-in. Citizen M hotels across the world offer an off-lobby lounge space with multi- activity possibilities. The space provides lounge seating; oversized work tables with four large size computers and under-table printers; big TV screen areas; self-service coffee machines and more. A server also comes around with fresh croissants every few minutes through the morning.”
In India, Hotel Sarovar Aditya Portico, Hyderabad converted a car parking into an underground nightclub. “The investment was minimal. The space was freely available in a business hotel. Annual incremental profits were over INR 50 lakhs a year. One of our Bengaluru properties used a part of the car park space to create a staff recreational activity and leisure space. It was funded through staff welfare funds and hugely added to their morale and contentment.”
The Lobby at Taj Palace, New Delhi
Taj Palace, New Delhi showcases one of the capital city’s most iconic hotel lobbies, which oozes character. While it continues to function as a conventional lobby, the addition of a tea lounge draws in more guests and contributes to the revenues.
Samrat Datta, general manager, Taj Palace, New Delhi
Samrat Datta,GM, Taj Palace, New Delhi says, “Newly renovated, it features a classic, contemporary decor accentuated with elements from Mughal-era inspired architecture. And the highlight of our resplendent lobby is The Tea Lounge that we re-launched in February 2018. A luxurious space, it remains buzzing with guests, who meet and unwind over tea and coffee throughout the day, while at dusk, the pianist elevates the entire experience with his mellifluous tunes.”
The Tea Lounge at Taj Palace, New Delhi offers a stunning ambiance along with a working space
Yet another use of lobby, again as exemplified by Taj Palace, New Delhi is the showcasing of art-based collaborations. Currently, the hotel has partnered with an art gallery to display eight bespoke paintings by artist Paresh Maity. Paintings from the custom-made series, Odyssey of Celebration are available to purchase on request. Careful thought has to go into putting a space to good use.
Vineet Verma, MRICS, executive director and ceo, Brigade Group, Bengaluru
Vineet Verma, MRICS, executive director and ceo, Brigade Group, Bengaluru, opines, “Using under-utilised spaces for retail offerings is an interesting option, which would ideally depend on the location of that space. Hotels use such spaces as a small café to sell bakery products or as a handicrafts store that attracts guests visiting from different countries. Many of the Indian hotels have a lobby shop or a beauty salon that is let out to other brands. These additions offer options to guests under one roof, along with the conveniences.”
He enumerates the spaces that tend to be greatly under-utilised:“Hotel lobbies, banquet pre-function areas, parking spaces or roofs of the hotels are often underutilised. Especially in a business hotel, a lobby can be effectively used for retail outlets, grab and go outlets or lounges. Parking spaces are very rarely fully utilised and can be rented out to nearby corporates or car rental companies on slots and availability basis. This creates extra revenue source for the hotel.”
Hotels, in fact, are depending on retail to shore up their revenues. Vadhera gives example of how Montblanc expanded its retail presence in India by opening a boutique in Conrad Bengaluru. “The new format in which the store launched showcasing Maison's Neo retail design, was a concept that was being rolled out globally. Conrad Bengaluru served as a base to attract the right kind of evolved audience that understands luxury.”
Chibber goes on to show how The Leela Ambience identified one corner of the lobby that had four beams and converted it to a wedding studio to maximise banquet revenue. And, in the same vein, an unused corner was converted to a Cuban-themed bar. He says, “The only way to run a profitable unit is by embracing smart spaces and staying alert to the power of each square foot. Once this is achieved at the design stage, the senior team has to constantly keep the spaces fresh, attractive and engaging. Traditional wisdom was always about ‘indulge, but don’t waste’, and I would say that it still holds true.”
According to Aroor, IntelliStay Hotels have a good mix between rooms and F&B. "In tier 1 cities, food is a cut-throat business and best left to local restaurants. So we focus on rooms as a core area and keep the space tight. In our Tier 1 hotels, we have converted under-utilised business centres into co-working spaces, where we have offered fixed contracts for companies. In a Tier 2 and 3 cities, on the other hand, we are the ‘go to’ place for dining and weddings, while the room demand is not deep. Here, you can find as much as 50 per cent space going to F&B and large rooms, where families can request multiple extra beds and squeeze in large wedding groups. In Mango Hotels in Jammu, Jodhpur or Haridwar, 40 to 50 per cent revenues come from F&B.”
Other experts in the field such as Sujeet Kumar, general manager, Sheraton Grand Bengaluru, believe that lobby spaces, restaurants that are not operational and business centres can be morphed into coworking spaces. One way of doing this is by adding ergonomic furniture that serves multiple purposes. The property in the garden city seems to have done just this.
Sujeet Kumar, general manager, Sheraton Grand Bengaluru
He says, “The bridge that connects the hotel to the World Trade Centre has been converted into an art café, a space that brings together an amalgamation of art and an innovative contemporary menu. We have also converted a dead space into a contemporary restaurant, Alfresco by Bene, that serves classics and exciting dishes from Bene, our Italian restaurant.”
Alfresco By Bene
He points to studies done between 2006 and 2015, which have shown that the number of co-working spaces and available seats have roughly doubled each year. IndiQube, the co-working space at The Leela Palace, Bengaluru is an excellent example of how the hospitality sector can create an opportunity without investing in major changes or structural development. Hotels by Panchshil Realty, in fact, have done away with business centres, instead converting it into meeting rooms and office space.
Nitesh Gandhi, general manager, JW Marriott New Delhi Aerocity believes that often restaurants, public spaces, rooms, suites and spaces devoted to catering may not give 100 per cent utilisation on revenue per square foot. And emphasising that using wasted spaces to build retail offerings is one option, Gandhi feels, “This definitely is a great strategy to attract customers and have an add on revenue generating segment for the hotel. But it is significant that that you choose the right brand or service which corresponds to the interest of your guests.” Although renting out wasted spaces to standalone F&B brands is an option, Gandhi opines, “These ideas work well for the hotels in India but I do wish to reiterate that this varies from property-toproperty. Such arrangements surely bring definite and fixed revenues to the hotel and both can benefit in terms of engagement, customers and services.”
At JW Marriott Aerocity, Playground, the restaurant and lounge has been converted to offer a speakeasy and food truck experience, which is operational from 6 pm till 4 am. “We have successfully begun to use it as an established event space from 9 am till 6 pm by building on AV and service rituals,” says Gandhi.
The main elements of this chic restaurant are street art, eclectic music, a speakeasy space which is accessible by invitation only, full leather loungers designed by Timothy Oulton and a food truck. We are foreseeing a revenue of around INR 40 million INR to be generated from events at Playground by the end of this year to which we have already achieved INR 500,000 in the first quarter.”
Pre-function area, JW Marriott New Delhi Aerocity
In an attempt to generate more revenue, JW Marriott New Delhi Aerocity has converted their suites into service apartments for their long-staying guests. Even as various areas are examined at different times, he underlines that due care needs to be taken during the optimisation process, for there are various challenges that arise once you plan to bring spaces into proper utilisation. Ultimately, these decisions are driven by the business need of the hour.
Madhav Sehgal, general manager, Andaz Delhi
For, as Madhav Sehgal, general manager, Andaz Delhi, points out, “Mix-use development and multidimensional spaces are a trend in the hospitality industry. Be it the ergonomic desks or a day bed in the guest rooms, the lobby lounge spaces and art zones within the hotel, space utilisation does not mean filling up an empty space for a dead corner. It needs thought and skill to curate an experience in the zones that complement the ethos of the brand and location. While reinventing the way hotels are functioning, it is absolutely important to keep optimisation, efficiency and comfort in mind."
Ranjit Batra, president - hospitality, Panschil Realty
This requires, according to Ranjit Batra, president - hospitality, Panschil Realty, “detailed planning of the form and function of the space and operations. When spaces within the hotel are not envisioned from the perspective of function, they will generally end up requiring more resources to manage, thereby incurring heavy costs for the hotel management.”
Several popular tourist destinations in India and abroad take advantage of extra spaces in the hotel and re-purpose them towards avenues that would add value to the overall hospitality experience. Considering the way hotels are adapting to the changing needs of the times, it would not be wrong to conclude that the way for the future are properties that becoming even more multi-dimensional. Facilities are being planned without losing out on the luxury factor or the well-appointed nature of the properties. Creating multi-use spaces would be a win-win situation for hoteliers and guests.