Natural Selection

The distinction between select-service and full service hotels is blurring, with the former offering similar services

By Vinita Bhatia

Walk into a select-service hotel in India and what are the amenities that a guest can usually expect? It could range from free breakfast, free WiFi, free newspaper to access to a gym or swimming pool, and sometimes even free airport transportation.
Now, what amenities does a full-service hotel offer? All of the above, definitely, and a little more, with just a touch of luxury. So, the question plaguing developers and hoteliers is how can they get guests to appreciate the true concept of a select-service hotel, without going into details about the disparity between the room rates.
Defining select-service hotels, HP Rama, chairman and CEO, Auro Hotels said that these offer just breakfast service, without lunch or dinner. “Most might not have a swimming pool or health club, though an upscale select-service property could have a spa. They won’t have a banquet hall, but would have a meeting room that could house around 50 people,” he added.
However, he does not see scope for this model in India as here the market demands are justified by real invest investment, which requires different profit centres. When it comes to select-service hotels in the US, majority of the income comes from guest rooms and very little from F&B. “On the other hand, in India, close to 40% to 50% of the revenue comes from F&B and this is a separate profit center. This justifies the cost of building an F&B outlet in a hotel where land and development costs are high. Additionally, guests too expect a hotel to have an F&B outlet,” he elaborated.

With increasing competition, hotel brands and developers want to keep enhancing guest experience at select-service properties. And they are realising that one way of doing this is by incorporating some F&B options, which are not expensive or complex. This could be a deli, where they can grab a meal-to-go.
“Globally, the definition of select-service hotels is undergoing a transformation. Keeping pace with it, in the US, hotels are coming up with concepts like extended food service besides the breakfast in the morning or an interactive lobby bar. This does not affect the operational cost, but it opens up another revenue stream for them,” Rama said.
Ultimately, the objective is to increase the revenue without increasing overheads. At the same time, it is about matching guest expectations when they walk into a hotel – since they might not know the nuances of a select-service or a full-service property. After all, a guest won over, is a guest owned forever.

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