Concerns on skilled workforce, business sentiment find most traction at Hotelscapes 2018
Challenges and opportunities were discussed by the who’s who of the Indian hospitality at the inaugural edition of Hotelscapes 2018. Hosted at The Leela Ambience Gurugram Hotel & Residences, the event was conceived with the idea of creating a forum for dialogue and networking among senior hotel industry professionals and was successful in achieving the same.
In several sessions, keynotes and a unique forum of 30+ General Managers from Delhi/NCR, hoteliers discussed the road ahead for the Indian hospitality, expressing some concern over the lack of an appropriate growth in the business pie. If one had to cherry pick a few major takeaways from several insightful open forum sessions, the need for a more nuanced approach in managing the new-age workforce found the most traction. There was an over-whelming concurrence on understanding the aspirations of the current generation of the workforce – who were far less patient and invariably more ambitious than the previous generation of hoteliers.
The event was attended in good numbers. Leading the discussions were keynotes by Puneet Chhatwal, MD & CEO, IHCL Limited and Nakul Anand, Executive Director, ITC Hotels. Apart from hospitality, trends in the inbound tourism segment was also put under scanner by Kapil Kaul, CEO, CAPA- South Asia.
Here are some major opinions on issues:
- Indian hotels needed to come together and collaborate, instead of biting into each other’s business share. The competition was with international markets and not within. Packaging policies, procedures and marrying them with the Asian emotional intelligence were going to create a perfect recipe for consumers. The industry must focus more on ethics and integrity rather than performance as the sole criteria to judge an employee’s calibre. – (Puneet Chhatwal, MD & CEO, IHCL)
FAITH had continued to champion the industry’s cause bringing them to the forefront for deliberation and resolution. FAITH had successfully managed to lobby for a reduced GST slab rate for hotels, besides pushing for a more liberal e-visa regime, with the provision of a double-entry. The organisation had been able to better communicate and cooperate with state tourist departments for a faster execution of tourism-related issues. – (Nakul Anand, Executive Director, ITC Hotels)
The steady penetration of international brands into India, besides the growth of home-grown brands, had lent a certain degree of standardization in service, bringing it closer to being at par with the world-best service. – (WTTCII Chairman Sunder Advani)
- Despite the growth in occupancies, the business pie had not really enlarged. Profits had not been commensurate to the recent spurt in occupancy rates and hoteliers needed to display cautious optimism on the growth prospects on the rate front in the imminent future. – (Ashish Jakhanwala, CEO, SAMHI Hotels)
- Leasing as a concept was finding increased traction among hoteliers. More and more hotels were opting for the leasing route. – (Manav Thadani, Founder Chairman, Hotelivate)
- The standardization of service offering could only do that much, and truly pre-empting a consumer’s need was the paramount requirement for hotels. – (Vimal Singh, MD, Louvre Hotels)
- A transformed pedagogy, reflecting the changed landscape of the hotel industry was advocated. The outdated syllabi needed to be looked into. Hotels also needed to view interns differently, as students, as internships were merely an extension of the education from classrooms to the field. – (Virender Dutta, Chairman, International Institute of Culinary Arts)
- The challenge of creating benchmarks in several distinct segments, such as adventure, wellness and medical, religious, heritage and others, was enormous. Given the Indian context, the diversity and scale of India’s tourism offering had made the task more daunting. The benchmarking of environmental standards, keeping in mind the all different service providers in tourism, required attention. The global traveller was very aware of the impact of their movement on the environment, but the domestic segment, running into multiple millions, lacked awareness, sensitization, and education on tourism’s impact on environmental degradation.
The concept of waste management was absent in the country. The unorganised sector, which formed a large chunk of India’s business, was prone to cutting corners to reduce costs. Therefore, the onus lied on the organised sector to do more to protect the environment. Benchmarking small initiatives such as using wooden spoons than plastic spoons, glass water-bottles than plastic bottles could go a long way. Banqueting standards could also be standardized to put a plug on the massive wastage of food items on a daily basis.
Experiential activities had emerged as an integral part of the tourism’s landscape, meaning hoteliers could look at means to interweave them as a part of the overall hospitality experience for the guest. – (Rakesh Mathur, Co-founder, Eco-tourism Society)
- The image that the hotel industry was a tough terrain as a profession needed to be altered through constant engagement with budding professionals, at the school level, to develop a trained workforce to cater to the expanding industry – (Mandeep Lamba, Managing Director, JLL)
- Indian hotels and the local know-how were capable enough to benchmark the best global practices, evident with some of the Indian hotels who had acquired the art through the rigour of trial and error. Indian hotels did not need to import the know-how. – (Sanjay Sharma, Market VP, North India, Bhutan & Nepal, Marriott Hotels India)
- OTAs were here to stay and therefore it made sense to align with them, taking advantage of their vast distribution networks. Restart F1 race at Buddha Circuit and drive large-scale events to boost the city’s global visibility. – (Arif Patel, VP, Sales and marketing, AccorHotels)
- Marketing and branding hotels had become much easier to undertake, thanks to a profound growth of the online space, coupled with a rising internet user base in the country. A quality content aimed at the right customer set could boost a hotel’s profile and reach in the market unlike ever before. (Arif Patel, VP, Sales and marketing, AccorHotels)
- Hotels in the capital could exhibit what the city had to offer to all segments like leisure and MICE, barring business travellers as the segment was more price-driven than others. – (Kadambini Mittal, Senior Area Director, Marriott Hotels)
- The Indian market was far too dependent on the long-haul, in terms of international inbound, starkly contrasting to the trend in Europe and North America where much of the traffic was emanating from within the region. The Chinese market was intrinsically transient in nature and the Indian hotel industry needed not to pin too much hope on the Chinese outbound. – (Kapil Kaul, CEO, CAPA-India)
- An exorbitant tax structure had made it more difficult for hotels in cities, especially business hotels to clock operational profits. There was also an understanding that hotel operators in India were under relatively much less pressure – which was the opposite to the business scene elsewhere, especially in Europe and the Americas.
- Positioning Delhi as a world-class destination required a concerted approach, involving all stakeholders, representing entertainment, hotels, convention halls, transportation, culture and heritage, and others to roll out an effective marketing pitch, senior industry leaders argued. Participants advocated creating a convergence between tourism and hotel industry, perhaps drawing inspiration from models such as ‘Visit London’ which had successfully marketed the city of London as an integral tourist experience.
- While hotels were individually driving marketing and outreach but these attempts without unison in action was not going to bear any fruit.
Demand in Delhi-NCR to continue outpacing supply; Aerocity finally coming of age, believe general managers
The general managers forum was a unique undertaking as an open forum of 30+ general managers from Delhi-NCR came together to discuss trends, opportunities and bottlenecks in driving business in the National Capital Region. Among others, the rise of Aerocity as a destination found most traction. Developing the workforce to cater to the industry by understanding the aspirations of budding professionals also saw a detailed discussion. Excerpts from the session:
- There was a need to keep in mind the changed approach of the younger workforce as managing the aspirations of the millennials had continued to remain a major challenge. – (Dilip Puri, Founder, Indian School of Hospitality)
- The inability of the hotel industry to drive higher room rates, especially at the back of healthy occupancy levels was put under the scanner. Several general managers suggested that an upswing on the rate front was right around the corner.
- Another area of unequivocal concurrence was the rise and rise of Aerocity as a destination appealing to all hues of travellers, hoteliers noted. The promise of Aerocity as a destination for leisure, business and culinary experiences was inching closer to reality, general managers representing hotels in Aerocity suggested. Most hotels had invested significant sums to curate numerous fine-dining experiences, supplementing Aerocity’s attraction as a destination, more so for the local leisure traveller. GMR’s role in driving large-scale events which have had an incremental impact on businesses was also lauded. The overall RevPar had seen a noteworthy growth in the past year, general managers noted.
- The rise of Aerocity, with 3000-odd rooms on offer, has had a definite impact on hotels, especially in sub-segments such as travellers intending to stay for a night or two, the general sense indicated.
- The central Delhi market space, in the international leisure inbound, was set to remain a challenging space, as the segment had remained bereft of any noteworthy growth. With The Oberoi, New Delhi back in the fray, other top-end hotels in the sub-market of central Delhi were under pressure to retain business. – (Vijay Wanchoo, Senior Ex. VP, The Imperial)
- The challenges of operating a single property were manifold, owing to the absence of any international marketing offices. Chains/brands had a better deal in outreach and single-hotels were lopsidedly dependent on FTOs (foreign tour operators).
- The capital city’s hotels were witnessing an unprecedented growth in the MICE segment and the Aerocity market had majorly catalysed the development. – (Zubin Songadwala, GM, ITC Maurya)
- The supply was going to continue fuelling the demand in Delhi and NCR. With the, now under-construction, Dwarka Convention Centre in the picture, with around 5000 rooms, a gradual change in the customer base in Aerocity was going to happen, with more business coming in from transient travellers. Such a development was going to enable hotels to charge considerably better rates.
- Expos and large-scale events in Greater Noida were accounting for much of the Noida market’s footfalls, general managers representing the market shared.
- Pragati Maidan and other such upcoming MICE-centric venues in Greater Noida and Golf Course extension were going to put additional pressure on hotels in the city. There was a need to generate a continuous buzz around the Delhi market to ensure a year-long demand. – (Jaideep Anand, General Manager, Leela Ambience Gurugram)
Gujarat Tourism actively courting the hospitality industry
Gujarat Tourism was represented by Soman S Pathy, Liaison and Nodal Officer and Nayan Shah from KPMG. Soman Pathy shared with the audience some of the most recent additions in the state tourism’s inventory, explaining that the tourism board had turned the wilderness of Rann of Kutch into a thriving business and conference venue. In his presentation, he shared some pictures of the new facility, detailing that the venue was located at the last village before the international border with Pakistan. He said that it was an experience that attracted young travellers.
He also outlined the policy framework of the state government, insisting that the government had put in place a progressive and liberal framework. The specifics of it were also detailed in the presentation.
Synergy between tourism and hotels missing; vibrant digital city-based promotion critical, suggest hoteliers
Senior hoteliers debated the way forward to drive city-based promotion, arguing how Delhi could take a leaf out of the world-best practices. Disjointed efforts by tourism and hotel industry insiders emerged as the most critical bottleneck needing urgent attention. Excerpts:
The hotel industry needed to take a lead in pushing the local government to set up a body with representation from all trade bodies to promote the city and NCR. The autonomous body could undertake global promotions. The industry could take a leaf out of the success of bodies such as ‘VISIT LONDON’ – which had demonstrated a clear vision to promote the city in its all entirety.
The industry could set aside a certain corpus for the same.
Delhi’s rich and vibrant theatre space was not being adequately promoted. The hotel industry could perhaps work with the Delhi tourism department to create a modern and buzzing website. It could encapsulate what the city had to offer in a more engaging way, leading to better traction and footfalls. It could act as a one-stop destination to book tickets of any event in the city.
The concierge also needed to be trained to be well-equipped to handle any information-related requests from guests.
(Mandeep Lamba, Managing Director, JLL)
Disjointed efforts from stakeholders was a major bane in prompting the city on a global pedestal. Barring two occasions, namely the ASIAD Games in 1982 and Commonwealth Games in 2010, tourism and hospitality stakeholders had never come together to promote the city. The need was to promote ‘Brand Delhi’ and NCR, laying out its cumulative offering.
Much of the hotel industry’s agenda was driven by delivering profits and not undertaking a holistic marketing outreach.
Despite being home to some of the finest monuments, a tourist visiting these sites were not experiencing a world-class interface, be it ticketing, restrooms or others.
(Tarun Thakral, Founder Trustee, Heritage Transport Museum)
Delhi was the only city in the country which could ideally benefit from an integrated promotion approach, such as ‘Visit London.’ It derived a position of advantage owing to its vast air-connectivity to major aviation hubs, a strong network of metro and roads, and the general state of infrastructure.
Formula One race in Greater Noida had placed India on the world map and restarting the event at Buddha Circuit was going to bring the much-needed limelight on Delhi/NCR once again.
Events, especially large-scale ones, were another means of driving global traffic into the city, also providing a booster shot to promotional outreach efforts.
The city was bereft of a vibrant nightlife. All the major global cities had a thriving night-life which also tremendously aided to the city’s economy. While there were taboos and cultural issues, it needed to be driven smartly, navigating through such bottlenecks. It was imperative because tourists were not contained with merely sampling culinary experiences and warm hospitality at hotels.
The dawn of the digital age had comprehensively eased marketing and outreach compared to a decade and a half ago. With the right content, curated keeping in mind the target audience, cities could reach out to a much larger audience in a smaller budget than ever before. The challenge was packaging and not promotion.
Guests were finding it easier to inform themselves by using the internet than seeking assistance from the concierge. Services such as UBER and Google Maps had catalysed the transition. New-age hospitality concepts like Airbnb had invariably no human interface and they were catching on, raking better GOPs than most hotels.
The consumer was changing fast and hoteliers needed to look beyond the micro-markets to realise the transition.
(Arif Patel, VP, Sales and marketing, AccorHotels)
Hotels in the capital could exhibit what the city had to offer to all segments like leisure and others, barring business travellers as the segment was more price-driven than others.
As an individual hotel group, Marriott hotels had put in place an exhaustive distribution, across luxury, upscale and upper-upscale, catering to customers across price-points.
Aerocity had a robust inventory and was favourably positioned as a MICE destination. The hotel industry needed to figure out ways to better position it internationally.
The packaging of attractions and things-to-do was essential to induce the MICE demand into the city.
(Kadambini Mittal, Senior Area Director, Marriott Hotels)
Revamp old-school pedagogy, learning methods to address the benchmarking challenge, note hoteliers
The industry required a cohesive effort, in tandem with hotel institutes, to better prepare budding professionals to face the challenges on the job front. It could mean revisiting syllabi and teaching methods, besides providing training professionals the elbow room to make mistakes and learn from them, on the go. Excerpts from the deliberation:
The coming of international hotels into the Indian market had certainly aided in uplifting the overall standards of hospitality in the country. Having said that, Indian hotel companies such as The Taj Hotels had also played an important part in the same.
Each brand had varying standards and had brought their own acceptance in standardizing hotels in the country.
Mobile was a useful platform to impart skill upgradation to hotel professionals as it eliminated the need to physically travel, also providing the convenience of learning on the go at a time of one’s choosing.
(Sunder Advani, Chairman, WTTCII)
The ingrained ideas of education which taught budding professionals to look up to their seniors in hospitality colleges for advice on the way forward had hampered innovation, creativity, and advance learning. It hindered self-examination and curtailed the ability of young hoteliers to find solutions on their own.
The concept of ‘teaching to learn’ needed to be imbibed at institute levels, wherein teachers first needed to align themselves to the concepts of advance learning, before imparting the same to students. Best international best-practices such as the concept of no compulsory attendance could be introduced in Indian institutes to invoke learning by choice and not by compulsion.
A transformed pedagogy, reflecting the changing landscape of the hotel industry must be looked into and advocated. An outdated syllabus was not suitable for the changed market environment and a fast-transforming industry. Hotels also needed to view interns differently, allowing them to learn as students, as internships were merely an extension of the education from classrooms to the field.
An institute for imparting education on hotel management could not function in isolation and its excellence was also dependent on the industry, therefore more interactions between the faculty and the industry were crucial for the future of the hotel industry.
(Virender Dutta, Chairman, International Institute of Culinary Arts)
The system of the SOPs (standard operational procedures) culture was getting in the way of providing a more nimble-footed service to customers whose expectations had grown dramatically over the past years. It was reflected in the fact that some of the best performing hotels in mega-cities like New York and London were not branded hotels but boutique, stand-alone properties.
The standardization of service offering could only do that much, and truly pre-empting a consumer’s need was the paramount requirement for hotels to successfully attract footfalls.
The industry was growing at an exponential rate and perhaps the training and skilling were not evolving at a commensurate rate. The lack of balance between the two was worrying for the industry.
(Vimal Singh, MD -South Asia, Louvre Hotels)
The challenge of creating benchmarks in several distinct segments, such as adventure, wellness and medical, religious, heritage and others, was enormous. Given the Indian context, the diversity and scale of India’s tourism offering had made the task more daunting.
The benchmarking of environmental standards, keeping in mind the all different service providers in tourism, required attention.
The global traveller was very aware of the impact of their movement on the environment, but the domestic segment, running into multiple millions, lacked awareness, sensitization, and education on tourism’s impact on environmental degradation.
The concept of waste management was absent in the country. The unorganised sector, which formed a large chunk of India’s business, was prone to cutting corners to reduce costs. Therefore, the onus lied on the organised sector to do more to protect the environment.
Benchmarking small initiatives such as using wooden spoons than plastic spoons, glass water-bottles than plastic bottles could go a long way. Banqueting standards could also be standardized to put a plug on the massive wastage of food items on a daily basis.
Experiential activities had emerged as an integral part of the tourism’s landscape, meaning hoteliers could look at means to interweave them as a part of the overall hospitality experience for the guest.
(Rakesh Mathur, Co-founder, Eco-tourism Society)
India had no dearth of talent to deploy environmentally-sustainable measures. Hotel companies like CGH Earth group had learnt it the hard way, but did it on their own, without importing the know-how.
How to run the training program was equally important and online means could help better assess the progress made by individuals, instead of going the old school route of asking students to refer to books for delivering services to guests.
(Sanjay Sharma, Market VP, North India, Bhutan & Nepal, Marriott Hotels)
Address dependence on long-haul for inbound numbers; turn to digital infra, suggests Kapil Kaul
The Indian aviation industry needed to de-construct and re-construct in the same measure, putting in place a more globally accepted digital infrastructure for marketing and outreach, said Kapil Kaul, CEO-South Asia, CAPA. He also cautioned against an overt dependence on long-haul routes for the international inbound, a trend at odds with the practice in Europe and the Americas where traffic within the region formed the backbone of footfalls. Takeaways from his keynote on the Indian aviation and international inbound.
- The India aviation market was facing a sub-optimal utilization of routes and capacity in main markets.
- India needed to deconstruct the current infrastructure of marketing – a process already undergoing in the UK, other parts of Europe and the USA. The entire global marketing infrastructure was moving towards the digital space. The Indian industry needed to move towards the digital space for a global outreach.
- India’s inbound numbers were overwhelmingly dependent on long-haul routes. The short-haul traffic was significantly lesser and was an area seeking attention. The trend was starkly opposite to what was happening in Europe and North America where much of the traffic was emanating from within the region.
- The Indian outbound market was much stronger than the inbound market.
- The Chinese market was intrinsically transient in nature and the Indian hotel industry needed not to pin too much hope on the outbound. The Chinese outbound had kept changing its preferences in terms of destinations, therefore investing too much resource in inculcating the Chinese traffic was not a wise move.
A cocktail of Asian intelligence, European policies and American branding is the ideal recipe for success: Puneet Chhatwal
The culture of collaboration and teamwork to achieve a set target was an idea that needed attention from the industry and society at large, Puneet Chhatwal, MD & CEO, IHCL noted. He reflected on the competitive ecosystem that most Indians were subjected to, often resulting in creating a natural mindset of competing, which was a roadblock to the idea of collaborative efforts. He insisted that the competition was from outside of India and not within and the stakeholders needed to come together to drive the industry.
He highlighted the need for infusing benchmarks to bring consistency in standards and procedures, arguing that the Indian hotel market stood out in the number of rules and regulations a hotelier needed to follow to operate a property. While some of the Indian hotels had taken a lead in the initiative, the thrust lied on the policymakers to mainstream them by interweaving them as a part of the policy and framework of operation, he noted.
The Indian hotel industry could take a leaf out of their American counterparts who had borrowed the European systems, packaged them into brands and marketed them the world over, he detailed. He further added that marrying the two (systems and policies) with the Asian emotional intelligence was a recipe for success. Hotels in Thailand and Taj resorts in India had been wonderfully displaying that emotional intelligence, he mentioned.
The comparison between India and Europe, between their standing as hotel markets, explained why most of the source markets for India were connected by long-haul flights, unlike Europe, Chhatwal said, sharing that India accounted for 30 million room-nights while Europe clocked 2.9 billion room-nights.
In a rather blunt observation, he noted that Indian hotels were more concerned about the return on ego, rather than on investments. The industry needed to focus more on the return on per sq. ft. – a trend beginning to find footing in the industry – he said.
To his understanding, there was much buoyancy in the Indian market and given the projected growth in its GDP, the country was favourably poised to inculcate those positive changes into its hospitality offerings to assume a leadership position.
His experience of leading a German Hotel company as an Indian and now heading IHCL with a German passport was indeed a unique proposition, Puneet Chhatwal confessed.
Owners display concern on the lack of growth in the business pie, caution on expansion
The final session of the Hotelscapes 2018 was geared towards understanding business sentiments from hotel owners. Interestingly, owners displayed more caution in expanding footprints, firming up to the idea of ensuring healthy returns from existing inventory. The rise of the domestic segment and its importance in driving businesses also found some traction during the discussion.
- The major hotel chains had not yet fully realised the possibilities of business emanating from the Buddhist tourism segment. The disenchantment was evident with the absence of any reputed five-star brand in the state of Bihar (barring the Lemon Tree in Patna). The Buddhist circuit, spanning across Bihar and eastern UP, was a gold-mine for tourism as it was the Mecca for over 500 million Buddhist followers the world over.
- Given the seasonal nature of tourism in the Buddhist segment, retaining hotel staff was the biggest challenge. Costs involved were higher and several months’ worth of remuneration had to be paid, without work, to maintain the workforce. The anomaly had made businesses costlier, further biting into revenues.
(Lajpat Rai, MD, Lotus Travels)
- Destinations in the tier-2 and tier-3 cities had not seen much growth in tourism. Given the sluggish nature of business, Clark Hotels had resisted expansion. Its strategy of not undertaking any further expansion was based on the present business environment and not monetary constraints.
(Rupak Gupta, Joint Managing Director, UP Hotels)
- While occupancy rates had headed north in past year, the business pie had not really enlarged. Profits had not been commensurate to the recent spurt in occupancy rates and hoteliers needed to display cautious optimism on the growth prospects on the rate front in the imminent future.
- SAMHI Hotels was open to the idea of buying Indian hotel companies and not was particularly disposed towards only international hotels.
(Ashish Jakhanwala, CEO, SAMHI Hotels)
- Leasing as a concept was finding increased traction among hoteliers. More and more hotels were opting for the leasing route.
- Hotel operators in India were under relatively much less pressure – which was opposite to the business scene elsewhere, especially in Europe and the Americas. It was a healthy tension that egged hoteliers to perform better.
- The domestic leisure segment had emerged as a major consumer of luxury hotel offering. Major luxury hotels were getting a significant number of domestic travellers.
- SAMHI Hotels was going to continue raising capital – a trend repeating after every 18 months or so.
(Manav Thadani, Founder Chairman, Hotelivate)
- Bird Group had not faced similar problems as other hotel groups in acquiring, or buying new assets, as most of their business dealings were being undertaken outside of India.
- The hotel group was buying and 3 and 4-star assets and turning them into five-star properties.
(Ankur Bhatia, Executive Director, BIRD Group)
- The life post going public (The Lemon Tree Hotels issued an IPO recently) had been the same. The only major difference was that the company was now more open to public scrutiny.
- The Lemon Tree was going to continue its expansion in cities, most notably with a over 650-keys hotel in Mumbai. The hotel group currently owned and managed 50 properties.
(Rattan Keswani, Deputy Managing Director, Lemon Tree Hotels)
- While the industry and several research firms had concurred to the notion that the market was under an upswing, the yields were reflecting otherwise. The months ahead were going to be witnessing the general elections, adding to the uncertainty in the business environment in the imminent future.
- The leisure luxury segment had seen a tremendous growth, much of it all the back of the domestic segment which was comfortable paying high sums for a world-class experience.
(Kapil Chopra, Chairman of the Board, EasyDiner)