FNB News - "There is urgent need for budget and mid-market hotels"

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INTERVIEW

"There is urgent need for budget and mid-market hotels"

Monday, 02 March, 2015, 08 : 00 AM [IST]

Best Western Ashoka Hitec City is part of the Best Western Group, which is one of the largest hospitality chains in the country. The property is a business hotel located in the heart of the information technology hub. It is the second hotel in the city under the Best Western Ashoka umbrella. The property fuses functionality, aesthetics, technology and the right mix of service to offer customers control over their environment. Karteesh Reddy, ED, Best Western Ashoka Hitec City, in an email interaction with Anurag More, throws more light on the property and the current status of the hotel industry in India. Excerpts:

Brief us about the current status of hotel industry in India.
The Indian tourism and hospitality industry has emerged as one of the key industries driving growth of the services sector in India. The hotel industry in India witnesses tremendous boom. There is an urgent need for budget and mid-market hotels in the country as travellers look for safe and affordable accommodation. Good quality products and services at affordable prices should be the USP (Unique Selling Proposition) of any successful venture.

How many properties / brands does Best Western Group currently own? Where are they located?
Best Western is the world's largest chain, providing marketing, reservations and operational support to over 4,000 independently owned and operated member hotels in 80 countries and territories worldwide. Best Western has grown into an iconic brand that hosts 400,000 worldwide guests each night.

How many properties / brands does the group intend to launch in the coming years, and where?
Best Western Ashoka Hitec City is our second hotel in the city under the Best Western Ashoka umbrella and we plan to increase our presence and open more hotels in Telangana and Andhra Pradesh. It’s our endeavour to establish ourselves as a leading player in the hospitality sector with significant national presence.

What makes you different from other players?
Located in the heart of the information technology hub, Hitech City, the hotel has an elegant and contemporary design and offers state-of-the-art business and leisure facilities. The hotel is conveniently located with easy access to key area attractions and business locations. Hotel guests will surely appreciate the variety of nearby dining and shopping options.

Best Western Ashoka is one of the finest collections of luxury which offers its guests an experience steeped in elegance, personalised service and warm hospitality in Hitech City, Hyderabad.

What are the other challenges that the industry faces?
The hospitality industry was under duress in the year 2013 because of multiple reasons. Primarily due to the overall downturn in the global and local economy, resulting in relatively lower spending in the travel and hospitality indulgences by people, and secondly due to the disproportionate growth in supply of hotel rooms compared to the growth in demand in key markets in the country. The latter resulted in panic sale by hoteliers impacting the ADRs (Average Daily Rate) and RevPARs (Revenue Per Available Room).

As India is emerging as a destination on the global travel map, expectations of customers are rising. The hotel industry is facing heavy shortage of rooms. It is estimated that the current requirement is of 1,50,000 rooms. The chains are hoping to capitalise on India's burgeoning population of more than 1.2 billion and the rising spending power of the country's middle-class, as more and more Indians travel within the country.

One of the greatest challenges plaguing the hospitality industry is the unavailability of quality workforce in different skill levels. Retention of the workforce through training and development in the hotel industry is a problem and attrition levels are too high.

What are the trends you are witnessing in the sector?
The constant transformation has made the Indian hotel industry more functional and practical and has gained a level of acceptance world over. The standards of facilities and services offered have evolved over the last decade towards the extensive use of technology, environment-friendly services, pricing, market segmentation, regional preferences, etc. The Indian hotel industry has seen a significant growth in room inventory across categories from upscale luxury to limited services and, boutique and budget hotels. The occupancy and the room rates have seen continued gains both from the domestic and the international traveller in both the business and leisure segment.

According to World Travel & Tourism Council, by 2020, travel and tourism investment is estimated to should reach US$109.3 billion or 7.7 per cent of total investment. Federation of Hotel and Restaurant Associations of India states that India currently has over 200,000 hotel rooms spread across hotel categories and guest houses and is still facing a shortfall of over 100,000 rooms. Leading hotel brands have pepped up their investments and are in various stages of commencement of new proprieties in India, both in metro and non- metro cities.

How do you see the industry in the next five years?
The Indian hotel industry is highly fragmented with a large number of small and unorganised players accounting for a lion's share. The industry is likely to experience robust growth on the back of rising disposable incomes and favourable industry statistics. The market is estimated to reach US$30 billion by 2015.

The ministry of tourism (MoT) has set a goal of 11.2 million Foreign Tourist Arrivals and 1% of the global outbound tourism by the end of the 12th Plan period of 2017, apart from a substantial increase in Domestic Tourist Visits (DTVs) In view of such ambitious plans, the MoT is looking at investments of over Rs 22,000 crore during the current Plan period.