Industry analysis has shown that the companies with an eye on innovation are reshaping the hospitality landscape in India. If we look at the consumer spending fundamentals, the statistics are positive and thus giving a good reason for the companies in this domain remain optimistic. Hoteliers have a positive outlook due to numerous reasons. While the consumers are moving towards having more authentic, personalized and on-demand hospitality, the industry personnel are capitalizing opportunities to have offerings beyond the traditional methods. Its again a tough task and goes a long way as customers’ needs and preferences change frequently. The Indian hospitality industry has experienced phenomenal growth due to factors like rising purchasing power of domestic travelers, an increase in commercial development and foreign tourist arrivals, a growing airline industry and government-led initiatives aiming to stimulate the sector. Interestingly forecasts shares that the hospitality industry will contribute to 7.2% of total GDP in a decade’s time. This clearly states that there is a huge scope of expanding tourism across India.
Indian Hotel Industry: We have a large number of small and unorganized players dominating the market. The reason has been the development of hotel aggregators in the budget space. Online platforms for budget accommodation like Treebo, Zo Rooms, OYO Rooms, etc. have captured a good market share. Aggressively raising venture funding and implementing ambitious plans for expansion, these portals are becoming India’s largest hotel chains. While India has a huge demand for budget accommodation segment, tremendous growth can be expected. But, at the same time a lot of such businesses have also shut down in just 6 months due to issues of service quality. The bigger organized players have a dedicated customer base along with an integrated offering ranging from flights, buses, cabs, etc.
Technology as a differentiator: 2017 will be the year when companies should be thinking way beyond applications, but what technologies are the consumers willing adopt and what will bring in real value. Technologies including AI, mobile apps, IoT, etc. should be added to enhance the customer’s experience. With every domain exploring IoT, the hospitality companies are planning to integrate advanced analytics to adapt to customer behavior in real time.
Talent management imperative: Challenges in terms of HRM and operational strains are not new to the industry. The connection between staff retention and client satisfaction, combined with high staffing costs, highlights the ever present need for talent recruitment and retention. Adequate training can reduce turnover rates among Indian hoteliers. Hoteliers should consider investing in education that will position them as strong niche players.
Anurag Katriar, Executive Director & CEO, deGustibus Hospitality Pvt Ltd. shares, "In the recent past, several interesting and exciting new domestic concepts have come up and have seen a high rate of success. On the other hand, several international brands have also set up shops in India. This augurs very well for the industry and I believe this trend is here to stay. Growing urbanisation and burgeoning middle class will fuel and sustain this growth. Two distinct market trends are fairly visible; the market is moving more towards casual dining segment and consumption of alcohol is on an upward journey!"
Tarun Gulati, Co-Founder, DJUBO says, “There is fragmentation in every aspect of Indian hospitality. Within hotel tech there is a huge fragmentation with respect to products looking at operations, distribution, marketing on a standalone basis and there is an opportunity to aggregate it. There is fragmentation in sources of revenue - offline revenues are still 70% and online revenues are still below 30%. There is also fragmentation in various problem areas like procurement of ingredients and capital goods. There is also fragmentation in the last mile/ in-destination services like rafting, sightseeing etc on a pan india basis which needs to get aggregated as in-destination services form a huge share of the travellers wallet. Each of these are opportunities for the hospitality industry or startups to try and solve.”
Thus, over the next 12 months, hospitality industry should leverage an increased awareness of customer expectations, re-imagined technology strategy, and differentiated offerings to provide unmatched hospitality experiences.