The 13th Hotel Investment Conference was hosted in Mumbai last month. It addressed trends, developments and the current issues faced in the industry. The travel and tourism industry generated INR 14.1 trillion in 2016, which is equivalent to 9.6% of the GDP of India. It also generated 40.3 million jobs in 2016 and accounted for 9.3% of the total jobs across the nation. A few significant issues from the Conference, have been mentioned below.
A major topic of discussion at the Conference was how to compete with the loyalty programs, it was mentioned that the guests should be approached differently and not through any program. It is the customer experience which will define the success of a property along with the location of the property and the services offered. The ‘Make in India’ concept was appreciated at the Conference, which changed a lot of things in the hospitality industry. The Tier 2 cities are becoming good destinations for the purpose of the business. The trend of OYOs and Airbnb has taken the world by a storm, and it is expected that it will continue in the coming year as well.
The panelists at the session agreed unanimously that it was much easier to do business across other Asian Countries as compared to India because of the policies of the Government. The panelists mentioned that they need to focus on the mid market segment and also required a uniform policy if the numbers need to be improved. Another issue, was the land cost, unless and until the interest rates do not come down, India is going to be left far behind compared to its counterparts. With the huge cost of land, it is difficult for the entrepreneurs to operate in the Country.
The discussion on room rates threw light upon the imbalance of the demand and supply of the rooms across the Country. Although, there are tremendous opportunities in cities like Mumbai, but the utilization of resources will be the only way to gain revenue. Further, the panelists were of the opinion that there is a dearth of sellers since valuation does not match the current performance. Building a hotel is a difficult business due to the extensive paperwork involved. Therefore, it is ideal to sell if there is a favorable opportunity. Getting an approval is an endless game and a time consuming process which is only getting worse year after year. The discussion also mentioned about the lack of importance given to the food and beverage segment. Rooms and other services in a hotel are given much higher importance as compared to food and beverages. Casual dining is on the rise, which means that the hotels need to focus on customers aged between 18-40 years. The presentations need to be attractive and unique. In order to increase the awareness about F&B, a marketing team should be assigned. The sales team for rooms cannot market for the FB segment, a different sales team can do the job efficiently.