News: 'India needs more budget hotels'
(TNN 31/08/2006) Mumbai - Budget hotels should come up in a big way to ensure sustained buoyancy in the travel and hospitality sectors, feels Ajay K Bakaya, executive director of Sarovar Hotels.
Even if capacity in the no-frills segment is expanded ten times in the medium term, it will still be inadequate to growing demand, he said in an interview to G Ganapathy Subramaniam. Excerpts:
What are the constraints hampering sustained buoyancy in tourism?
The primary constraint is infrastructure. We do not have adequate number of quality hotel rooms, available at affordable rates. Domestic tourism is growing at around 40% and there is an urgent need to offer more capacity in the budget hotels segment.
There is no need for frills but basic facilities should be available at reasonable rates and decent quality should be maintained. Even if capacity in this segment is multiplied 10 times, it will still be inadequate.
This segment has recently seen a major boost due to the arrival of low-cost airlines. It is this segment which is going to ensure sustained buoyancy in the long-term. Of course, a large section of foreign tourists also look for facilities which are not five-star.
Is the demand for budget hotels restricted to some cities alone?
The demand for no-frills hotels exists all over the country. In any case, hotel rooms are not available in key cities like Delhi and Bangalore even during the non-peak periods.
The situation would only worsen in view of the Commonwealth Games scheduled to take place in Delhi by 2010. Other cities like Hyderabad, Pune and Kochi are also booming.
Same is the case with tourist destinations like Rajasthan and Goa. We believe that clean rooms, quality food and basic facilities at a reasonable price will be a big attraction.
What should the government do to boost growth?
Taxation should be reasonable and the government should ensure that infrastructure is built. Water, electricity, roads, air traffic and telecommunication are critical areas.
Hotels now face water shortage in every hill station including Shimla and Mussourie. They buy water supplied by tankers. While the industry is trying to bring tariffs down, high taxes and lack of infrastructure is only adding to the burden.
I have been in the hospitality industry for the past 25 years, handling various assignments including postings in the UK, Australia, France and South Africa. The huge demand which we see now in India is unparalleled. We should not let this opportunity go.
What’s the reaction of hotels?
We are witnessing a lot of interest among investors. A large number of projects are coming up in various parts of the country. Sarovar Hotels has launched the Hometel brand which provides value for money.
The first Hometel is operational in Bangalore and we provide decent facilities at affordable prices.
Apart from central air-conditioning, wi-fi connectivity and direct-dial phone facilities, our concept of budget hotels provide a vibrant setting and useful facilities like coffee/tea makers, and mini refrigerators.
The response to this concept has been good and new Hometels are coming up in Mumbai, Jaipur and Hyderabad.
Are you focusing only on this segment?
We have a diversified basket which includes indigenous brands like Sarovar Premiere in the 5-star category and Sarovar Portico in the 3-star and 4-star categories.
We are also the franchisee in India for Park Plaza and Park Inn brands. Hometel was in news recently since two private equity firms are investing Rs 38 crore in Sarovar and we are promoting this new concept aggressively.
We now manage 35 hotels in India and the retention rate is high. The local partners do the necessary investment and we handle the management.
How are you coping with rapid expansion of the hotel industry?
While investments are pouring in, it is becoming difficult to hire and retain quality manpower. Chefs and smart people of man front-office are not easy to find.
Same is the case with various other categories including those who handle service at restaurants. We train youngsters and device incentives to retain talent.
Even if capacity in the no-frills segment is expanded ten times in the medium term, it will still be inadequate to growing demand, he said in an interview to G Ganapathy Subramaniam. Excerpts:
What are the constraints hampering sustained buoyancy in tourism?
The primary constraint is infrastructure. We do not have adequate number of quality hotel rooms, available at affordable rates. Domestic tourism is growing at around 40% and there is an urgent need to offer more capacity in the budget hotels segment.
There is no need for frills but basic facilities should be available at reasonable rates and decent quality should be maintained. Even if capacity in this segment is multiplied 10 times, it will still be inadequate.
This segment has recently seen a major boost due to the arrival of low-cost airlines. It is this segment which is going to ensure sustained buoyancy in the long-term. Of course, a large section of foreign tourists also look for facilities which are not five-star.
Is the demand for budget hotels restricted to some cities alone?
The demand for no-frills hotels exists all over the country. In any case, hotel rooms are not available in key cities like Delhi and Bangalore even during the non-peak periods.
The situation would only worsen in view of the Commonwealth Games scheduled to take place in Delhi by 2010. Other cities like Hyderabad, Pune and Kochi are also booming.
Same is the case with tourist destinations like Rajasthan and Goa. We believe that clean rooms, quality food and basic facilities at a reasonable price will be a big attraction.
What should the government do to boost growth?
Taxation should be reasonable and the government should ensure that infrastructure is built. Water, electricity, roads, air traffic and telecommunication are critical areas.
Hotels now face water shortage in every hill station including Shimla and Mussourie. They buy water supplied by tankers. While the industry is trying to bring tariffs down, high taxes and lack of infrastructure is only adding to the burden.
I have been in the hospitality industry for the past 25 years, handling various assignments including postings in the UK, Australia, France and South Africa. The huge demand which we see now in India is unparalleled. We should not let this opportunity go.
What’s the reaction of hotels?
We are witnessing a lot of interest among investors. A large number of projects are coming up in various parts of the country. Sarovar Hotels has launched the Hometel brand which provides value for money.
The first Hometel is operational in Bangalore and we provide decent facilities at affordable prices.
Apart from central air-conditioning, wi-fi connectivity and direct-dial phone facilities, our concept of budget hotels provide a vibrant setting and useful facilities like coffee/tea makers, and mini refrigerators.
The response to this concept has been good and new Hometels are coming up in Mumbai, Jaipur and Hyderabad.
Are you focusing only on this segment?
We have a diversified basket which includes indigenous brands like Sarovar Premiere in the 5-star category and Sarovar Portico in the 3-star and 4-star categories.
We are also the franchisee in India for Park Plaza and Park Inn brands. Hometel was in news recently since two private equity firms are investing Rs 38 crore in Sarovar and we are promoting this new concept aggressively.
We now manage 35 hotels in India and the retention rate is high. The local partners do the necessary investment and we handle the management.
How are you coping with rapid expansion of the hotel industry?
While investments are pouring in, it is becoming difficult to hire and retain quality manpower. Chefs and smart people of man front-office are not easy to find.
Same is the case with various other categories including those who handle service at restaurants. We train youngsters and device incentives to retain talent.
posted by InCar Group Press Room at 20:55
1 Comments:
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