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Volume 1. Issue 9. October 2012. Rs 50

all about hotels & hospitality

Indian pilgrim cities need more branded hotels Indian hoteliers eye expansion overseas Significance of promoting art and culture in the hospitality industry

Grand Hyatt Mumbai

Future trends in revenue management that will help hoteliers maximise revenue

Shopping arcades add to the business of hotels


contents/editorial Volume 1  Issue 9  octoBER 2012

editor’s note

Hotels have been traditionally the big patron of the arts and have always strongly promoted art and culture. In India, right from the days when The Akbar opened, in the early 70s and then followed by iconic properties like ITC Maurya, in late 70s. The Taj Group has been one leading mainstay of the arts, in their prime properties in Mumbai, Delhi and Chennai. A more recent innovation has hotels organising art and cultural events to mark the launch of new properties or to celebrate the completion of a year and some such event. These events are organised on a large scale and garner extensive PR value through media coverage. This prompted us to talk to a few hoteliers to find out how it helps them to organise such art exhibitions. The answer lies in our ‘Forum of the month.’ Another trend that you would have seen is the ever increasing presence of super luxe shopping arcades at five star hotels that not only draw in the crème-dela-crème of society, but also contribute significantly to the hotel’s business. Read more about this in our ‘Trends’ section. Other features include Indian hoteliers eyeing overseas markets for expansion, pilgrim cities being in dire need of more branded hotels, and the potential of the wellness sector that hoteliers must tap into. We bring you the latest hotel openings across the country and international ones like the grand opening of Sheraton Macao Hotel, for which the Starwood team in India flew out a large contingent of media; important developments and movements in the hospitality industry; and an exhaustive industry interview with Mandeep Singh Lamba of Ten Hotels and Hospitality Solutions on signing a joint venture with a UK based hospitality firm. Besides, we continue to provide other industry news and updates. Do write to us with your feedback.

New developments

4 Puneet Chhatwal is first Indian CEO of an international hospitality chain

5 Vivek Nair returns as president FHRAI, this time from the South

New hotels

6 The grand opening of Sheraton Macao Hotel

10 Banyan Tree Kerala will launch next year 12 Park Hyatt opens in Chennai

News flash

14 Hilton Worldwide announces 2011 LightStay sustainability results 16 Accor celebrates another record year in Asia Pacific

One-on-one

20 Ten Hotels signs JV with UK based hospitality firm

Discussion

24 The mid-segment hotels need the right positioning

Pilgrimage tourism

28 Indian pilgrim cities are in dire need of more branded hotels

readers write in The feature on ‘10 most dynamically designed fine dining world restaurants’ was truly outstanding, in terms of the restaurants of the world the feature introduced us to, as well as the beautifully laid out pictures. I suggest you carry more of such features in your forthcoming issues. Rina Walia, New Delhi The article on ‘A case study on how to start a hotel today’ was very informative, in terms of the statistics and logistics it provided for a new start-up. Such industry articles are much relevant to us. Rahul Singh, Mumbai

Medical & wellness tourism

30 Hotels must tap into the wellness segment

Forum of the month

32 Significance of art and culture for hotels

Report

38 Performance of hotels across major Indian cities 48 50,000 hotel rooms in top six cities in the next five years

Trends

52 Shopping arcades add to the business of hotels Editor: Navin S Berry  Assistant Editor: Manisha Almadi Midha  Business Development: Sudhir Sood Advertising: Saurabh Shukla  Design: Ashok Saxena, Neelam Aswani Hotelscapes is published and printed monthly by Navin Berry on behalf of Cross Section Media Pvt. Ltd. and printed at Anupam Art Printers B-52, Naraina, Phase II, New Delhi and published from IIIrd Floor, Rajendra Bhawan, 210, Deen Dayal Upadhyay Marg, New Delhi - 110002. Tel: 91-11-43784444; Fax: 91-11-41001627, 41001628. E-mail: info@crosssectionmedia.com This issue of Hotelscapes contains 72 pages plus 4 pages cover

Destination

56 Indian hoteliers eye expansion overseas

Guest column

36 Future trends in revenue management October 2012 hotelscapes

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new developments

Puneet Chhatwal is first Indian CEO of an international hospitality chain Indians have made it big in international banks, in IT and in many other spaces in the global corporate world. The first big ticket announcement in the hospitality vertical, much awaited for a long period, is that of Puneet Chhatwal who has been appointed CEO of Steigenberger Hotels AG.

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teigenberger Hotels AG have announced the appointment of Puneet Chhatwal, 48 years old, as the new Chief Executive Officer (CEO) of the Management Board. From January 1, 2013 onwards and together with Chief Financial Officer (CFO) Matthias Heck, Chhatwal will hold responsibility for the hotel business, based in Frankfurt/Main. Chhatwal is a New Delhi born professional with a proven track record in the hospitality business both in India and overseas. Having completed a Bachelor’s Degree at the University of Delhi and a diploma in Food Service and Hotel Management, Chhatwal started his career with ITDC in New Delhi. After several operational positions in India, he studied at IMHI (ESSEC), Paris and earned a Master’s Degree in 1991 in International Hospitality Management. In 2012, he completed the Advanced Management Program (AMP) at INSEAD Business School in Fontainebleau. Chhatwal is a Fellow of the Institute of Hospitality (FIH). After gaining valuable insights and experience in hotel consulting and project development, Chhatwal joined Carlson Hotels Worldwide in 1998, where he was responsible for the development of the group’s brands in Europe, the Middle East and Africa. Since 2002, he has been responsible for Corporate Business Development at the Rezidor Hotel Group in Brussels. As Chief Development Officer (CDO) he became a member of the Executive Committee in 2007. During his tenure at Rezidor, the group grew from 150 properties to the current level of 435 hotels, including brands such as Radisson Blu, Park Inn by Radisson, Hotel Missoni and Regent. “With his worldwide experience in top international hotel development and management, Chhatwal will give decisive stimuli for growth of Steigenberger and systematic orientation of operating management to achieve the goals of our corporate strategy”, said Dr Ralf Corsten, Chairman of the Supervisory Board of Steigenberger Hotels AG. Steigenberger Hotels AG is one of Europe’s leading hotel companies. The group operates 80 hotels in Germany, Austria, Switzerland, the Netherlands and Egypt, with its two brands Steigenberger Hotels and Resorts (47 individual first-class and deluxe hotels) and InterCityHotel (33 midrange hotels located directly at transport hubs such as railway stations and airports). ■ 4

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new developments

Vivek Nair returns as president FHRAI, this time from the South FHRAI has a president every year from one of the regional associations which make up the federation at the national level. This year, it was the turn of the South to propose and elect the president. Vivek Nair makes a comeback as president after almost a decade.

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ivek Nair, Vice-Chairman & Managing Director of Hotel Leelaventure Limited, has been elected as president of FHRAI for 2012-13. One of India’s most accomplished and respected hoteliers, Nair had previously served as the FHRAI president in 2003-04. He has also been a past president of the Hotel & Restaurant Association of Western India (HRAWI) and the South India Hotels & Restaurants Association (SIHRA). On being elected as president, Nair said, “I regard this opportunity to once again lead a venerable organisation such as FHRAI, particularly at this pivotal and exciting phase for our industry, as both a distinct privilege and a profound responsibility. My team and I are deeply committed to assiduously working towards ensuring that FHRAI continues to grow from strength to strength and consistently deliver on the high expectations of all our stakeholders.” The new FHRAI President has been highlighting the tourism sector’s vast intrinsic potential to act as a catalyst for generating large-scale employment and promote equitable and inclusive economic growth. As per the report of the Planning Commission’s Working Group on Tourism, the sector will directly support about 63.79 lakh jobs by 2016-17. WTTC estimates that the travel, tourism and hospitality sector will contribute 6.5 per cent of India’s total GDP in 2012. Nair has been pointing out that the Indian hotel industry is poised to commit a capital investment of Rs 1,27,600 crores to bridge the projected shortfall of over 1,80,000 rooms in the country over the next decade. He has been urging the government to facilitate a progressive and conducive policy framework for enabling the industry to viably undertake this massive additional investment. This includes granting ‘infrastructure’ status to the sector as a whole, by removing the restrictive stipulation presently prescribed in the Harmonised List of Infrastructure Sub-Sectors. He has also been requesting all state governments to accord the sector ‘industry’ status, so that hotels become entitled to industrial rates on inputs such as power, water etc instead of paying commercial tariff. Nair has been advocating that each state must constitute an empowered Hospitality Development and Promotion Board (HDPB) under the Chairmanship of their Chief Secretaries, to serve as an effective single window mechanism and fast-track projects. In view of the acute scarcity and exorbitant price of land in metro cities, he has been asking for a liberalisation of FSI/FAR norms and to be informed about FHRAI’s detailed submission in this regard to the Ministry of Urban Development during consultations for DDA’s MPD-2021. “It is imperative to rationalise the industry’s complex multiple taxation structure, which has the cumulative impact of putting our country at a distinct competitive disadvantage as

L-R: Vivek Nair and Kamlesh Barot

an international tourist destination vis-a-vis our South-East Asian peers. Hotels and restaurants should be included in the negative list for service tax and a uniform rate of luxury tax introduced, applicable only on actual and not published tariff,” Nair has been championing. The FHRAI President believes we need to diversify our tourism product portfolio, in order to successfully attract more tourists from newer geographies. This would be vital for us to achieve the Ministry of Tourism’s ambitious target of increasing India’s share in the global tourism market to at least 1 per cent within the 12th Plan Period. He has been illustrating his view by calling for a relaxation in CRZ norms which are inhibiting the growth of beach-front hotels and resorts and constraining our ability to leverage the full potential of India’s coastal tourism. “We also need concerted efforts by the industry and government to tap the lucrative MICE segment. A greater emphasis must be laid on forging innovative public-private partnerships to address a wide range of complex challenges confronting the sector, particularly capacity-building for skill development and alleviating infrastructure bottlenecks,” says Nair. At the first meeting of the new FHRAI Executive Committee held at New Delhi, the following office-bearers for the year 201213, were also elected: Honorary Secretary – Vijai Pande Vice President – DS Advani Vice President – Garish Oberoi Honorary Treasurer – SM Shervani Joint Honorary Secretary – Jose Dominic Joint Honorary Secretary – Bharat Malkani ■ October 2012 hotelscapes

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new hotels

Sheraton Macao Hotel: Asia’s new MICE destination Sheraton Macao Hotel, Cotai Central is the second Starwood hotel to open in Macau, a leading destination for leisure, meetings, incentives and entertainment. We bring you the complete story.

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heraton Macao Hotel, Cotai Central is the newest addition to luxury in Macau. There’s no dearth of highend hospitality in Macau. Every corner is home to a sky-piercing tower that glimmers in incandescent lighting... there’s a reason why Macau is known to be Asia’s own shiny Las Vegas. The party never stops come rain or shine – and it doesn’t matter if the place is about 30 sq km, about three quaint islands put together.

The inaugural ceremony To add to this world of glamour, September 2012 saw the opening of Sheraton Macao Hotel, Cotai Central. And Starwood Hotels celebrated in unmatched style.

Dilip Puri

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The sky was set ablaze with a streak of dazzling lights, the wine poured non stop, the hotel staff smiled uncontrollably, the guests shrieked with joy and the larger-than-life property complete with numerous shopping brands, dramatic interiors, fine dining havens, cafes, casino, lounge bars – opened its doors for those who like the high life. And the high life here is nestled within Sands Cotai Central. Sheraton Macao Hotel enjoys an enviable position with instant access to over 100 world-class retail stores, live entertainment and more. Located on Macau’s bustling Cotai Strip, the nearly 4,000-room Sheraton is the largest hotel in Starwood’s global portfolio and the largest in Macau. 


Gliding along the many pathways, there surfaced an air of sophistication from its imposing interiors that reflected an amalgamation of oriental elements along with flavours from the whole world. Spread over two towers, known as Sky and Earth, the design although functional inclines more towards dramatising the space. The hotel’s made a massive entry considering its giant size: it is home to the world’s largest Sheraton Club Lounge, and the main ballroom can accommodate as many as 11 basketball courts. What’s

more, the hotel sprawls out more than 160,000 sq ft of meeting space, three signature restaurants, and three outdoor pools with poolside cafes. By the tranquil poolside, as you crane your neck to absorb the soaring magnitude of Sheraton Macao, a layer of sheen envelops the structure. Every detail has luxury ingrained deep in it. At the main ballroom, amidst much frenzy during the inaugural ceremony, Sheldon Gary Adelson, chairman, Las Vegas Sands and Sands China Ltd. spoke to a jeering crowd. “We proudly welcome the

world-renowned Sheraton brand to the Sands Cotai Central integrated resort. The development of the Cotai Strip, from a muddy swampland to the glittering centre of tourism and leisure that stands before us today, represents a vision realised for the company.” Sheraton currently operates 95 hotels in Asia Pacific. The hotel serves up a perfect getaway for holiday, shopping and luxury enthusiasts. Set over two towers, Sheraton Macao Hotel is the epitome of modern design and welcoming sophistication. The Hotel offers the ideal location October 2012 hotelscapes

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new hotels

for guests to explore everything in the heart of Macau’s bustling entertainment and leisure area. In all the things in this Hotel, perhaps most impressive is the construction and staffing of Sheraton Macao Hotel.   The international staff speaks 19 languages, including Mandarin, Cantonese, English, German, French, Italian, Vietnamese, Thai, Taiwanese, Japanese, Korean, Spanish, Mexican, Portuguese, Dutch, Swedish, Russian, Indonesian and various Chinese dialects. The Sheraton Macao Hotel team travelled nearly 10,000 miles to personally interview over 5,000 associates and managers. It has been a

remarkable undertaking to create the world’s largest Sheraton – a real labour of love.

Effects on the Asian market Macau is touted as the ideal getaway for business enthusiasts travelling to Hong Kong. Apart from leisure, Macau is also witnessing growth in terms of the MICE sector. The opening of this flagship Sheraton, one of the world’s most recognised hotel brands, combined with the rapid tourism growth Macau has experienced in both the leisure and MICE sectors in recent years will firmly cement Macau’s position as sig-

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nificant player in the global travel market.  Sheraton Macao Hotel is set to transform Macau into Asia’s leading MICE destination. With the large and versatile meeting spaces and extensive room inventory, the possibilities for how the venues can be used are endless.  Despite the size, the hotel is keen to reach out not only to big meetings but also to small intimate groups and that is why there is a team of event experts, who will ensure that every group feels exclusive and well looked-after. Its easy accessibility, rich cultural identity and vast entertainment options are defining Macau as the world’s gathering place.

o light its 3,863 guest rooms, Sheraton Macao Hotel has to purchase and install 90,796 light bulbs, which is more than four and a half times the total number of light bulbs to light the Eiffel Tower. The hotel has more than 12,000 square meters of outdoor pools equivalent to 7,000 people lying down side-by-side. Sheraton’s Shine Spa—the largest Shine Spa in Asia Pacific will use 1,371 litre bottles of massage oil per month and pour 7,800 cups of Shine Elemental tea each month. Sheraton Fitness expects guests to cover 12,000 km on its treadmills each month, the equivalent of a person running from Los Angeles to Macau or covering the Great Wall of China 1.35 times. To cool off those runners, Sheraton Fitness staff expects to distribute 16,800 cold face towels. So all in all it’s huge.

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hotelscapes October 2012


new hotels

On the occasion of the Hotel launch, Hotelscapes spoke to Dilip Puri, managing director India and regional vice president, South Asia, Starwood Hotels and Resorts. Excerpts from the interview: Sheraton Macao Hotel, Cotai Central launched in a grand way this September. Please share with us your thoughts about the property.

for the same quality and experience in India.

The largest Hotel in Starwood’s worldwide portfolio as well as the largest Sheraton in the world, the Sheraton Macao Hotel is an oasis for families, friends and celebrations in the middle of bustling Macau. With signature Sheraton service and an emphasis on personalisation, Sheraton Macao Hotel offers a new way of enjoying one of China’s most storied modern cities. As a full-service hotel with an emphasis on hospitality and unique amenities, the Sheraton Macao Hotel, Cotai Central is a catalyst for the transformation of Macau from Asia’s gaming centre into an all-round travel destination for a variety of audiences including families and leisure travellers as well as business conferences and special events. It is a significant addition to Starwood’s portfolio and a milestone for the Sheraton brand that is celebrating its 75th anniversary year.

For Asia again it reinforces the strength and power of Starwood and its compelling portfolio of lifestyle brands. We see it as one of our key openings for the year and a significant addition to our portfolio.

Sheraton Macao is the largest Starwood Hotel in the world. What does it imply on the Indian market? Strategically this is an important opening in Starwood’s development journey and reinstates our ability to open and manage world class Hotels of this scale and size. It also reinforces the strength and power of the Sheraton brand itself. For India it opens up opportunities for out bound travel both for leisure as well as MICE. As more and more Indians travel to these destinations and experience our brands, they will become familiar with our brands and look

What does it mean for the Asian market?

Does Sheraton Macao Hotel, Cotai Central have any special operations to appease the Indian traveler? India is a key source market for Macao both for leisure and MICE and as such the team at the Hotel understands the expectations of the Indian customer and has been sensitised to their unique needs. We have Indians who are working at the Hotel including an Indian chef and a sales specialist to handle business for India. Starwood is a company that is easy to do business with and as such the Hotel team is geared up to adapt and accommodate the needs from this market and deliver to their expectations.

Any plans to have more Starwood operations in India & Asia? India is currently Starwood’s fourth largest market and is comfortably poised to soon become its third. We currently have 35 Hotels operating in India with 24 in the pipeline and our goal is have a 100 hotels operating, management contracts signed or under development by 2015. India is Starwood’s second fastest growing market after China. ■ by Chesta Trehan

October 2012 hotelscapes

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new hotels

Banyan Tree Hotels & Resorts announce first property in Kerala Banyan Tree Kerala will mark the launch of the group’s first hotel in India.

B Srikant Peri hotel manager, Banyan Tree kerala

Banyan Tree Kerala will be unique in several ways, from being the only resort on a private island in Kerala to its all-pool villa concept and boat-up lobby and check-in. 10

hotelscapes October 2012

anyan Tree Hotels & Resorts have announced the launch of Banyan Tree Kerala in the first quarter of 2013. The resort’s debut marks the first property in India for award-winning Banyan Tree Group. Notable for its unique setting on a private island in the backwaters of Southern India’s most iconic state, Banyan Tree Kerala is an all-pool villa retreat from which to explore the traditions and daily rhythms of a bygone era. “ We a re lo ok ing for wa rd to t he launch of Banyan Tree Kerala in 2013 with great enthusiasm. We are keenly focused on establishing this new resort within the luxury segment and positioning our flagship property in India to a discerning clientele. Our legacy of gracious and detail-oriented service and signature design elements will appeal to an evolved urban audience. Banyan Tree Kerala will be unique in several ways,

from being the only resort on a private island in Kerala to its all-pool villa concept and boat-up lobby and check-in,” says Srikant Peri, hotel manager, Banyan Tree Kerala. Located on the private island of Nediyathuruthu in the Alleppey district of Kerala, Banyan Tree Kerala is an hour south of Kochi International Airport and a 10-minute boat ride from the resort’s private jetty in nearby Vaduthala. Framed by the palm-lined picturesque backwaters for which Kerala is renowned, the resort offers an idyllic setting to discover the beaches, canals, lush tropical greenery and Ayurvedic therapies that have garnered the state a high ranking on countless “must see destinations” lists around the world.  The Banyan Tree Group manages and has ownership interests in 30 resorts and hotels, over 60 spas and 80 retail galleries; as well as two golf courses. ■


October 2012 hotelscapes

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new hotels

Park Hyatt opens in Chennai This makes it the 30th hotel in the Park Hyatt portfolio.

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yatt Hotels Corporation (NYSE: H) announced the opening of Park Hyatt Chennai, marking the 30th hotel in the Park Hyatt collection and the first Park Hyatt hotel to be introduced in the city of Chennai, known as the gateway to Southern India. Designed as a serene and tranquil retreat for the astute business traveller, Park Hyatt Chennai is located next to the prestigious governor’s residence and is also adjacent to the thriving green area of the Guindy National Park. A 15-minute drive from the city’s domestic and international airport, Park Hyatt Chennai enjoys close proximity to the new developments of OMR (Old Mahabalipuram Road), Sriperumbudur and the Guindy

industrial estate. “The opening of Park Hyatt Chennai is a great day of pride for us,” said Yann Gillet, GM, Park Hyatt, Chennai. “The hotel is truly a reflection of this great city, with the art and design thoughtfully encompassing Indian heritage and culture. We’re thrilled to join the Park Hyatt portfolio as the 30th hotel and look forward to providing guests with an ambience of sophistication with service that is gracious and truly personalised.” Peter Fulton, MD, Hyatt International– South West Asia added, “we are proud to expand the Park Hyatt brand in India with the opening of Park Hyatt Chennai, which joins the newly opened Park Hyatt Hyderabad, as well as Park Hyatt Goa Resort and Spa. This opening is reflective of the thoughtful growth we’re experiencing in India, as well as the growth of the brand in destinations that will ultimately build customer preference.”

Features of the hotel: Design and guestrooms

Yann Gillet GM, Park Hyatt, Chennai

We’re thrilled to join the Park Hyatt portfolio as the 30th hotel and look forward to providing guests with an ambience of sophistication with service that is gracious and truly personalised.

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hotelscapes October 2012

Park Hyatt Chennai features 201 luxury guestrooms, including 20 indulgent suites, all thoughtfully designed to create an inviting environment and contribute to the understated sophistication and mood of the hotel. Rich travertine marble floors and plush hand-tufted rugs are luxuries found in every guestroom, along with polished marble bathrooms with deep-soak bathtubs. In addition, all suites feature exquisite, relaxing stone plunge tubs. The hotel embraces the serenity of the surrounding Guindy National Park with flowing landscapes and relaxing interiors, complemented by a graceful lily pond dotting the heart of the inner courtyard of the hotel. The elegant and chic interiors create a unique, luxuriant and calming ambience, reflecting the quiet and refined side of Chennai. The hotel also showcases beautiful, custom-made art installations that

have been curated around the concept of Indian textiles and heritage. The impressive series of installations have been set up to not just lend a distinct character to the spaces, but also to enhance and create an unparalleled guest experience that is synonymous with the Park Hyatt brand.

Dining Park Hyatt Chennai offers an array of epicurean tastes and experiences in a wonderfully sublime setting at The Dining Room. Overlooking the beautiful lily pond, guests can enjoy convenient, allday dining, which features traditional South Indian cuisine alongside European bistro favourites. In early 2013, Park Hyatt Chennai will be home to an exciting new dining extravaganza, The Flying Elephant. This unique speciality restaurant will mark an important addition to the city’s fastgrowing culinary landscape, offering


new hotels

rate areas for cardio and strength training, alongside a yoga studio. The fitness centre also features hot and cold plunge pools and steam and sauna facilities.

Meetings and events – The Apartment

diners a selection of exotic cuisines in an awe-inspiring ambience.

Recreation Designed as a contemporary oasis of wellness and rejuvenation, Antahpura spa offers guests a blissful refuge from the strains of modern lifestyle. The urbane and relaxing interiors of this city spa feature six treatment rooms that overlook

the tranquil greenery of the national reserves of Guindy. Spa treatments at Antahpura have been inspired by legendary therapies from the illustrious lineage of Chettinad. Indigenous herbs and primordial beauty and wellness practices have been adapted to recreate a holistic spa experience for guests. Park Hyatt Chennai offers a fully equipped fitness centre, Sphere with sepa-

The Apartment at Park Hyatt Chennai offers more than 8,000 sq ft (743 sq m) of versatile and innovative meeting and event space. The hotel’s state-of-the-art meeting facilities offer the chance to conduct impeccable meetings in stylish surroundings. An open kitchen demonstrates the skills of the hotel’s winning team of chefs, imparting a true, individual style at this novel, concept-driven event facility.  To learn more about Park Hyatt Chennai and the inspiration behind the hotel’s design, please visit http://bit.ly/OnLX4R. Reservations for Park Hyatt Chennai may be made by calling 044-7177 1234 or visiting www.chennai.park.hyatt.com. ■ October 2012 hotelscapes

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news flash

Hilton Worldwide announces 2011 LightStay sustainability results Hilton Worldwide has achieved waste goal within three years and has more than doubled savings to US $147 million.

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ilton Worldwide announced the 2011 results of LightStay, the company’s proprietary sustainability measurement system. Overall, the programme has been a tremendous success with over US $147 million in cumulative savings from efficiency projected for hotels reporting through LightStay. Additionally, Hilton Worldwide has achieved its five-year goal to reduce total waste output by 20 per cent, a full two years ahead of schedule. The company also reports it is on track to reduce energy consumption and CO2 emissions by 20 per cent, and water consumption by 10 per cent. Since the

Christopher J Nassetta president and CEO, Hilton Worldwide

LightStay provides us with a global platform to respond to the challenges of managing natural resource constraints, and Hilton Worldwide is dedicated to empowering our property owners and operators with tools that improve economic and sustainability performance. 14

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introduction of LightStay, the company has reduced its: l Carbon output by 10.9 per cent l Waste output by 23.3 per cent l Energy use by 9.7 per cent l Water use by 7.5 per cent “Sustainability is an increasing focus across all our brands and is critical to the operations of our business,” said Christopher J Nassetta, president and chief executive officer, Hilton Worldwide. “LightStay provides us with a global platform to respond to the challenges of managing natural resource constraints, and Hilton Worldwide is dedicated to empowering our property owners and operators with tools that improve economic and sustainability performance at all levels of our company.” As the first major multi-brand hospitality company to make sustainability measurement a brand standard and require performance against sustainability goals, Hilton Worldwide completed the adoption of LightStay across the company’s more than 3,900 properties in 91 countries in 2011 and is now tracking more than 450,000,000 square feet of build space within the system – an amount greater than all the office spaces in New York City and ten times all hotel rooms in Las Vegas. The company also recently integrated the Hotel Carbon Measurement Initiative (HCMI) 1.0 methodology spearheaded by the International Tourism Partnership (ITP) and World Travel & Tourism Council (WTTC) into LightStay and can be applied to any of its properties worldwide if requested. As part of the LightStay Meeting Calculator, Hilton Worldwide also can provide customers with real-time data on food, travel and operational practices for any of its properties. Every brand and hotel globally is required by brand standards to measure and make continual improvements to their

Crystal lounge, Hilton Mumbai International Airport

overall sustainability results as part of LightStay, and, to support these efforts, the system includes a ‘social network’ dashboard that allows properties from around the world to ‘neighbour’ one another and share information, dialogue on a topic or compare respective performance. To date, Hilton Worldwide has nearly 2,000 ‘neighbours’ in LightStay and more than 5,000 improvement projects that highlight different approaches to common sustainability challenges. For example, Hilton Americas–Houston hotel converted to using biodiesel as a preferable fuel, allowing the hotel to recycle


news flash

King Hilton guest room, Hilton Chennai

14,000 pounds of kitchen oil and divert seven tons of oil-based food waste from landfills. In South America, the DoubleTree guest suites by Hilton Paracas-Peru uses a wastewater reclamation plant that is independent of the area sewage system and cleans wastewater to a quality that can be used for watering the hotel’s garden areas, and, in Europe, Hilton Malta uses sea water to cool its air conditioning system. As a result of the 2011 LightStay results, Hilton Worldwide maintains its ISO 14001 certification for environmental management systems, which continues to be one of the largest ever volume certifi-

cations of commercial buildings. DEKRA Certification, Inc. performs ongoing annual audits to assess the LightStay data and monitor compliance. Hilton Worldwide is recognised for its leadership in sustainability by various organisations such as the US Environmental Protection Agency, US Chamber of Commerce’s Business Civic Leadership Center and more as a result of its achievements including: l Partnering with Global Soap Project to recycle more than 17,000 pounds of soap that has been reprocessed into over 68,000 bars to help prevent diarrheal dis-

ease and pneumonia among vulnerable populations in developing countries. l Implementing Good 360 to allow the company’s 3,900 hotels to donate goods to more than 2,000 organisations in need globally resulting in an estimated value of over US $5.5 million for community partners. l Launching the Center for Sustainable Procurement (CSP) to help global business procurement managers integrate sustainability into their purchasing decisions – providing a unique set of research and information that will help make sense of the increasingly available product sustainability data. l Creating the Hilton LightStay Sustainability Award in partnership with the Sundance Institute to provide a platform for filmmakers to tell stories to catalyse change and elevate dialogue around critical global issues; and l Purchasing over 450 million kilowatt hours of green power over the last few years, and in 2012 this was enough to meet 94 per cent of the company’s annual electricity use in the US and rank as a top ten purchaser of renewable energy. Hilton Worldwide’s efforts to continuously improve its economic and sustainability performance align with the company’s commitment to Travel with Purpose to create shared value for its business and communities around the world. Launched in 2011, Travel with Purpose is built on four areas of focus creating opportunities for individuals to reach their full potential; strengthening communities where we operate; celebrating cultures and the power of travel; and living sustainably through the measurement, analysis and improvement of our use of natural resources.

About LightStay LightStay is a proprietary system deve lop e d to c a lc u late a nd a n a l y se sustainability performance. LightStay measures multiple utility and operational metrics such as (but not limited to) energy, water, carbon, housekeeping, paper product usage, waste, chemical storage, air quality and transportation. In addition, LightStay provides social networking tools that allow properties to communicate and share information, and features a ‘meeting impact calculator’ element. ■ October 2012 hotelscapes

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news flash

Accor celebrates another record year in Asia Pacific Group opens over 110 new Asia Pacific hotels in 2012; adds around 100 additional hotels to development pipeline, and is on track for 700 hotels by 2015.

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ccor reaffirms its market leadership in Asia Pacific, as the region’s largest international hotel operator and celebrates another year of record-breaking expansion. During 2012 Accor will add over 110 hotels across all segments, ranging from luxury to economy to its network in the region. Speaking at the Hotel Investment Conference Asia Pacific (HICAP) in Hong Kong, Michael Issenberg, chairman and chief operating officer, Accor Asia Pacific, further announced that the group has signed nearly 100 new projects to Accor’s committed development pipeline this year, putting Accor on track to operate 700 hotels in Asia Pacific by 2015.

Michael Issenberg chairman and COO, Accor Asia Pacific

What started with one hotel in Singapore in 1982 has grown into an extensive network of over 540 properties that continues to grow We are well on track to achieving our target of operating 700 Asia Pacific hotels by 2015. 16

hotelscapes October 2012

“2012 has been yet another banner year for Accor in Asia Pacific, shattering the expansion record that was set in 2011,” said Issenberg. “Our success this year underscores the continued opportunities for growth in Asia Pacific and the growing importance for the group globally.” The group today operates 540 properties with over 100,000 guest rooms in Asia Pacific and expects to end the year with a network of 565 hotels. Accor has expanded across all segments with a number of exciting ‘firsts’ in 2012. Sofitel, for instance, opened its first property in India, with Sofitel Mumbai BKC, and introduced the Sofitel So brand in the region, with the opening of Sofitel So Bangkok. Pullman opened its 14th hotel in China with Pullman Anshan Time Square positioning the country as the brand’s largest market worldwide and entered new markets – India and New Zealand for the first time. In February, Accor launched

Mei Jue, the upscale Grand Mercure brand tailor-made for Chinese travellers with an ambitious goal of opening 60 properties by 2015. And the Ibis brand family (Ibis, Ibis Styles and Ibis Budget) is reaching new markets during 2012, entering Vietnam, Malaysia and Japan for the first time with Ibis Saigon South, Ibis Styles Kuala Lumpur Fraser Business Park and Ibis Tokyo Shinjuku, respectively. “The timing of this record-breaking expansion is ideal, as we celebrate 30 years of Accor in Asia Pacific,” continued Issenberg. “What started with one hotel in Singapore in 1982 has grown into an extensive network of over 540 properties that continues to grow. I’m proud of what we have achieved over the last three decades and I am positive in my outlook for the future of the group in this dynamic region. We are well on track to achieving our target of operating 700 Asia Pacific hotels by 2015.”  ■


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tourism news

ITDC achieves a turnaround and records profits

As ITDC enters into 47th year of its glorious journey, the corporation renews its commitment of accomplishing its vision and mission to become a vibrant tourism development corporation and implement and operationalise the initiatives of the Ministry of Tourism.

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ndia Tourism Development Corporation (ITDC), the public sector undertaking under the aegis of the Ministry of Tourism, conducted its 47th Annual General Meeting at the group’s flagship hotel, The Ashok, New Delhi. The corporation closed the year with an all round increase in the performance as compared to the previous financial year. The turnover of the corporation has increased from Rs 392.36 crore to Rs 423.06 crore registering an increase of 7.82 per cent. After suffering losses in the past two consecutive years, 2009-10 and 2010 11, the corporation has earned profits. Against a loss of Rs 11.73 crore (before tax) during 2010-11 and a loss of Rs 20.51 (before tax) during 2009-10, the corporation has earned a profit of Rs 22.02 crore (before tax). There has been consistent improvement in the performance of the corporation during past two years both in terms of the turnover as well as in profitability/reduction in losses as per the details. (Rupees in crore) Particulars 2009-10 2010-11 2011-12 Turnover 299.75 392.36 423.06 Profit/Loss -20.51 -11.73 22.02 (Before tax)

The corporation, besides showing improvement in the turnover and prof18

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itability, has also shown a significant improvement in the operational efficiency. Further, the turnover of almost all the operational verticals have increased during the year. Due to operational losses during 200910 and 2010-11, the corporation could not distribute dividend to its shareholders. However, as during the year 2011-12 there has been a profit, dividend is declared for distribution to the shareholders of the corporation. The corporation is determined to perform even better in the coming years both in terms of profitability and in the turnover besides improving the operational efficiency. This is being said on the basis of the fact that the corporation is making efforts in not only the existing verticals of its business but is also trying to venture into new areas. Efforts are also being made to upgrade the existing properties and to explore the possibilities of attracting private investments in the areas of additional product development under public private partnership mode. The Ministry of Tourism has also reposed its renewed confidence by awarding various infrastructure projects for execution by ITDC. The corporation is determined to deliver in the most efficient manner both in terms of timelines as well as cost. As a part of its corporate social re-

sponsibility, the corporation has been the implementation arm of the Ministry of Tourism in its efforts for ‘Campaign Clean India’ project and also providing training to thousands of unemployed youth under ‘Hunar Se Rozgar’ initiative of the Ministry of Tourism. Determined efforts would further be taken to upscale the targets and their achievements. Significant initiatives undertaken during the year, include upgradation of hotels, mounting of sound and light shows in the country, entering into nonhotel sectors like hospitality education, international tourism and travel related events management and providing job skills and employment opportunities to the country’s unemployed youth as well as signing MoUs targeted towards tourism promotion as well as sourcing in additional business, forward the determination to perform even better in the coming years. ITDC was incorporated in 1966 with a mandate to develop and expand tourism infrastructure in the country. Today, the corporation offers a bouquet of services with its business activities ranging from hotel accommodation, catering, transport, travel agency, consultancy, manpower training, event management to allied activities such as execution of tourism and engineering projects, promotion of tourism via sound and light shows amongst others. ■


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One-on-one

Palm Tree Court

Ten Hotels signs JV with UK based hospitality firm Ten Hotels and Hospitality Solutions has signed a joint venture with UK based Hotel Solutions Partnership. Hotelscapes catches up with Mandeep Singh Lamba, president & founder, Ten Hotels & Hospitality Solutions to throw light on his end-to-end hospitality solutions consultancy. You have a rich experience in the hospitality industry. Tell us about it. I  have in my three decades of working had the opportunity to operate diverse products from business hotels to international branded resorts, from Timeshare to business and leisure clubs, from the country’s first international restaurant chain to the country’s first international all suites hotel. Equally, I have had valuable exposure in setting up and starting up all these ventures. Over the last ten years, I have been in corporate roles as president and CEO both as an employee and entrepreneur 20

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with equity holdings in the joint venture companies that I established. My career has provided me with rich learning from being associated with international and domestic brands such as Wimpy (UK), Radisson, Choice Hotels, InterContinental Hotels Group (IHG) in general management positions, with ITC Fortune Park Hotels as president and subsequently with Amari Hotels (Thailand), Duet International (UK) and Dawnay Day Group (UK) as a joint venture partner to develop hotel businesses in India. This wonderful and rare mix has provided me with excellent hands on

operating knowledge of hotels and restaurants in the earlier part of my career and with the investing, development, structuring and financial aspects of the hospitality business in the latter part of my career. I was the general manager for the country’s first international all suites hotel, Quality Suites Shalin, Ahmedabad, at the age of 28, president for the country’s best known and fastest growing mid scale hotel chain, ITC Fortune Park Hotels at the age of 38, CEO and joint venture partner with a four billion dollar international real estate and private equity company,


One-on-one

Hotels can benefit in several ways depending on their needs. For a small cost, they can get customised solutions to problems that they may be facing in operations, sales, marketing, technical or HR. Dawnay Day Hotels India at the age of 43 and I set up my own advisory practice, arguably the only one in the country offering the wide array of services with an extensive team, Ten Hotels and Hospitality Solutions at 48.

What led you to establish Ten Hotels and Hospitality Solutions?

Mandeep Singh Lamba president & founder, Ten Hotels & Hospitality Solutions

We have just been appointed as the India development office for JA Resorts & Hotels, UAE (formerly Jebel Ali Hotels) and look after the India development for them exclusively.

With the Indian economy growing at over 8 per cent per annum, the hospitality sector has seen rapid movement and large new investments arriving. Despite its size and economic power, India has an extremely small inventory of hotel rooms and a very nascent retail and lifestyle market. With the prospect of impending change and substantial capital being invested in hospitality and lifestyle infrastructure over the next several years, there is a growing need for professional advice to provide the industry’s investors and operators with current knowledge of the growing hospitality sector. Ten Hotels and Hospitality Solutions was founded in November 2011 and is about to complete its first year of operations. After having spent 30 years in the Indian hospitality industry and having had the privilege of working with several Indian and international hotel and restaurant companies in leadership and entrepreneurial roles, I felt that the time is right to set up an advisory and consulting practice that can assist fresh investors to set up businesses across the hospitality spectrum as also to provide customised solutions to existing businesses. There is a large void in the professional advisory business in the Indian hospitality sector that can provide end to end solutions and with the enormous growth anticipated in this sector, it was clear that a large demand exists for professional consulting across several hospitality verticals. Ten Hotels and Hospitality Solutions was set up in Gurgaon to cater to this demand and to occupy leadership position over the next five years.

What are the services Ten Hotels and Hospitality Solutions offers to hoteliers? Ten Hotels and Hospitality Solutions offers the following services to its clients:  Feasibility studies l Technical and project advisory l Operator search l Asset management l Operating audits l Knowledge and skill enhancement training programmes l Transaction advisory (M&A, buy, sell) l Executive search l International representations l Master franchise search for restaurant chains l Marketing and communication advisory l Advertising and design advisory l Vendor selection Our website www.tenhotels.in lists in detail all the above stated services and verticals that we run. l

How can the hoteliers benefit by associating with your consultancy firm? Hotels can benefit in several ways depending on their needs. We have a collective top class experience of over 200 man-years in our senior management team across all areas of hospitality. For a small cost, hotels can get customised solutions to problems that they may be facing in operations, sales, marketing, technical or HR. Besides, our team of well respected professionals with vast experience will provide a fresh and unbiased review of any area of concern that the hotel team may currently be facing. For any non hospitality investor who is entering the hospitality industry, Ten Hotels can act as an asset manager or in other words, an extended hospitality arm with the entire team’s expertise available for the same cost in which the investor would hire a single senior professional. This is truly a win-win situation for all. October 2012 hotelscapes

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One-on-one

Who is your clientele? We work closely with several leading real estate developers in assisting them with their hospitality ventures and with several leading international and domestic hotels and brands for our operator search and executive search verticals. Currently we are involved in asset management or operator search assignments with over 20 projects, over a dozen assignments for executive search and training and two master franchise searches for international restaurant chains out of New Zealand and US wanting to enter India. Besides this, we have just been appointed as the India development office for JA Resorts & Hotels, UAE (formerly Jebel Ali Hotels) and look after the India development for them exclusively. Several other dialogues are in the pipeline and we will be making more announcements shortly.

What are the costs involved in hiring your consultancy services? We can be hired on fees or on a monthly retainer basis for assignments where the minimum horizon is for one year or more.

Is this a relatively new concept in India? W hile consulting is not new to the country, there are only a couple of well established consulting practices in India and they offer limited services. In as much as end to end solutions across the hospitality spectrum at a professional and meaningful level is concerned, these are almost non existent. Ten Hotels and Hospitality Solutions was created to fill that gap given that the industry is expect22

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We are involved in asset management or operator search assignments with over 20 projects, over a dozen assignments for executive search and training and two master franchise searches for international restaurant chains out of New Zealand and US wanting to enter India. ed to see exponential growth and a major amount of that investment will come from non hospitality players who are likely to require professional and good quality advisory services. From my response on the business in hand that I have mentioned above you can gather that for a practice which is just completing its first year, the response has exceeded expectation.

Tell us about your joint venture with Hotel Solutions Partnership (UK). Is it an expansion exercise? We have signed a joint venture agreement with Hotel Solutions Partnership which is a global consulting firm headquartered in UK. This gives us instant access to clients globally especially in Southeast Asia, Europe and the Americas who are looking at hospitality investments in India and are approaching our partners Hotel Solutions Partnership at various locations worldwide. Equally, the JV gives us access to an enviable pool of world class professionals from across the globe for every possible hospitality vertical and to an enormous store house of knowledge and best practices. It helps us extend our reach beyond India and we are currently for example, working together on a proj-

ect in Sri Lanka. One of Hotel Solutions Partnership clients has approached them with a mandate to find opportunities in India to acquire operating hotels in resort and heritage locations and we would soon be working on this assignment.  From the Hotel Solutions Partnership perspective, this JV gives them instant access to the fast growing India and South Asia markets through their JV agreement with us. It gives our clients access to a unique reservoir of knowledge, a team of globally accomplished professionals across all hospitality domains and the networking to reach out to hotel owners and investors. India is the world’s second fastest growing tourism economy and will provide a large opportunity for good quality professional consulting.

What are your future plans? The JV has just started its operations and we are currently focussing on understanding all the strengths that we have jointly and how these can be best leveraged. Given the global reach of the JV, we are finding several opportunities to work together in the South Asia region where we will be concentrating over the next few years.  ■ as told to Manisha Almadi Midha


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discussion

The mid-market segment hotels need the right positioning Shwetank Singh discusses the demographic behaviours that are hurting the mid-market segment hotels.

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ndia today has several business fundamentals going for it, all of which point to just one thing that India presents an opportunity of a lifetime as far as hospitality industry is concerned and especially so in the mid-market space. Sample these often repeated demographics to see what I mean:

Demand indicators: Rapidly growing GDP – growth rate upwards of eight per cent (over the last decade) and expected to grow at a rate faster than China over the next decade

l

(nearly seven per cent)

Premier Inn, Bangalore

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hotelscapes October 2012

l India has the fourth largest GDP in the world likely to overtake Japan by 2016 l Ranked second only to China on AT Kearney FDI confidence index l FDI growing at the rate of 25 per cent CAGR over the 2001-12 period l Largest working population in the world (aged 15-60 years) l India’s median age is 25 years and likely to stay younger for the next 40 years l Growing income of middle class is driving consumption growth. India will become the fifth largest consumer market in the world by 2025 l Urban population to account for 32 per cent of the total population by 2016

Discretionary spend on transport and tourism set to rise to 20 per cent l Domestic tourist arrivals pegged at 750 million and growing l Seven million foreign tourists l

Where’s the supply: l Just over 200,000 rooms in the entire country l Of which around 63,000 are in the branded category l Expected supply of 150,000 by 2015 That would mean an additional requirement of 180,000 rooms with a total of US$ 26 billion investment to meet the demand. Ever wonder why all the hotels are not full all of the time if there are so many people traveling especially in the midmarket segment? Shouldn’t they be the preferred choice given the right positioning (in the market) and the burgeoning middle class population, that is earning more, traveling more and is distinctly more discerning than ever before? The fact is that most markets in the country (with the exception of a few) are reporting occupancies around the 60-65 per cent mark. Most markets have reported a dip in the ARR’s with a steady occupancy over the last few years thus resulting in dwindling RevPar’s. So why is this happening? The answer probably lies in analysing guest behaviour. It is well established that there are two types of guests. One is the leisure traveler whilst the other travels for work (or business) purposes. Let’s analyse each one of these separately. Majority of the Indians still have the mindset of staying with friends and family when we travel at leisure. Whilst, this is a changing trend due to reasons stated in the previous paragraph it may still be a few years until it’s considered perfectly acceptable to not intrude upon a friend


discussion

Premier Inn, Bangalore

shwetank singh VP-operations, premier inn, south asia (India, sri lanka and maldives)

In cases where the stayer is senior enough in the structure to have a voice over the so called policy decisions he or she ends up in an upscale or upper upscale hotel. The midmarket hotel once again loses out in the bargain.

or a family. The other side of this behaviour is embedded in the supply side. Even today (especially in Tier II and Tier III) markets the lack of availability of good quality bedrooms at the right price means that it continues to be a largely untapped “latent demand” a la cell phones some years back. Add to this a third factor which is the 4-5 Star remains an aspirational product. So in the cases where people travel to destinations with intent to holiday (read spend extra money, example planned annual holidays) they want to experience and enjoy a higher category. In cases where the travel is shorter may not necessarily be planned. Once again the mid-market segment misses out because the traveler is willing to compromise on quality in the favour of price. Let’s look at the business traveler. For the purposes of this article I am splitting it into two – large corporate houses (read IT/ITES) and small and medium enterprises (read SME’s – mainly into trading and manufacturing). IT/ITES emanating out of India is favoured today across the world for one key reason i.e. “cost advantage”. Controlling costs especially on non-core activities such as travel is

at the center of this efficiency. There in enters the ubiquitous “booker” who is very different from the “stayer”. One of main directives to the booker is to reduce cost. In highly competitive markets such as Whitefield in Bangalore the booker is able to drive a huge bargain. Such is the power the booker enjoys over the process that lower rates become the chief criteria of selection over and above the quality on offer. The stayer who is likely to suffer from such selection of hotels is but a moot spectator as he can hardly speak up against “policy” decisions. Hence, lower category hotels get preferred over the mid-market ones because of their ability to offer competitive (read lower) rates. In cases where the stayer is senior enough in the structure to have a voice over the so called policy decisions he or she ends up in an upscale or upper upscale hotel (because of eligibility criteria). The mid-market hotel once again loses out in the bargain. In case of SME’s the company does not have a set process of travel or the bargaining power of a large conglomerate. However the employee who travels much lesser than the chairman or managing October 2012 hotelscapes

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discussion

Bar, Premier Inn, Bangalore

director is once again a victim of cost consciousness. The seniors who can pay up end up usually at independent hotels because: a) They have been staying there for as long as they can remember. b) It’s close to their place of work. c) They have a comfort factor and everyone there knows him and makes him feel like royalty. d) They will accommodate all his whims without using policy or standard operating procedures as the reason for not doing what he wants done during the stay. So once again the preferred choice is not the mid-market hotel. When and how will this change. Will the segment ever become a preferred choice of the leisure traveler or will the booker being different from stayer nexus ever break. One has to look towards the more developed Western markets for answers. There is indeed some merit in analysing the consumer behaviours in those markets. The first thing to understand is that the budget/midmarket space is much better defined and understood. The Indian diaspora is slowly but surely 26

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Will the mid-market segment ever become a preferred choice of the leisure traveller? being educated on the concept through a slew of multinational brands such as Premier Inn, Ibis, Holiday Inn Express etc. Some domestic brands such as the Hometel and Lemon Tree are also doing a very good job. With this education will come the realisation that more than the price it’s the price to value equation that needs to take precedence. I believe that as the brands fulfill the latent demand of the market the consumer preferences of the leisure traveler will change. The ones that are cost conscious will be willing to upgrade to a better quality experience for a small price differential. Also others who can indeed afford the higher category hotels will begin to realise that they are paying for frills that they are not really using and that a great night sleep and good food and drink in a clean comfortable well looked after environment is all they need. Also the brands, by virtue

of their consistency will take away the element of the unknown as they spread their wings. It’s the large conglomerate that is driving the ARR’s down by virtue of their buying power that is a more difficult one to crack. They will continue to drive down prices especially in competitive micro markets. In such cases the hotels in the area need to get together and agree on floor pricing to be offered. It’s easier said than done though because of the pressures of economics. But until this is done it’s a situation that will continue to exist and each category of hotel will suffer at the hands of the booker. Similar to the leisure traveler the SME will soon realise the price value equation and the advantages of keeping their employee satisfied through a better stay experience. In conclusion the tide is certainly turning and the behaviours are changing. The multiple brands that are betting on India are actually betting on the change. ■ The author is vice president-operations, Premier Inn, South Asia (India, Sri Lanka and Maldives)


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pilgrimage tourism Sarovar Portico, Badrinath

Country Inn & Suites by Carlson, Haridwar

Indian pilgrim cities need more branded hotels

While Indian pilgrimage tourism is thriving there is lack of branded hotels in pilgrim cities, a gap waiting to be filled by hoteliers.

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ndia is globally recognised as a melting pot of multiple faiths and is famously known for its many spiritual destinations. These pilgrimage centers are not only recognised for their religious significance but also for their historical importance as many of these pilgrimage destinations have historical monuments that are considered as heritage sites of national or even global importance. In time many of these pilgrimage centers, with the help from local governmental bodies and funds, have developed infrastructure for pilgrims to aid them in their spiritual quest and assist them by easing the travel to these destinations. However, from the hospitality perspective there has been limited or no presence of branded hotels in these cities. 28

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There are as many as 52 pilgrimage destinations in India, with the top 10 destinations receiving more that 80 million visitors every year. Though local hotels and guest houses do exist demand far exceeds supply especially from travelers looking for recognisable brands to stay in. This has led to many travelers planning their trips by arranging their accommodation to the nearest major tier I, tier II and tier III cities and conducting day trips to these pilgrimage centers. The lack of hotel accommodation is a massive opportunity for hospitality companies to launch specifically developed branded hotels in these destinations. According to a survey conducted by the Indian Tourism Department, in 2010, it was found that 60 per cent of domestic

travel was for religious reasons. Andhra Pradesh, Uttar Pradesh and Tamil Nadu account for 21 per cent, 20 per cent and 15 per cent of domestic visits, riding on the back of very strong pilgrimage travel. Tirupati had over 23 million visitors in 2010 while Rameswaram recorded 9.8 million visitors; Vaishno Devi was visited by over 10 million persons while Dwarka by over 5 million visitors. However, the hospitality industry is grossly under-prepared for this kind of travel. India’s pilgrimage centers are fast becoming hot-spots for hotel chains, as both domestic and international groups look to plug a gap in the market for quality accommodation. Some of the major tourist pilgrim destinations and existing branded hotel chains are listed below:


pilgrimage tourism Country Inn & Suites By Carlson, Vaishno Devi, Katra

Restaurant at Sarovar Portico, Haridwar

Pilgrim Branded hotel cities chains present Tirupati Fortune Puri The Hans Group, Sterling Holidays Vaishno Devi

Best Western, Carlson

Haridwar

Carlson, Ginger, Sarovar Group

Ajmer Sharif Ambassador (Mansingh Group), Svaasa Group, Best Western and Ista Amritsar Country Inn & Suites by Carlson, Amritsar

Carlson, Sun and Sand hotel, and Best Western

Shirdi St Laurn Badrinath and Sarovar Group Kedarnath

Within India, there is an emergence of pilgrimage hotels as a hospitality concept that aims to enhance the pilgrims travel with services such a special desk giving guidelines and timings of rituals to be performed, providing ritual amenities within the room and more. â–  Source: Cushman & Wakefield Hospitality Research October 2012 hotelscapes

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medical & Wellness tourism

Hotels tap the wellness segment

While medical tourists from overseas flock India to avail medical facilities due to cost advantage, hotels have tapped the other aspect of wellness by promoting spas, as they realise the potential of wellness tourism in the country.

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edical tourism is becoming a popular option for tourists across the globe. The term medical tourism distinguishes the rapidly growing practice of travelling across international borders to obtain hi-tech medical care. The key competitive advantages of India in medical tourism stems from facts such as cost advantage and reputation in advanced healthcare segment (cardiovascular surgery, organ transplants, eye surgery etc.) In terms of locations – Delhi, Chennai, Bengaluru and Mumbai cater to the maximum number of health tourists and are fast emerging as medical tourism hubs. The major service providers in Indian medical tourism are the Apollo Hospitals, Escorts Hospitals, Fortis Hospitals, Breach Candy, Hinduja, Mumbai’s Asian Heart Institute, Aravind Eye Hospitals, Manipal Hospitals, Mallya Hospitals, Sankara Nethralaya and AIIMS. Medical tourism in India includes advanced and life saving health care services and also leisure aspect medical traveling/wellness tourism may be in30

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cluded on such medical travel trips. India provides a variety of medical services to overseas patients. Wellness tourism encompasses large avenues of health tourism and which include detox centers, recuperating centers, ayurvedic treatment centers, yoga centers and nutrition centers. Some wellness centers also provide homeopathic and naturopathy treatments. As of 2011 in India there are over 2,300 spas that generated revenues of up to US $400 million annually. There are 20-25 major spa centers around India, most of which are in the southern region of the country, particularly in Karnataka and Kerala. Medical tourists from US and Europe form major part of the consumer base for Indian medical tourism. India attracts approximately 2 per cent of the total international medical tourism market. It is estimated that in 2012, the Indian medical tourism industry will attract 1.1 million patients from across the world. There has been a substantial increase in demand for Ayurvedic therapies and other alternate treatments which is also

drawing large number of foreign tourists. Sensing growth opportunities, in 2011, the Ministry of Tourism launched strict guidelines and accreditation policies which have been developed by National Accreditation Board for Hospitals & Healthcare Providers (NABH) in consultation with the Department of Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homeopathy (AYUSH). These guidelines have helped maintain standards of quality and service across all wellness centers throughout the country. While the core medical requirements of travelers are taken care of by qualified medical centers, it is the alternate therapies where hotels have found a niche. Their primary focus is to provide for wellness tourism drawing from the fact that it is fast becoming a unique selling point for India. Thus many hospitality brands have started to incorporate services such as spas and other rejuvenation services. In order to show the government’s full support, the NABH has of late begun certification of hotel spas. ■ Source: Cushman & Wakefield Hospitality Research


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forum of the month Art installation at Grand Hyatt

Significance of art and culture for hotels

Hotelscapes talks toinvolved some ofinthe leading international hotel understand the need Hotels are actively promoting art and culture by brands inviting to local and international localisation, hotels localise – in which artists, and organisingfor various eventshow and do exhibitions. Hotelscapes finds out how important all elements in India, and how does it help draw clientele. the art and culture scene is for the hotels, and does it help the hoteliers stay in the limelight. 32

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forum of the month

T

he art and culture scene is getting bigger by the day in India, and hotels are not far behind in tapping the opportunity. The Lalit recently organised a musical evening with Shubha Mudgal for the launch of The Lalit hotel in Jaipur. Scribes and other guests were invited from all over to come and experience the hotel. Hyatt Regency Chennai celebrated a year with a Bee Festival in which noted artists displayed their art exhibits. This was a good two to three days event attended by known personalities and it garnered extensive media coverage. Some other hoteliers share their views on the importance of promoting art and culture.

Grand Hyatt, Mumbai

Shaji Thomas, director of sales and marketing – Grand Hyatt Mumbai /area director of sales and marketing – Mumbai, Pune and Goa Art is an integral element at Grand Hyatt Mumbai that has been carefully weaved and integrated into its contemporary décor and modern day settings. The largest contemporary lifestyle complex and Hyatt International’s flagship property in South Asia – Grand Hyatt Mumbai houses one of the finest and largest collections of commissioned art in a public space, thereby taking a pioneering step in bringing together Mumbai’s known artists and upcoming talent with master craftsmen and artisans from around the country. An opportunity that presents itself to us, where we can showcase the works of these brilliant artists or bring together members of the art community is taken into consideration. We try and organise at least one or two events centrally themed around art and culture in a year. The duration of such events would ideally be a day; a soiree over lunch or dinner where artists, members of the art community and connoisseurs of art can gather around and explore recent developments and advancements in the field of art and upcoming trends. It pro-

vides a platform for all those who share a common interest to come together and have a good time over a glass of wine and indulge in culinary delights crafted at the hands of our expert master chef’s specialising in authentic cuisines from around the world. Gra nd Hyatt Mumbai showcases creations of art by both upcoming and renowned artists such as Laxman Shreshtha, Jitesh Kallat, Hema Upadhyay, Chintan Upadhyay, Nalini Malani, Atul & Anju Dodiya, Tanuja Rane, Krishnamachari Bose, Sudershan Shetty, Prabhakar & Jyotee Kolte, Yogesh Rawal, Jaideep Merhrotra, Sunil Gawade, Bhupinder and Andrew Logan amongst others. The art within the premises has been curated in collaboration with Rajeev Sethi. We invite key members of the community and artists; who have been an integral and indispensable part of Grand Hyatt Mumbai since its inception, to our art and cultural events. Art and cultural events facilitate in highlighting the hotel’s USP and showcasing our product to the media, which in turn serves as a medium of communication to our guests, consumers and audiences. Hotels can gain exposure by organising such events as they present the perfect opportunity to showcase a unique quality about the property and also brings forth its involvement with communities that sets them apart from the others. One of the key points hoteliers need to see through is the appeal that the event presents to connoisseurs and art aficionados. One also needs to highlight the key reason for organising an event of such a nature, invite the right audience and affiliate with artists in order to showcase their current works and those from the recent past. The idea is to promote the hotel as an art hotel and shedding light on its significant contribution to the art and culture society. India has evolved into quite the art hub in recent times. Today, one can witness an immense amount of support and encouragement being extended towards

Planning, logistics, security, media collaborations, liaison with art curators and artists, allocation of space and food and beverage need to be taken into consideration to ensure smooth functioning of an event.

Shaji Thomas director of sales and marketing, Grand Hyatt Mumbai /area director of sales and marketing – Mumbai, Pune and Goa

One of the key points hoteliers need to see through is the appeal that the event presents to connoisseurs and art aficionados. The idea is to promote the hotel as an art hotel. cutting edge work by Indian artists at exhibitions and museums across the world. There is art pouring in from all sides of the country and the past decade has witnessed a growth in the number of art collectors, curators and enthusiasts with a keen eye for detail. Metropolitan cities such as Delhi, Mumbai, Bengaluru and Kolkata have now been providing a breakthrough platform for various established and upcoming artists thus carving a niche for an evolving art subculture. Mumbai is a melting pot of art and culture and this can only be further reinstated by the numbers of art galleries and art exhibitions that have cropped up around the key areas of the city in the past few years. Delhi as opposed to other cities is accommodating in terms of space. The availability of large spaces around homes and offices has elevated opportunities for art lovers to display larger and imposing pieces of art. Delhi has most certainly transitioned from being dismissed by art aficionados to a city that offers a plethora of options supporting art and artists through various exhibitions and art summits, be it experimental arts, perOctober 2012 hotelscapes

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forum of the month forming arts or visual and multimedia. Hotels need to educate themselves about the emerging and constantly evolving trends in the field of art and culture, invest time and resources to learn about the thriving forms of subcultures evolving within the broad spectrum of art and keep themselves abreast of art scene around the country for an elevated and heightened level of involvement. Planning, logistics, security, media collaborations, liaison with art curators and artists, allocation of space and food and beverage are some of the essential components that need to be factored in and taken into consideration by hotels to ensure the smooth functioning of an event and to make the outcome a grand success.

The Park, New Delhi Abhijit Bose, general manager The Park has always been welcoming towards events related to art and culture. About four to five such events take place at the hotel every month on an average. The duration depends upon the nature of the event. Events like DFF, DIAF or IDF with which, The Park has been associated since years are spread over time. The Park’s ‘New Festival’ which is an annual festival to promote new forms of art stretches over a few days. However, events like exhibitions, book launches etc are traditionally a day’s event. The Park has promoted and has worked with artists from across the globe. Artists like Akram Khan, Shankar Tucker, Will Ryman, Walton Ford, Amit Chaudhuri, Parijat Desai’s dance troupe etc are a few names who have recently exhibited their work or have performed at The Park. Being a pioneer in introducing the boutique concept and also a member of Design Hotels, makes The Park an avid promoter and enthusiast of art for the artists. This association of The Park with art, itself attracts a lot of artists who can relate themselves with the ideology and appeal of the hotel and consider us the perfect venue to showcase their work. The logistics vary according to the aim and scale of the event.It certainly does help in publicising the hotel but most importantly it keeps us close to our identity as a brand. It tells people that there exists a collection of hotels which are not only 34

hotelscapes October 2012

New York artist Walton Ford’s work on display at The Park

known for serving their guests with world class hospitality and service but also promote different forms of art, literature and culture. This gives us an altogether different brand identity. The Park has been organising events with many big names in art and culture. Various prestigious art and cultural forums and organisations like IDF, IAF and DIAF have been associated with us for years. By organising or hosting such events, we get our property exposed to the right clientele. The most important thing is to understand the aim of any particular event. How can we as a hotel associate with that event and work towards meeting that aim. We also need to be aware about the logistics and financials involved. Delhi is a very active city when it comes to art and culture. It is the host of some of the biggest art and cultural programmes of the world.

The Metropolitan Hotel & Spa, New Delhi Vipul Gupta, executive director

The Metropolitan Hotel & Spa (aka The

Abhijit Bose general manager, The Park, New Delhi

The Park has been organising events with many big names in art and culture. Various prestigious art and cultural forums and organisations like IDF, IAF and DIAF have been associated with us for years.


forum of the month

Babita Gupta, director of Art Spice, The Met with the ambassador of Iceland, Gudmundur Eiriksson

Vipul Gupta executive director, The Metropolitan Hotel & Spa, New Delhi

By promoting and preserving art and culture, The Met is being more dedicated to its CSR programme, Met Reach because at times lot of events are cause related. This also adds on to build guest loyalty and patronage.

Met) very regularly plans such events at our various celebrated F&B outlets like Sakura, Chutney, Bar + Tandoor etc. Along with this we have a dedicated luxurious art gallery, Art Spice that continuously organises art events, promotes the visual and performing arts and helps perceive art in its totality across the board in an interdisciplinary manner. It has hosted many successful shows including shows with sitting diplomats, senior artists and shows directed at corporate houses. The Met also houses a luxury lifestyle store, Craft House, which does events that promotes art and culture of India. Depending upon the nature of the event, its theme and ideas, local artists as well as artists from across the globe are invited. The duration of the event varies from days to weeks to a month. Artists also approach the hotel at times to join hands to do events at Art Spice. Logistics depend upon the nature of event, how big or small it is. Organising such events goes beyond page 3 publicity. To The Met it is another way of exceeding guests’ expectations by providing them with different experiences

that is apart from its regular gourmet and stay delights. It also adds on to build guest loyalty and patronage. By promoting and preserving art and culture, The Met is also being more dedicated to its CSR programme, Met Reach because at times lot of events are cause related.   Hotels do gain exposure through these events, but more than that, preservation of art and culture and the joy of providing a unique experience to the guests is of utmost importance. For proper and effective execution, planning is the key as success of all other aspects are attached to this. Every detailing should be looked into carefully like idea conceptualisation, purpose attached, right artists, ambience, publicity etc. All big events from art to music to dance are happening every now and then. All well renowned international names are now coming to Delhi to perform or hold exhibitions. You have to be in tune with the current trends and artists to tap them for doing some event. We are currently working on an art exhibition by a renowned Singapore artist at Art Spice for the month of November. ■ as told to Manisha Almadi Midha

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guest column

Predicting the future of revenue management Amit Modi writes about the future trends in revenue management that will help hoteliers maximise hotel revenue.

W

ith the increasing competition as also travel volume, planning has become very important for a hotel to sell and achieve monetary goals. This is where revenue management comes into play; this lateral has grown and matured tremendously since the last 10 years. It has evolved as a separate and key function department rather than just a side job role. Revenue management involves a logical approach towards taking decisions which may impact the hotel’s business. It is the best way to maximise the hotel’s revenue by selling the right room inventory to the right customer at the right time at the right price. Revenue management is hence a science supported by logic and numbers from the past, which can predict the future. In today’s operating environment, one of the most visible aspects of revenue management is rate discipline. Two decades ago, rate discipline and its effects on brand identity and future room sales was barely considered, and, even now, the concept is subject to wide interpretation and can sometimes be at odds with other revenue management aims. There is no doubt that pricing has always played a significant role in driving both occupancy and RevPar. But in today’s economic climate, mainly because of unprecedented price transparency, rates have assumed an even greater role. Coming up with the most favourable rate to offer a potential customer, one that will stimulate enough demand to stimulate occupancy while not leaving a too-low ADR (average daily rate) has arguably become the single most important aspect of revenue management. Having said this, hotel revenue management will no longer be limited to rooms only; F&B and banquet revenue management will also evolve to contribute to HRM 360 degrees. A detailed logical approach will be taken with respect to revenue optimisation from all sources – F&B/MODs/banquets etc. As a result, RevPar in future days will be replaced by Trevpar (total revenue per available room) 36

hotelscapes October 2012

RevPar in future days will be replaced by Trevpar (total revenue per available room) or GOPPAR (gross operating profit per available room) which accounts for total revenue and not only rooms.

or GOPPAR (Gross operating profit per available room) which accounts for total revenue and not only rooms. Channel distribution will be another major revenue focus. All selling channels like website/online travel agent/GDS etc will need to be dealt with high importance and with a strategic approach. Many hotels have set up electronic distribution centre which undertakes channel management, online marketing, SEO, SEM etc. Forecasting which is currently the main focus of revenue management will be further done with advanced tools and RM systems/automated tools. Suggestive selling or up selling will still remain the traditional ways of increasing revenue. Along with this, introduction of weekend packages to increase the occupancy in weekends when the corporate movement is traditionally low will help balance distressed inventory. There will be an introduction of incentive programmes for associates, encouraging them to push last minute sales and up selling thereby contributing to increase in overall revenue. The coming years will be, for the best lodging performers, an era of redefinition, and of commitment to forward thinking strategies that will serve them far into the future. Whether this rededication is accomplished through improved revenue management strategies (which we expect), or through increased offerings, or through leveraging information more efficiently, the healthiest hotels and resorts will be active and forward thinking. Success in the coming years is ripe for the picking but only the best prepared hotels that look to the future and adapt processes and operational models to meet changing marketplace demands will seize the opportunities presented by the coming years. The coming year will be filled with changes in revenue management systems and the way hoteliers do business. Change is a good thing, not to be feared. The best way to excel is to adapt to the current changes and be geared for the new ones. ■ The author is director-finance, The Grand, New Delhi


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report

Performance of hotels across major Indian cities: HVS report

I

The Trends & Opportunities report assesses key trends in the market performance of 13 major Indian cities and presents HVS’ outlook of the markets performances in the near future. It also outlines existing and future opportunities in the hospitality industry of specific interest to investors, developers and hotel operators.

t was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on it being received, for good or for evil, in the superlative degree of comparison only. – Charles Dickens, A Tale of Two Cities At HVS, we have been tracking trends within the Indian hospitality industry for the last 17 years and have witnessed two economic downturns and a historic growth period during this time. During these cycles, we have seen investors typically react either with “irrational exuberance,” a phrase coined by Alan Greenspan, and go overboard in building hotels in what they deemed “hot” markets at that point in time, or swing completely the other way to assume extremely pessimistic views of the industry and question the very fundamentals of the sector. While the policy paralysis within the government during the past year and concerns about macro economic conditions amongst investors have led to a more cautious outlook towards the hotel sector, the outlook is being artificially depressed by recent reports from other research and consulting firms. We believe that these reports rely on incorrect data and lack a detailed analysis of the various parameters that impact the hotel industry’s performance and, therefore, present an incorrect opinion of past performance and future potential. Our extensive experience in India

and the depth of hospitality information across numerous markets available in-house enables us to conduct more sophisticated analyses and present a true picture of reality on the ground. Through this year’s edition of the Trends & Opportunities Report, we aim to dispel the misleading information currently available to investors and present accurate data and analyses that will enable them to make an informed investment decision. This report is generated after analysing the results of the Trends & Opportunities Survey conducted by HVS annually; the survey collates data related to key hospitality industry operational characteristics. When we started collecting data for major Indian cities in 1995-96, only 120 hotels with a total of 18,160 rooms participated in the survey. This year, a record 551 hotels with a total room count of 69,891 rooms participated in the survey: an increase of an additional 89 hotels and approximately 12,000 rooms since the last survey. The growing number of survey participants over the years demonstrates an increase in both HVS’ penetration into the market and the market’s size. This year, in order to compute the overall occupancy and average rates, we have weighted the number of room nights to account for new supply that was not operational for the entire fiscal year of 2011-12. The weighted room count for 2011-12 is 65,612. Exhibit 1 illustrates survey participation from the fiscal years 1995-96 to 2011-12. The Indian economic scenario: an overview The global economy has been reeling under the shock of the Euro zone crisis, which has affected trade across industries and geographies. Global risk aversion led to

a decrease in exports by India, which in turn exerted downward pressure on the economy by widening the current account deficit in the fiscal year 2011-12. In the fiscal’s last quarter, the current account deficit was US $ 21.7 billion as compared to US $ 6.3 billion in the previous year. Further, at 5.9 per cent of the GDP, the high fiscal deficit translated to a significant expenditure revenue gap, weakening domestic fundamentals. In April 2012, Standard & Poor’s lowered its outlook for the Indian economy from stable to negative, on account of deteriorating economic indicators and lack of action on the fiscal deficit. In June, Moody’s followed suit and scaled down India’s sovereign credit outlook to negative for similar reasons. Although the move was not unexpected, it elicited mixed reactions, since the country’s underlying growth parameters are still believed to be strong. India’s GDP growth declined to 6.5 per cent (revised estimates by GOI, May 2012) during 2011-12 as against 8.4 per cent in the previous fiscal year. According to Reserve Bank of India (RBI) estimates, real GDP growth for 2012-13 is also expected to be 6.5 per cent, although an increase in private consumption and investment is likely to lead to a partial recovery in 2013-14. Private consumption expenditure, which accounts for over 50 per cent of the nominal GDP, is likely to register moderate growth in 2012-13, strongly supported by rapid urbanisation and the fast-growing middle class. The most serious challenge currently facing the Indian economy is inflation, which was 8.8 per cent in 2011-12. Supply side constraints, logistical issues and poor agricultural performance have led to a sharp increase in food prices, a crucial determinant of infla-

Exhibit 1: Sur vey Participation (1995/ 96 – 2011/ 12) 800

151

150 131

700

129

124

128

129

126

137

133

133

130

160 126

122

122

127

127

140

551 698

-

Number of Rooms (00's)

38

462 586

-

407 495

349 424

316 397

268 348

252 335

235 312

211 289

215 271

20

199 256

40

100

199 255

60

200 174 216

80

300

180 232

400

163 214

100

122 183

120

500

120 182

600

hotelscapes October 2012

Number of Hotels

Average Number of Rooms Per Hotel


report tion. Rising fuel prices and the move to more expensive sources of fuel have raised the level of public expenditure. Coupled with falling export demand, this has stoked inflationary pressures through currency depreciation. However, open market operations corrected the tight liquidity situation, and the two-stage reduction in the cash reserve ratio (CRR) in the fourth quarter of 2011-12 gradually eased monetary conditions. Going forward, strong economic fundamentals in the form of high savings and rapid working force expansion are likely to lead to improved economic performance in the medium-to-long term. The record hike in diesel price announced by the Indian government in September 2012 is an indication of the government’s intent to ensure fiscal consolidation. In the same month, initiating a shift in expenditure from consumption to investment, the government proposed 51 per cent FDI in multi-brand retail and 49 per cent in aviation, a move that has led to the country’s financial markets responding positively. This was followed by the RBI keeping the repo rate unchanged at 8 per cent and cutting the CRR by 25 basis points to 4.5 per cent, clearly indicating that managing inflation remains the Central Bank’s priority. At the beginning of the third week of September, the rupee was trading at 53.37/US $ 1, which placed it amongst Asia’s best performing currencies in the second quarter of 2012-13; the rupee is expected to witness further appreciation in the short-to-medium term. The focus on economic reforms and a change from a policy deadlock situation should provide the much needed momentum to the Indian economy. Exhibit 2 shows the comparison between GDP growth, inflation and exchange rate from 2006-07 to 2011-12. Tourism overview Despite the slowdown in the economies of America and Europe, foreign tourist arrivals (FTAs) were recorded at 6.29 million in 2011, an increase of 8.9 per cent over 2010. The top source markets were USA (15.97 per cent) followed by UK (12.57 per cent) and Bangladesh (6.34 per cent). Foreign Exchange Earnings (FEE) too witnessed a rise by 16.7 per cent in 2011 over the previous year. Although the country witnessed a growth of 60 per cent in FTAs from 2005 to 2011, it moved only five places in its world ranking from 43rd to 38th, during this period. Also, its percentage share of international tourist arrivals in the world continued to remain below 1 per cent (0.64 per cent) in 2011. Growth in FTAs has continued in 2012, albeit at a slower pace. From January-August 2012, FTAs registered an increase of 6.2 per cent over the previous year, as compared to the 10 per cent growth recorded during the same period in 2011 over that of 2010. FEE from tourism, on the other hand, rose by 23.7 per cent in January-August 2012, as compared to a growth of 15.9 per cent during JanuaryAugust 2011, over the corresponding period of 2010. On the domestic visitation front, the country registered a growth of 13.8 per cent in 2011 over the previous year crossing the 850 million mark. According to World Travel & Tourism Council’s (WTTC) Economic Impact 2012 – India report, domestic travel spending contributed 82.2 per cent of the direct travel and tourism GDP in 2011 as compared to 17.8 per cent generated by foreign visitor spending, highlighting the dominance of domestic visitation in Indian tourism.

Exhibit 2: Comparison between GDP Growth, Inflation and Exchange Rate 12.0%

50

10.0%

48 46

8.0%

44

6.0%

42

4.0%

40

2.0%

38

-

36 2006/07

2007/08

Exchange Rate (Rs/US$) (` /US$)

2008/09

2009/10

2010/11

GDP growth at Factor Cost

The former is estimated to grow by 8.3 per cent in 2012, while foreign visitor spending is anticipated to increase by 3.5 per cent in 2012. Overall, the total contribution of travel and tourism to India’s GDP was 5,651 billion (6.4 per cent of GDP) in 2011, and is forecasted to rise to 7.3 per cent in 2012 and by 7.8 per cent annually by 2022. As per the Economic Survey 2011-12, the hotel industry had reported a growth of 14.3 per cent in 2010-11 and is estimated to have maintained the same pace of growth in 2011-12. In 2012-13, growth is anticipated mainly from regions in Southeast Asia. Survey results The HVS Survey has been computed by dividing the participating branded hotels into their respective classifications according to star grading. This year we have examined the performance of 13 major cities across India. We have split Delhi NCR into Delhi, Gurgaon (including Manesar) and Noida (including Greater Noida), and have also shown their three-year historical performance. We believe that even though these markets are a part of Delhi NCR, they have separate supply and demand dynamics, and will, therefore, be discussed separately. This report presents the results of the HVS Survey on the performance of branded hotels, analysed by each hotel segment, as well as major cities. For each city we have presented the new supply, its market orientation and estimated the number of rooms under construction along with the probability of their development over a period of five years.

2011/12 Inflaƒon

In defense of hospitality Over the past decade, the branded supply of room nights in India has risen by 142 per cent, while room night demand has increased by 150 per cent, as depicted in exhibit 3. During this period we witnessed a 10 per cent compounded annual growth rate in the supply of branded room nights, accompanied by an 11 per cent compounded annual growth rate in demand. The strong positive correlation between the growth in supply and demand is indicative of the presence of a significant amount of un accommodated demand that was absorbed as new lodging options became available, and highlights the strength of the hospitality industry in India. While the major cities of the country witnessed a 15 per cent increase in supply in 2011-12, demand exhibited a strong increase of 12 per cent during the same period, one of the strongest demand increases across any market in the world. Thus, while nationwide occupancy declined in 2011-12, it is important to note that it was purely due to supply increasing faster than demand, and not due to an absolute decline in demand. Nationwide average rates witnessed a decline of 3.9 per cent over the previous year on account of supply pressure. Overall, nationwide RevPAR declined by 6.3 per cent. Recent reports by certain other firms have expressed grave concern about the amount of new supply anticipated across the various markets and how the new hotels will have a significant adverse impact on the performance of existing hotels in these markets. One report has gone so far as to claim that hotels in India October 2012 hotelscapes

39


report will see decadal lows in operating margins and predicts a bloodbath in the hospitality space going forward. We believe such concerns are highly over-rated and ignore the inherent strength of our hotel markets. Our confidence in the market’s resilience and potential is supported by our analysis of the 2010-11 and 2011-12 performance of hotels in major cities where new supply has been added in the past two years. We took the hotels that were operational as of 2009-10 across the major cities and tracked their occupancy and average rate levels in 2010-11 and 2011-12 to measure the impact, if any, of the new supply that opened during these two years. We similarly looked at all the hotels opened in 2010-11 and tracked their performance in 2011-12. The results are presented in exhibit 4. Notably, the average occupancy of hotels that were opened in 2009-10 actually increased in both 2010-11 and 2011-12, despite new supply increasing by about 15 per cent annually during these two years. The hotels that were operational in 2010-11 also exhibited an occupancy increase in 2011-12 despite aggressive increases in supply. Additionally, the fact that these occupancy increases were attained with only marginal declines in average rate clearly proves that the Indian hospitality industry has remained resistant to increases in supply in the past. Reports that, therefore, raise the specter of significant increases in supply and project a doomsday scenario in the future without considering corresponding increases in demand, ignore basic realities on the ground and do the entire industry and its stakeholders a disservice. In addition to the analysis presented in exhibit 4, we decided to go a step further and also examine the performance of new hotels that opened from 2009-10 through 2011-12 in the major cities to understand how they performed in terms of occupancy and average rate in their initial years of operation and if their performance was impacted by the turbulent economic environment they opened in. As presented in exhibit 5, hotels that opened in 2009-10 consistently increased their occupancy and average rates over the next two years. The same trend was observed in the case of hotels that opened in 201011. However, we have noticed that new hotels are taking longer to improve their occupancy levels as a result of the economic downturn and increased supply in the market. Thus, while hotels that opened in 2009-10 attained an occupancy of 44 per cent in their first year and 54 per cent in the second year, the hotels that opened in 201011 only managed occupancy levels of 42 per cent and 51 per cent in their first and second years, respectively. Hotels that opened in 2011-12 attained occupancy of 40 per cent, showing a continuation of this trend. Thus, while hotels are taking more time to stabilise, what is obvious is that they are enjoying consistent increases in both occupancy levels and average rates after opening. These analyses clearly show that the Indian hospitality industry has thrived in the past despite significant increases in supply, with such supply increases actually resulting in strong growth in demand. Except for 200809, the nationwide hotel market has never seen a decline in demand and such a trend is expected to continue into the future. It is clear that the entry of new hotels across the country has not had a significant impact on the overall performance of existing hotels in these markets and that any occupancy or average rate declines for the markets are mainly a result of the new hotels impacting 40

hotelscapes October 2012


report

October 2012 hotelscapes

41


report the weighted average of the market. We, therefore believe that any claims of gloom and doom for the hotel industry going forward are highly exaggerated, irresponsible, and based on a very simplistic view of the hotel sector. It is our recommendation to hotel investors that they focus on the various parameters relevant to the specific market they are evaluating and then make an informed investment decision instead of purely considering India wide hotel trends. Industry performance according to star category In 2011-12, hotels across all categories witnessed a decline in weighted occupancy, except for the fourstar segment, which benefitted from its positioning between the five-star and three-star categories and was able to attract demand from both segments. In terms of weighted average rates, all categories witnessed a decline with the exception of the three-star segment, which maintained its average rate. All categories showed a decrease in RevPAR with the five-star category being the worst performing.

42

hotelscapes October 2012

Existing supply in 2011-12 We would like to highlight that 2011-12 witnessed an addition of 12,782 branded rooms in the country, which led to an existing supply of 84,313, an 18 per cent increase over the previous year. The new supply of 12,782 branded rooms in 2011-12 was 31 per cent higher than the new supply in 2010-11 and second only to the new supply in 2009-10. Mumbai (including Navi Mumbai) has the highest existing supply of branded rooms in the country, followed by Delhi (excluding Gurgaon, Noida and Greater Noida) and Bengaluru, while Noida had the lowest supply of branded rooms (527 rooms) across the major markets. Bengaluru witnessed the largest increase in supply of branded rooms in 2011-12, closely followed by Delhi. Noida on the other hand witnessed the least amount of new supply in 2011-12 with only 176 rooms entering the market. Table 1 shows the existing supply for the 13 major cities from 2006-07 to 2011-12. Table 2, overleaf, illustrates hotel occupancy across the star categories in India between 1995-96 and 201112. Tables 3 and 4 show average rates for each of the star categories, expressed in Indian rupees and US dollars,

respectively. Tables 5 and 6 present the corresponding RevPAR data.

Future supply

Over the years, HVS has followed a comprehensive approach for tracking new hotel development. We would like to state that a lot of effort goes into collating this data and then verifying many of these projects across various cities in terms of their development stage. Our tracking omits any flippant statements made to the media or announcements made by real estate developers to promote their brand and, therefore, get greater visibility. Thus, as we do each year, we have put together a list of developments under construction or those announced in each market that have a confirmed tie-up with an operator. Such developments have been analysed rationally, through the prism of an unbiased third party, for the probability factor of their development within the next five years. The proposed supply of branded hotels in 2007-08 was 114,466 rooms, which declined to 94,115 rooms in 2008-09 due to the economic downturn. The decline continued through 2009-10 with the total proposed supply amounting to only 89,499 rooms. As the economy strengthened the proposed supply grew to 102,438 in 2010-11. In the year 2011-12, we witnessed an 8.8 per cent decline in proposed supply over the previous year to 93,355 rooms. The decline can partially be attributed to a substantial number of rooms in last year’s proposed supply having become operational this year; these rooms are now included in this year’s existing supply. Additionally, several projects that had their plans for development formalised and were in the supply pipeline till last year, have now been delayed or called off on account of high borrowing costs, tight liquidity and perhaps a lowered confidence in the Indian economy and political leadership. Numerous international hotel brands have entered the Indian hospitality market in the past decade and are now aggressively focusing on their expansion strategies. In exhibit 6, we present the total operating inventory for the 20 largest hotel brands in the country as of September 2012. In table 7, we present the existing and proposed supply in each of the 13 major markets and other cities covered in this report. Table 7 reflects the anticipated growth over a five-year period by quantifying the number of hotel rooms currently under construction or those that HVS is confident will open by March 2017. We have further classified the new supply into its potential segments of luxury, upscale, mid market, budget and extended stay hotels. Table 8 presents the development trend of the hotel markets across India over the last six years. We note that Mumbai (including Navi Mumbai) has the highest planned future supply in the country in 2011-12 with close to 10,896 proposed rooms. However, this number could be misleading and needs to be further viewed in conjunction with the probability of the proposed supply actually being developed in that period of time. The active development of supply percentage is the percentage of total proposed supply, which is expected to be developed in the next five years or by March 2017. So, while Mumbai reflects a total proposed supply of 10,896 we believe that only 47 per cent of this proposed supply will actually be developed by March 2017. Meanwhile Bengaluru which has the second high-


report est number of proposed room supply (9,716 rooms) will actually see 71 per cent of this supply, or 6,890 rooms, become operational by March 2017. The countrywide active development of supply over the next five years has declined from 60 per cent in 2010-11 to 58 per cent in 2011-12, as projects were deferred on account of reduced liquidity and concerns about macro-economic conditions. After taking into account the 58 per cent active development of future supply, we expect 54,000 rooms to be developed over the next five years, taking the total supply to about 138,000 rooms by 2016-17. Exhibit 7 presents the increase in hotel room supply in India from 2000-01 through 2011-12, and then further presents proposed new supply through 2016-17. An interesting point to note is the shift in the composition of this supply. Traditionally, India has been associated with the development of luxury and upscale hotels. In our report in 2010, proposed luxury and upscale hotel supply constituted 50 per cent of the total new supply expected to enter the market in the next five years. In 2011, this number had dropped to 45 per cent giving way to increased development in the mid market and budget space. Going forward, this year’s survey reaffirms this trend with the luxury and upscale segments now accounting for only 43.7 per cent of the total proposed supply across the country. In our opinion, such a trend bodes well for the hospitality industry at large as the availability of lodging options across all

Exhibit 7: Growth of Room Supply – India (2000/ 01 – 2016/ 17) 180,000

138,227

160,000 140,000 120,000 100,000

84,313

80,000 60,000 40,000

24,905

20,000 2000/01

2011/12

2016/17

Number of Rooms price points will encourage and enable more Indians to travel within the country and thereby increase demand for the industry. Industry performance across major cities In 2011-12, most hotel markets witnessed a decline in occupancy with the exception of Ahmedabad, Pune,

Kolkata, Mumbai (including Navi Mumbai) and Goa. Ahmedabad, which witnessed a decline in occupancy in 2010-11, bounced back in 2011-12 with the highest increase in occupancy (10.1 per cent) on account of strong growth in demand and limited supply entering the market. Pune, which also witnessed a decline in occupancy in 2010-11, recovered in 2011-12 with an 8.4 per cent increase in occupancy due to reduced supply

October 2012 hotelscapes

43


report pressure. Kolkata and Mumbai witnessed a 4.5 per cent and 2. 2 per cent increase in occupancy respectively. Noida (including Greater Noida), on the other hand, witnessed the highest decline in occupancy (22.3 per cent) in 2011-12 with 50 per cent increase in supply by the addition of a single hotel, but only 15 per cent growth in overall demand. Delhi saw the second highest decline (9.9 per cent) in occupancy for that year. In terms of average rates all markets witnessed a decline with the exception of Goa. Goa witnessed an 8.9 per cent increase in average rate in 2011-12 over the previous year. Pune suffered the highest decline in average rate by about 11.3 per cent over the previous year, reflecting the trade-off the city witnessed in order to increase its occupancy. Despite a 3.9 per cent decrease in average rate, Delhi witnessed the highest average rate in the country in 2011-12 at 8,293. RevPAR witnessed a decline in all the cities in the country barring Goa, Ahmedabad and Kolkata. Table 9, overleaf, illustrates hotel occupancy for 13 key cities in India between 1995-96 and 2011-12. Tables 10 and 11 show average rates for each of these hotel markets, expressed in Indian rupees and US dollars, respectively. Tables 12 and 13 present the corresponding RevPAR data for each city. City trends After having witnessed no new branded supply in 2009-

44

hotelscapes October 2012

10 and 2010-11, witnessed a 21 per cent increase in supply in 2011-12 compared to the previous year. Consequently, the city saw a decline in both occupancy (-6.1 per cent) and average rate (-3.9 per cent), leading to a decrease in overall RevPAR (-9.8 per cent). We are currently tracking proposed supply of 650 rooms over the next few years, 80 per cent of which is in the mid market segment and 20 per cent in the luxury segment. Of the markets being tracked by us in the report, Agra remains one of the few cities that are yet to witness any development of budget hotels. Unlike Jaipur, its sister-city in the Golden Triangle itinerary, Agra has been unable to establish itself as a MICE destination and obtains demand primarily from the group leisure and individual leisure (foreign and domestic) segments. Growth in the MICE segment has been minimal mainly due to the lack of infrastructure development and limited connectivity to Delhi/NCR. However, the recent opening of the six-lane, 165-kilometre long Yamuna Expressway that connects Greater Noida to Agra has halved travel time from four hours to approximately two hours. Thus, we anticipate Agra to witness significant growth in demand especially in the MICE and individual leisure (domestic) segments. HVS believes that although demand will continue to grow, the impending supply pressures are likely to keep average rates fairly muted in the next few years. Ahmedabad witnessed the highest increase in

occupancy (10.1 per cent) amongst the cities tracked in the survey despite an 11 per cent increase in supply, which is indicative of the strong increase in demand. Market wide average rate, however, declined by 5.3 per cent, resulting in RevPAR growth of 4.3 per cent. Demand in Ahmedabad is driven primarily by the commercial segment and largely depends on the project related business emanating from industrial clusters located along the periphery of the city in Naroda, Vatva, Changodar, Odhav, Aslali and Sanand, in addition to demand generated from the traditional CBD areas of Ashram Road and CG Road. In the past few years, owing to hectic development in the commercial sector, Sarkhej Gandhinagar highway is slowly developing into an alternate CBD. Despite several delays, construction is also underway at Gujarat International Finance TecCity (GIFT). Additionally, the much talked about Sabarmati riverfront project was completed earlier this year and is expected to add a leisure element to an otherwise business oriented city. We are currently tracking a proposed supply of 2,550 rooms with only 69 per cent of this supply expected to come online in the next five years. Nearly 50 per cent of the 2,550 rooms are expected in the luxury and upscale space, which in our opinion will help in uplifting the image of the city, as currently Ahmedabad supports only one upscale hotel. Also, the meeting spaces planned within these hotels


report

will help attract MICE demand as the city has huge potential for the same given the large presence of the pharmaceutical sector in Ahmedabad. With the base inventory expected to more than double in the next few years, we believe hotels in the city will see occupancy pressures. Moreover, we project average rates for the overall Ahmedabad market to decline in the short term as hotels will focus on occupancy levels in a more competitive market place. Bengaluru’s hotel market relies heavily on the IT and ITeS sector with a high foreign to domestic guest ratio, making it more vulnerable to global economic changes than most other cities in the country. This exposure to the international markets was one of the primary reasons why the city’s hotels witnessed an overall drop of 8.1 per cent in RevPAR in 2011-12. Additionally, a 30 per cent increase in the number of hotel rooms in a single year augmented the pressure on average rates, resulting in most hotels adopting a volume-driven strategy. The distinct micro markets of the city behaved differently, with the CBD that has the highest concentration of luxury and upscale hotels witnessing the maximum drop in average rates while still maintaining stable occupancies as compared to the previous year. Whitefield and Electronic City, on the other hand, recorded marginal increases in average rates owing to limited new supply entering these markets. 2011-12 also saw two new micro markets being formed in Bengaluru – the ORR-Sarjapur stretch to the southeast and Yeshwantpur to the northwest of the city centre increasing pressures on the average rate across the city with the commercial business traveler having more accommodation options to choose from. Contrary to the common phenomenon of budget and mid market hotels recording higher occupancies than hotels with a higher positioning, Bengaluru continues to witness luxury and upscale hotels performing better on this parameter than the rest of the market owing to the latter facing stiff competition from the parallel unbranded hotel market in the city. Ranking third in terms of existing supply, Bengaluru is anticipated to witness the highest number of new rooms entering the market over the short-to-medium term (9,716 of which 71 per cent is under active development), a reflection of the continued investor confidence

in the city. Bengaluru’s hotel market is expected to become more competitive with around 2,400 new rooms entering the market over the next couple of years, and we expect hotels to focus more on occupancy than average rates across all micro markets of the city in the short-to-medium term. However, with nearly half of the new supply having an upscale/luxury positioning, we anticipate the market wide average rates to witness an increase in the long term. There is an increased focus on the MICE segment with it contributing over 20 per cent of the rooms business for most of the newer hotels that opened in the last one year. However, the city still lacks a world class convention centre, restricting its ability to tap into this lucrative segment. 2011-12 witnessed marginal declines in both occupancy and average rates over the previous year, primarily due to the entrance of new supply in the market. In 2012-13, we expect further pressure on occupancy and rates as more than 1,000 new rooms get added to the market, including luxury properties such as the ITC Grand Chola, The Leela Palace and the Park Hyatt. The micro market of Old Mahabalipuram Road (OMR) is also expected to experience a drop in occupancy as city hotels and the new properties opening in Guindy actively compete for demand from this area. OMR is expected to witness a large influx of new supply in the next five years; approximately 2,000 rooms have been announced, and 50 per cent of them are actively under development. The micro markets of Sriperumbudur and Oragadam, where several automobile and manufacturing units are located, continue to present opportunities for hotel development, especially in the budget and mid market segments. Chennai is expected to witness continued growth in demand from the IT/ITeS, automobile, and manufacturing sectors, and the more traditional finance and government sectors. We expect the new iconic properties with large meeting spaces to attract large conferences and events into the city and help in marketing Chennai as a MICE destination. The new international and domestic airport terminals in Chennai are also expected to become operational this year, with the combined capacity of the two terminals increasing to 23 mppa from 12 mppa. We therefore also expect growth in the airline segment in the city.

Delhi (excluding Gurgaon, Noida and Greater Noida), the second largest hotel market in India after Mumbai, saw a compounded increase in supply of 15 per cent over the past three years. In the same period, supply pressure and the overall state of the economy caused RevPar to decline by a compounded rate of roundly 8 per cent. HVS is currently tracking 5,626 proposed rooms which is an increase of 53 per cent in supply. However, we expect only 87 per cent (4,901 rooms) of them to be developed over the next five years. A majority of this supply is in the upscale and mid market segment and is concentrated around the DIAL Aerocity area which consists of 15 hotels that are either under construction or in advance planning stages. In the short term, Delhi continues to be a strong market and the phased introduction of the DIAL hotels from late 2012 to 2016 is likely to further induce demand for the city. Despite moderate supply pressures in the next few years, Delhi remains a strong market for hotels. Furthermore, the high costs and scarcity of land bodes well for Delhi as it continues to position the city as a high barrier to entry market. Gurgaon, which forms an integral part of the NCR, is amongst the top performing hotel markets in the country with an existing supply of approximately 3,800 hotel rooms as of 2011-12. The area has seen the addition of approximately 40 million sq ft of office space between 2002-03 and 2011-12 and is expected to see a further addition of a near similar quantum over the next 10 years. The city saw the addition of approximately 1,100 rooms in 2010-11 and a further 550 rooms in 2011-12. In spite of these large changes in supply market wide occupancy grew by half a percentage point in 2010-11 followed by a marginal dip of approximately two percentage points in 2011-12. Average rates, however, saw some correction during these periods primarily on account of a large portion of the new supply being in the mid market and budget segments of hotels, which negatively impacted market wide average rates. These drops in occupancy and rate however should not be looked at negatively, but instead as a step towards stabilised growth. Almost 60 per cent of the existing supply in the market belongs to the mid market and budget category of hotels which is bound to bring the overall average rates of the city down. October 2012 hotelscapes

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report Going forward, a supply pipeline of approximately 5,800 rooms is planned for development in Gurgaon with only 55 per cent of these under active development. These increases in supply are expected to result in declines in both occupancy and average rates. However, in the medium-to-long term with the continuous large-scale commercial development in the city, hotel performances are expected to be fairly stable. Noida (including Greater Noida) recorded the sharpest decline in RevPAR (-29.5 per cent) in 201112 primarily due to a significant increase in supply (50 per cent) over that in 2010-11. Noida has traditionally supported a very small branded hotel base with the average inventory size ranging from 50-100 rooms. In the case of Greater Noida, branded hospitality development is a relatively recent phenomenon as the city only witnessed the entry of branded hotels for the inaugural Formula 1 motor race held at the Buddh International Circuit last year. Noida and Greater Noida have steadily grown over the past decade to become hubs of industrial activity. Improvements in infrastructure such as the expansion of roads, development of the six-lane expressway connecting Noida with Greater Noida, the addition of a power substation near the Noida Special Economic Zone (NSEZ) and construction of several new housing projects has made the area attractive for investment. Additionally, the recently opened Yamuna Expressway project that connects Greater Noida to Agra is expected to boost vehicular movement from Delhi NCR to Greater Noida and onward to Agra. Going forth, HVS is tracking a staggering growth of 1,048 per cent in supply with an addition of 5,522 new rooms. However, we expect only 37 per cent (2,053 rooms) of these projects to be built over the next five years. HVS is of the opinion that as new hotels enter the market, Noida and Greater Noida will evolve into individual micro markets. In Noida, we anticipate the hotel market to face average rate pressure from new hotels expected to open in the east Delhi and Ghaziabad areas. Hotels in Greater Noida are anticipated to focus on shoring up occupancy in the short-to-medium term. Goa is the only major hotel market in the country that witnessed a year-on-year growth in both average rate and occupancy in 2011-12. The marginal growth in market wide occupancy in spite of the recent opening of the Grand Hyatt is indicative of the market’s ability to absorb quality branded hotels with relative ease. A near nine per cent growth in market wide average rate is a result of a steady growth in room night demand. However, future growth will be influenced by improvements in transportation links, with Goa still awaiting clarity on the up gradation of the Dabolim airport as well as the development of the proposed Mopa airport in the Pernem district. Additionally, the state continues to have high barriers to entry and seeking the relevant approvals and permissions to construct a hotel coupled with the CRZ regulations (some of which are likely to see improvements in the near future) make it difficult for developers to open properties across the shores of Goa. Goa’s lack of clarity regarding land-use norms continues to limit the proposed supply entering the state. Of the 2,422 rooms that are proposed to enter the market, only about 53 per cent are under active development. Almost all of the proposed supply will be centered 46

hotelscapes October 2012

around the Candolim-Vagator belt of North Goa. Overall, our future outlook for Goa continues to remain positive. We expect the hotel market to successfully absorb the proposed supply and continue to sustain market wide occupancies in the late 60s to early 70s in the short-tomedium term. Average rates are expected to continue witnessing a steady and sustainable increase in the short-to-medium term as well. Hyderabad has witnessed a sharp decline in RevPAR over the past five years with a compounded decrease of 10.2 per cent. Supply pressure has kept occupancies and average rates suppressed and the ongoing political disorder clubbed with a slowing global and national economy has further impacted the performance of hotels in the city. Although existing companies have resumed business with a moderate pick up in demand of three per cent, new companies and investments are reluctant to consider Hyderabad given the current political uncertainty associated with the city. Though the immediate outlook for Hyderabad may seem bleak with supply outpacing demand, the city has proved to be fairly resilient by absorbing a 17 per cent compounded increase in supply over the past five years resulting in a 10.2 per cent compounded drop in RevPAR for the same period. Hyderabad is scheduled to host one of the biggest international events to be held in India; the International Bio-Diversity Conference in October 2012. The conference is likely to attract 8,000 international delegates, which is a first for the city. The establishing of India’s first conventions bureau last year, the Hyderabad Convention Visitors Bureau, is further expected to enhance meeting and conferencing demand for the city in the long run. We are currently tracking proposed supply of 5,265 rooms over the next five years with about 74 per cent under active development. A majority of the proposed supply (63.5 per cent) is expected in the upscale and mid market segments. HVS believes that although demand will continue to grow, the impending supply pressures are likely to keep the occupancy and average rates fairly muted in the short run. Jaipur continues to be one of the premier leisure destinations in the country given its rich historic flavour, vibrant culture and the marketing efforts of local and international travel trade companies as one of the three key destinations on the famous Golden Triangle itinerary together with Delhi and Agra. In recent times, the city has also become a key MICE destination catering to large incentive tours, corporate residential meetings and weddings. The competitive rates the Jaipur hotel market is able to offer, coupled with the fact that the city also offers an opportunity to use an extra day for leisure activities for corporate groups, serves as an important selling tool. Additionally, the wedding market in the city, which has always been a large contributor to hotel revenues, is also expected to see growth with the concept of destination weddings gaining immense popularity. Jaipur as a city is able to offer the historic splendour and setting making it ideal for grand Indian weddings. The city witnessed a 3.5 per cent drop in occupancy in 2011-12 over that of the previous year as well as a marginal decline in market wide average rates. 2011-12 also witnessed the introduction of approximately 500 new hotels rooms compared to an increase of nearly 82 rooms in the previous year

resulting in both occupancy and average rate pressures across the market. Going forward, approximately 1,000 more hotel rooms are expected to enter the market in 2012 and 2013 making further occupancy and average rate pressures imminent in the short term. In the long term, an additional 2,300 rooms are proposed for development in Jaipur, of which approximately 50 per cent is in the upscale segment. HVS is of the opinion that while the city is seeing almost a doubling of its supply over the next few years, Jaipur will need more mid market and budget accommodation to balance the development of hotels in the upscale space. Development of hotels in the mid market and budget space would also yield better returns for owners and operators, and further strengthen the market by providing accommodation at a competitive price point. Kolkata is one of the few cities that have witnessed an increase in RevPAR (2.5 per cent) in 2011-12. This is primarily due to minimal new supply (199 rooms) entering the market and increasing demand from developing areas such as Rajarhat, Kolkata’s new commercial and industrial district. Historically, business activity was concentrated in the central business district (CBD) of Chowringhee, Esplanade, Dalhousie and Park Street where a large number of PSUs and corporate offices of older companies still exist. However, the past few years have seen rapid development along the city’s eastern periphery in areas such as Salt Lake and Rajarhat. We are currently tracking 3,118 rooms that are proposed for development with 74 per cent of them under active development. Like most other cities, the proposed supply is primarily in the upscale and mid market segments; however, Kolkata is the only mini metropolitan city that is yet to witness any development of branded budget or extended stay hotels. The extensive development pipeline in New Town, Rajarhat and the eastern part of Kolkata, coupled with its distance from CBD and proximity to the airport, is expected to lead to the creation of a distinct micro market that will generate its own room night demand and be selfsustaining, going forward. This new micro market is expected to put pressure on the existing CBD hotels to sustain their current operating performance and tap other business opportunities. Overall, our outlook for Kolkata remains positive as we anticipate the city’s hotel market to maintain its occupancy level and witness marginal decline in average rates owing to new supply impact in the short to medium term. Mumbai (including Navi Mumbai) witnessed a 2.2 per cent growth in occupancy in 2011-12 over that of the previous year and a 2.5 per cent dip in average rates during the same period. The city also witnessed a seven per cent (approximately 750 rooms) increase in hotel room supply which was much slower than the 14 per cent growth it witnessed in 2010-11. The South and Central Mumbai micro markets have probably been most affected in 2011-12 by a drop in demand with several offices shifting base to the new North Mumbai business districts in Bandra Kurla Complex (BKC), Andheri-Kurla, Malad, Powai and Vikhroli. Lower commercial rentals, state-of-the-art office facilities, the area’s proximity to the airport, and the extended travel time from North to South Mumbai have been some of the main reasons for this shift. Further, occupancy and


report average rate pressures are expected in 2012-13 as well. The displaced demand from South Mumbai has positively impacted North Mumbai hotels. Almost all hotels in this micro market have shown stable to marginal growths in occupancy. A majority of the new supply to enter Mumbai in 2011-12 was in the North Mumbai area. Coupled with the additions to supply in 2010-11, the area has witnessed some rate pressures as a result of these new hotels trying to increase their overall market share. Going forward, with supply growth in the short term anticipated to be slower than the previous years, we expect occupancy levels to rise with average rates still coming under pressure as new hotels in the market try to reach a stable level of performance. The Navi Mumbai micro market is still largely dependent on unbranded hotels, which continue to form a bulk of the hotel supply in the area. The total number of branded rooms in 2011-12 stood at 562 with another 389 rooms expected to be added in 2012-13. Future supply growth remains slow paced with a lot hinging on the development of the new international airport at Panvel, which has already witnessed several delays and is yet to commence construction. Going forward, with a major portion of the new supply already operational in 201213, there is likely to be occupancy and rate pressures in this micro market in the short term. However, with only limited new supply expected in the medium-to-long term, we expect hotel performances to steadily improve in the future. Pune saw the second highest growth in occupancy (8.4 per cent) following Ahmedabad, a first since 200607. In the last five years (2007-08 to 2011-12), the city’s hotel supply has witnessed a steep growth of over 320 per cent leading to a decline in occupancy in each year. In 2011-12, growth in demand outpaced supply resulting in the upward movement of occupancy. Growth was primarily led by the MICE segment as Pune established itself as an alternate location to Mumbai for hosting large scale events in the western region of the country. However, as hotels focused on building their occupancies, the average rates recorded the highest decline (-11.3 per cent) among all the markets tracked by us in this survey. Despite the declining average rates, HVS believes that the increase in occupancy signals that Pune has left its worst behind and is now clearly on its path to recovery. Going forth, we are tracking new supply of 4,645 rooms with only 69 per cent under active development. Over 60 per cent of the proposed supply is planned in the mid market and budget segments especially in the industrial pockets of Chakan, Pimpri and Talegaon that are located along the periphery of Pune. As the growth in supply moderates, we expect occupancy levels to continue to improve. With respect to average rates, we anticipate that the CBD hotels will be able to maintain their rates whereas hotels located in the peripheral locations such as Nagar Road, Hinjewadi and Pimpri will witness a decline due to pressure from over supply of rooms in the short term. Future trends Our analysis of hotel performance data for the past 17 years reveals that except for 2008-09, we have not seen room night demand decline in the country, and any declines in occupancy levels have been a result of supply increasing faster than demand. It is therefore very

important to track future supply when projecting future performance for any market. Our current analysis reveals that unlike previous cycles where significant number of hotel rooms entered the markets in very short periods of time, future supply is now more evenly spread out and should have a less detrimental impact on market wide occupancy levels. Another trend that we have observed and that will become more relevant in the future is the nature of capital that is now flowing into the Indian hospitality industry. Historically, while a majority of hotel development was funded either by high net-worth individuals or real estate firms, we are now increasingly seeing institutional players invest in the hospitality space, especially in the budget and mid market space. Investment by such players brings with it a disciplined approach to the process with any investment based on thorough market research and due diligence, generally ensuring that unfeasible projects are not developed on a whim and that new supply is not added to markets indiscriminately. Such an approach will ensure that any development is purely based on return on investment (ROI) instead of return on equity (ROE) and also inspire confidence amongst lenders and other stakeholders. While institutional investors are very focused on maximising operational margins, they are just as committed to development costs of the hotels they build. As part of their drive to reduce input costs, investors are questioning the brand standards dictated by hotel companies and the relevance or requirements for some of them. As the industry matures and hotel investors continue to become more knowledgeable and savvy, it is our opinion that hotel brands can no longer simply mandate such requirements, unless they can prove to owners that the additional costs incurred will lead to greater returns. As our industry heads towards critical mass, we believe that hotels will now have to be designed to meet the actual requirements of guests and not be based solely on a brand’s wish list. For the past couple of years, we have been highlighting the changing nature of ownership in the hospitality industry and predicting a new phase where more hotels are bought and sold in the market place. We have seen several transactions in our sector and we expect to see more of them in the future. It is our opinion that the industry is heading into a consolidation phase that will play itself out over the next 12-24 months. Investments made by institutional parties in 2006-2008 in hotel companies are also approaching the end of their investment horizon and will lead to some transaction activity over the next 12 months. Opportunities We continue to believe that there are significant opportunities across hotel positioning in the MICE segment. While they wait for the development of full fledged convention centers across various cities, hotel developers are increasingly taking matters into their own hands and building hotels with extensive meeting and conference facilities. The ITC Grand Chola in Chennai and the Sheraton and Vivanta by Taj in Bengaluru are some examples of this phenomenon. We believe that there is need for meeting and conferencing facilities across Tier 1 and Tier 2 cities and investors should look into the potential of this segment in their respective markets and

capitalise on the opportunity. Environmental sustainability in hotels has quickly transformed from an optional philanthropic activity to one that bears close scrutiny in order to control spiraling operational costs. Where utility costs stand at seven to nine per cent of a hotel’s operational expenses, this number is getting bigger given the increasing demand of electricity from power plants and rapidly declining water availability, especially in India. An investment in environmental sustainability is returned several times over in terms of instantaneously reduced operational costs, stable utility rates, and guaranteed availability of resources in the upcoming years. A 10-20 per cent reduction in energy consumption can be readily achieved through no-cost and low-cost measures, and can amount to a hefty two to four per cent of the hotel’s GOP margin. An interesting development is currently unfolding for Indian tourist destinations. According to our research and discussion with some of the larger tour operators, HVS is aware that there is a buyer pressure for India, which is building. With the recent troubles in the Middle East, countries like Egypt, Syria, Lebanon and Jordan that used to attract a fair number of western tourists and also Russian tour groups, are no longer seen as safe destinations for tourism. Thus, these large tour operators are looking for alternate destinations and India possibly could be a beneficiary but for its lack of adequate tourism infrastructure. The basic problem is that hot spots like Goa simply do not have enough capacity to absorb these tourists, as we are talking about a few million tourists that need to be accommodated in a single season. While this may be a temporary phase there is an opportunity to convert this demand into a stable source of business for hotels and make it a long term trend. Unfortunately, another factor that goes against India is the high cost of air travel within the country on account of very high fuel costs which today account for 50 per cent or more of the operating cost of airlines. In fact if there was one single factor that we believe can continue to adversely impact hotel occupancies in India it would be the high cost of air travel, which is forcing Indians to stop traveling within India and explore cheaper options outside of the country. Even business travel within India is down as airfares have gone up by nearly 100 per cent in the past 12 months. Traditionally, Goa has been the favourite hot spot for leisure tourism in India. However, a heartening development has been the emergence of Kashmir as a destination for local tourists. Two hotel chains – Vivanta by Taj and The Lalit have opened hotels here and they are both exceeding market expectations. We hope that in times to come, more people will consider developing hotel products in Kashmir as it has tremendous potential and will also help bring normalcy back to the region. In the south in Kerala, Bekal is becoming a new hot destination. Two new hotels, again Vivanta by Taj and The Lalit, are providing a unique new holiday experience to guest travellers. We believe that developing good upscale hotels in new leisure locations is a growing trend and will help to expand tourism in India. ■ The authors Kaushik Vardharajan is managing director, HVS Hospitality Services-India and Yashaas Rajan is consulting and valuation analyst at HVS October 2012 hotelscapes

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report

50,000 hotel rooms in top six cities in the next five years: C&W-CII report

C

Cushman and Wakefield-CII released the report ‘Indian hospitality story 2012 & beyond’ at the 4th International CII Hospitality Fair 2012.

ushman & Wakefield (C&W ), India’s leading real estate consultancy firm jointly launched the research report with Confederation of Indian Industries (CII) titled ‘Indian Hospitality Story 2012 & Beyond’ at the 4th International CII Hospitality Fair 2012 which was held in New Delhi. The report was released on the first day of the three day exhibition by Honourable Minister of Tourism, Subodh Kant Sahai. In this report Cushman & Wakefield evaluates the hospitality sector dynamics of top six cities of India – Bengaluru, Chennai, Delhi, Hyderabad, Kolkata and Mumbai and provides an overview on the performance, growth and outlook of the Indian hospitality industry. According to the report, the top six cities of India are expected to see a total of 50,000 new hotel rooms across categories in the next five six years. This is in response to the steady growth the hospitality sector has recorded over the last few years. 2012 alone is expected to see 14,800 fresh keys by the end of the year. Out of the total expected supply for 2012, 2,000 new hotel rooms have already entered the market. Akshay Kulkarni, regional director – hospitality, South and South East Asia, Cushman & Wakefield says, “India’s hospitality sector has been witnessing interest from a variety of segments ranging from MICE, wellness tourism, spiritual and pilgrimage tourism, apart from the traditional business or leisure travel. The demand has been strong from both foreign as well as domestic tourists. Given the rather diverse nature of demand, the hospitality industry is also looking at creating adequate products to service the varied tourist requirements. With the support and initiatives by the governments at vari48

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ous levels, the hospitality sector is moving towards comprehensive growth.” NCR, with a total room supply of 17,500 rooms, is expected to see the highest fresh hotel room supply in the next five years. Mumbai (10,200) and Bangalore (9,400) will also see significant addition to the existing inventories in the city. The addition of new inventory will be concentrated in the potential growth areas especially around airports, commercial growth corridors, industrial corridors

and SEZs. These micro markets emerged as a result of business centres that were created in these cities due to growth in IT/ITeS, trade and commerce. Hotel supply (No of rooms) City wise H1-2012 Bengaluru 400 Chennai 160 Hyderabad 430 Kolkata 0 Mumbai 300 NCR 830 Total 2,120

H2-2012 Upcoming 3,800 9,400 2,200 5,150 160 3,720 150 4,500 1,540 10,200 5,000 17,550 12,850 50,520


report The top six cites witnessed an average occupancy of 58 per cent with an average room rate (ARR) of INR 5,400 in HI 2012. The current averages record a marginal decline of four per cent in average occupancy rates (AOR) and five per cent in ARR over the average of 2011 (full year) performance. Chennai recorded the highest average occupancy rates (AOR) of 64 per cent for H1 2012, followed by Mumbai (61 per cent) and Kolkata (60 per cent). All the cities witnessed only a marginal drop in AOR when compared to the previous year 2011. Mumbai and Kolkata saw the maximum dip in AOR. A decline in AOR in popular destinations was due to a number of factors but primarily due to addition of supply in major cities in H1 2012. On the other hand, a moderate slowdown in global economies led many corporations to curtail travel, while individual travelers have also been cautious due to fiscal uncertainties. Some other factors that have obliquely contributed to lower AOR are the advancements

in technologies which make real time correspondence faster, easier and more cost effective and increase connectivity that ensure lesser hours of stay per visit. A corresponding decline in ARR was noticed as hotels tried to ensure occupancy even at a moderately lower cost. Healthy competition in many of the cities is leading hotels to create monetarily attractive packages for potential visitors. In H1 2012, Mumbai recorded the highest ARR of INR 6,400, followed by NCR INR 6,280 and Bengaluru INR 4,915. While Chennai and Hyderabad witnessed marginal increase in ARR, all other cities saw the rates as wither stable or softening over 2011. City Wise Bengaluru Chennai Hyderabad Kolkata Mumbai NCR Average / Total

Average Occupancy Rate 2011 H1-2012 59 per cent 57 per cent 67 per cent 64 per cent 54 per cent 53 per cent 66 per cent 60 per cent 67 per cent 61 per cent 63 per cent 58 per cent 62 per cent 58 per cent

Akshay Kulkarni regional director – hospitality, South and South East Asia, Cushman & Wakefield

India’s hospitality sector has been witnessing interest from a variety of segments ranging from MICE, wellness tourism, spiritual and pilgrimage tourism, apart from the traditional business or leisure travel. City Wise Bengaluru Chennai

Average Room Rate 2011 H1-2012 5,740 4,915 4,700 4,900

Hyderabad Kolkata Mumbai NCR

3,790 4,900 6,395 6,555

3,830 4,770 6,400 6,280

Average/Total

5,723

5,444

Kulkarni adds, “Occupancy rates may see an upward trend in the second half of 2012 keeping ARRs steady. However since there is a substantial supply that is expected to enter the market over the new few years, the pressure on occupancy rate and ARRs, will continue. The phasing of the new inventory and gradual growth in the demand for hotels will help keep the rates at modest levels across the country. However going forward we expect ARRs to improve in the next 12-18 months on account of stability in economy and expected growth in tourism in India. Also with more and more international brands operating in the country, the market will move towards being more organised and standardisaOctober 2012 hotelscapes

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report tion of process including cost per room night.”

City trends Bengaluru Bengaluru has a total inventory of 16,000 keys as of H1 2012 with organised segment comprising 68 per cent of the total inventory. The city recorded a marginal decline in occupancy rate to 57 per cent, over 2011 while average room revenues declined by 15 per cent during the period as a few hotels that did become operational were primarily in the budget and midscale segments. AOR declined due to an increase in the total number of rooms in the city, while demand remained steady, the proliferation of mid scale hotels was largely responsible for a decline in the ARRs for the city in the first half of 2012. Going forward, the city has a pipeline of supply of 9,400 rooms over the next five six years. Most of the hotels will be developed in the luxury, midscale and budget categories. As Bengaluru is primarily an IT/ITeS center for business travelers and a gateway to Southern India for leisure travelers, this trend is substantiated. Kulkarni says the second half of 2012, will see moderate increase in ARRs with the beginning of festival seasons and robust passenger arrivals as observed for the previous years. MICE is one of the strongest demand segment in Bengaluru, given the penetration of IT/ITeS in the city.

Chennai Chennai recorded the highest occupancy levels amongst the top six cities at 64 per cent. ARR in H1 2012 was recorded INR 4,900 recording an increase of approximately four per cent over 2011. Being a manufacturing and industrial center, hotels in Chennai cater to many long stay guests. MICE is also a significant demand segment in the city as various automotive and pharmaceutical conferences are organised in the city. This is evident in the stable occupancy rates and room revenues. The total inventory for the city is 6,187 hotel rooms in H1 2012 of which 92 per cent belongs to the organised sector. The cities inventory had grown by almost 32 per cent since 2008 till the first half of 50

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2012. The impact of the economic downturn had delayed a few hotel projects during the last year with only 160 rooms delivered in H1 2012. However a number of projects have been revived with over 5,000 rooms planned over the next five six years. The city is expected to see an increase of nearly 36 per cent in luxury segment, followed by 20 per cent in the midscale segment, 13 per cent in the budget segment, 7 per cent in the upper upscale, and 6 per cent in upscale segment. Also it is expected to see a more competitive environment in the luxury segment with the introduction of a number of significant luxury properties. Kulkarni says “given the demand segments, the average business traveler to the city is price sensitive. Many hotels are currently being developed in the budget and midscale segments. However, Guindy and Marine Drive are the micro markets with an array of luxury hotels – existing and upcoming. The hotels around the

airport provide a good mix across all categories.”

Hyderabad Hyderabad has been a sluggish market for hotel performance as it has been gripped by some internal disturbances that keep arising in the region. The occupancy levels experienced by hotels have been hovering around 53 per cent in the first half of 2012. The trend is likely to continue till the government stimulates a positive sentiment around for business and leisure visitors. Approximately 3,700 rooms are expected in the market in the next five six years and of the total expected supply 6 per cent will be for luxury, 25 per cent in upper upscale, 16 per cent in upscale, 33 per cent in midscale and 20 per cent in the budget segment.

Kolkata Kolkata has a total hotel inventory of


report 3,900 rooms of which 72 per cent is in the organised sector. The city has not seen many new hotel developments in the recent past. The occupancy level of the city has declined from 66 per cent in 2011 to 60 per cent in H1 2012.ARR however remained unaffected. This may be accorded to the fact that Kolkata now has better connectivity from many other locations of the country. The number of flights has increased over the past year enabling the business travelers to return the same day. Kolkata is expected to see a total of 4,500 new keys in the next five six years which would nearly double the present hotel room inventory. Out of the current upcoming supply, it is expected that Kolkata will experience an increase of 33 per cent in the upscale category, followed by 29 per cent in the luxury category, 22 per cent in midscale, 13 per cent in upper upscale and 3 per cent in the budget segment.

Kulkarni says, “The restraint in hotel development activity is likely to change in the city and the projects which have been delayed due to various reasons will also be revived.”

NCR, with a total room supply of 17,500 rooms, is expected to see the highest fresh hotel room supply in the next five years.

Mumbai Mumbai has a total inventory of 18,500 rooms as of H1 2012, with organised segment comprising 76 per cent of the total inventory.  With AOR of 61 per cent, Mumbai recorded a decline of 6 per cent in occupancy rate in H1 2012. ARR however, has remained stable. Mumbai being a perennial market for the hospitality sector, the market has been witnessing steady demand from both business as well as leisure travellers. However, due to addition of a few hotel rooms in the beginning of the year, AORs have declined. A total of 10,200 keys are expected in the next four five years of which majority supply will be in the upscale segment,

followed by midscale and luxury hotels. Kulkarni says, “The last quarter of the year is the most productive quarter for Mumbai and recovers for the relatively slower months during Q2 and Q3. Also the city is expected to witness a pipeline of 10,200 keys in the organised segment in the next four five years and thus the pipeline indicates an equilibrium that will be achieved with hotels operating across all categories in the various micro markets.”

NCR The city witnessed a supply of approximately 800 rooms in H1 2012 while 5000 rooms are expected in H2 2012. There has been a slowdown of 3 per cent in AOR and 4 per cent in ARR in H1 2012 over 2011. We expect this to continue for a short to mid term period due to substantial supply that is expected in the city. Despite this downward trend, the inherent demand of the city remains as it’s a significant business centre with the international airport, which records the highest number of arrivals across the country. NCR’s hospitality market is substantially covered under seven main regions and in H1 2012 hotels in Noida have highest occupancy levels (65 per cent), followed by Delhi (64 per cent) and Gurgaon (61 per cent). However, average room rates are the highest in Delhi, followed by Gurgaon. Further it is expected that 25 per cent of the total inventory will come from the midscale segment, followed by luxury (20 per cent), upscale (18 per cent), upper upscale (16 per cent) and budget (10 per cent).  Kulkarni says, “The city will see the maximum influx of inventory over the next five six years, with 17,500 keys in the pipeline in the organised segment. Also the hospitality district near the international airport is perceived to be a game changer and the first of its kind development in the country.” ■ October 2012 hotelscapes

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trends

Shopping arcades: money spinners for hotels Shoppers ideally choose to indulge in shopping activities within close proximity to their accommodation while they are travelling on business or leisure. Shopping arcades within the hotel premises hence not only add to the hotel aesthetics but also allow the guests to indulge in some retail therapy basked in the architectural marvel. Hotelscapes talks to hoteliers and hospitality experts to know more about this symbiotic relationship between these hotels and their shopping arcades. 52

hotelscapes October 2012


trends

Grand Hyatt, Mumbai

David Mansfield, area director & general manager

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uxury five star hotels aim to provide its guests with facilities that encompass all aspects of a traveller’s needs — be it dining, entertainment, conferences, meetings or shopping. A shopping arcade in a five star property serves guests more benefits than one as they can shop for both local and international brands under one roof without having to travel much. An eclectic mix of business travellers and foreign tourists serve as the clientele for the Grand Hyatt Plaza, our shopping arcade. Also residences and local guests that frequent Grand Hyatt Mumbai regularly for dining at our award-winning restaurants, have taken a liking to the domestic and international brands on offer at our shopping arcade. People on their visits like to indulge in a variety of activities in their free time including shopping, dining, sightseeing. Stretched across two floors, our 100,000 square feet Plaza houses a gamut of highend brands like Versace Collection, Bandhej, Bang & Olufsen, Hugo Boss, Luxe Box, Montblanc, Omega, Salvatore Ferragamo, Popley, Bina Goenka, Vertu, Tween, Cadini, La Scarpa, Tag Heuer amongst others. Our Plaza hence enhances our guest experience and encourages them to spend more quality time within the hotel premises, thus avoiding travel time. We are glad that the Grand Hyatt Plaza is very well in accordance with our business model, availability of space and the patrons we serve, making it a state of the art shopping complex nestled within our premises.

David Mansfield area director & general manager, Grand Hyatt, Mumbai

A shopping arcade serves guests more benefits than one as they can shop for both local and international brands under one roof without having to travel much. October 2012 hotelscapes

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trends

Philippe Charraudeau vice president & GM, ITC Grand Chola, Chennai

Though translating footfalls into revenue would be up to each brand’s offering and visual merchandising, a shopping arcade will add value to the hotel as much as the hotel will add value to the arcade.

ITC Grand Chola, Chennai

Philippe Charraudeau, vice president & general manager

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Jay Rathore VP & general manager, The Oberoi, New Delhi

Our shopping arcades are in a mutually beneficial partnership with us. They get the necessary footfalls owing to our location and reputation and serious clientele who end up purchasing the goods. 54

hotelscapes October 2012

hopping arcades are an additional incentive for guests at a five star property as long as they feature brands with the same image quotient. This will add to the overall experience of the guests primarily those who are on leisure and incentive visits. ITC Grand Chola is a premium luxury integrated complex that will have a luxury retail arcade spread over 27,000 sq ft. Unveiled in the second phase of the hotel’s opening, it aims at housing roughly 13 high-end, premium luxury labels. These shopping arcades not only cater to the discerning guests with high aspiration levels but their presence within the hotel also encourages some impulsive buying. Moreover shopping arcades generate large number of footfalls. Though translating footfalls into revenue would be up to each brand’s offering and visual merchandising, a shopping arcade will add value to the hotel as much as the hotel will add value to the arcade. The luxury arcade will also draw the local luxury aficionados to the hotel and by doing so will expose the brand to potential new guests.

The Oberoi, New Delhi

Jay Rathore, vice president & general manager

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e have a shopping arcade since it adds a certain buzz to the hotel. Being quite particular about the brands that are associated with us, we constantly try to seek synergy in our brand associations. The brands that are present in our hotel are world leaders in their own right suiting best to the travellers and local city residents we serve. We make sure the shopping arcades in our hotels make enough business from being present in our premises. Our shopping arcades are in a mutually beneficial partnership with us. They get the necessary footfalls owing to our location and reputation and serious clientele who end up purchasing the goods instead of engaging in window shopping. Moreover, the presence of these brands not only generates business for them but also for us in more ways than one. Also, the presence of such


trends

high-end brands lends a good amount of value proposition to our property. Every hotel offers an array of amenities to their guests. We feel having a shopping arcade is one amenity we can offer, making their stay with us even more luxurious. Brands like Damiani, Gucci, Hermes, Burberry, Ermenegildo Zegna and Brioni reside within our spaces among others. We even house Indian brands like Saffronart, Hamadan and our very own in-house boutique Tijori to have an assorted selection of both international and domestic names.

Hospitality & Leisure, Knight Frank (India) Pvt. Ltd. Abhijeet Umathe, senior manager

T Abhijeet Umathe Senior manager-hospitality & leisure, Knight Frank (India) Pvt Ltd

Though shops are a classification requirement for every hotel to obtain a three star rating and above, shopping arcades add to the ambience and provide an additional service to guests to complete their getaway.

hough shops are a classification requirement for every hotel to obtain a three star rating and above, shopping arcades add to the ambience and provide an additional service to guests to complete their getaway. The clientele of these shops is quite specific to the hotel location, vicinity to other shopping areas and more importantly merchandise on display. Varying from property to property, the spaces allocated to these arcades also depend on the performance of the asset. Though the well heeled Indian who is our clientele is well travelled and places like Dubai, Singapore and Hong Kong are not too far away, stores here end up increasing the brand awareness and the benefits might accrue internationally. Shopping has direct impact on the F&B revenues and also gives the guests another reason to visit the hotel. The revenue to the hotel can come from the rentals, which are usually high while the store gets on the-spot sales. Having a high end store within a high end hotel not only serves as a good advertising option but also segregates these high pedigree brands from the mass brands carving a distinct niche for them. Moreover, the rents are usually kept high for the same reason preventing the market forces to come and correct them. Most brands and merchandisers are in the category of either haute couture, signature prĂŞt-a-porter lines, dazzling jewellery, exquisite fashion accessories, elegant shoes, bags and perfumes. â–  by Avni Mehrotra October 2012 hotelscapes

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destination

Indian hoteliers look for opportunities abroad As growth crimps, and a wider perception of a slowdown grips the Indian economy, more and more established and newer homegrown hospitality players have frenetically begun eyeing expansion overseas.

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he $ 26 billion Sahara India conglomerate is all set to snap up New York’s iconic Plaza Hotel for $ 570 million. The deal for the 282-roomed luxury hotel, which saw $ 450 million makeover in 2008, will be the second major hotel acquisition by the behemoth after it bought the iconic Grosvenor House Hotel in London for 470 million pounds in December 2010. The Sa ha ra group which straddles para-banking, media, real estate, financial services and retail is also negotiating to buy out a clutch of Marriott Hotels in London valued at £ 750 million plus other properties as a part of its chairman, Subrata Roy’s global expansion game plan. In the Big Apple, Sahara is stitching up a deal to acquire 85 per cent stake in the US based Indian industrialist Sant Singh Chatwal’s flagship property Dream Downtown Hotel through its Mauritius-based subsidiary Aamby Valley. High-profile tycoon Roy, who owns a cricket team in the Indian Premier L e a g ue a nd pa r t- ow ns a Formula One racing team, is apparently keen to shore up his overseas business by snapping up undervalued iconic properties in the US and UK. The acquisitions will be a part of the group’s expansion into the hospitality business and Grosvenor House will be the gateway for the company to introduce some new business ventures internationally. The

group already owns and operates the 210-guest room Sahara Star hotel adjacent to the Mumbai domestic airport and the Aamby Valley City resort.

Overseas – an attraction for hoteliers Top rung Indian hotel firms like the Taj Hotels and East India Hotels (Oberoi Group) have always been at the forefront of international expansions. But now newer players like Sahara, Bird Group, Claridges Hotels, Sarovar Hotels, Zuri Group and Royal Orchid Hotels are also getting increasingly ambitious with their foreign forays. Indian luxury hotel chain, Bharat Hotels, which runs nine luxury hotels and resorts in India under the brand name The Lalit, acquired a 70-room heritage college, Lambeth College building, in London this April for conversion into a hotel. This will be the group’s second property abroad in recent times, with a project already under development in Koh Samui Thailand and another project in Dubai, too. The Bird Group also acquired marquee property Royal Park Hotel in London last year and is building six hotels in collaboration with the Thailand-based Dusit Thani in India. It is also looking at other markets like Greece and South East Asian countries for acquisitions. “New projects are vital for a company’s growth and with the right pace

The Bird Group also acquired marquee property Royal Park Hotel in London last year and is building six hotels in collaboration with the Thailand-based Dusit Thani in India. 56

hotelscapes October 2012

Bird Group London


destination

Sarovar Hotel

Oliver Martin regional general manager, The Claridges Hotels & Resorts

New projects are vital for a company’s growth. In the long term such forays not only strengthen the company’s portfolio and valuation, but also add to better business dynamics and economics.

sanjay sharma General Manager, The Westin

Polls consistently show Indians are overwhelmingly optimistic about their future. Indian companies today are cash-rich and very aggressive to expand globally. October 2012 hotelscapes

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destination and the right location such expansion results in sustainability,” opines Oliver Martin, regional general manager, The Claridges Hotels & Resorts. “In the long term such forays not only strengthen the company’s portfolio and valuation, but also add to better business dynamics and economics.”   The Claridges Group, adds Martin, has always leveraged new markets which facilitate and enable brand positioning and brand exposure in key feeder markets and new emerging destinations. “A brand and specially a group of hotels,” iterates Martin, “is always interested to have certain destinations in their portfolio to capture particular markets as well as feed from there to here. This also serves a strategic objective of the company and credits strength and valuation for the establishment.” According to Sanjay Sharma, GM, The Westin, with the influx of international chains into the Indian market, there is a growing trend for homegrown chains to spread their reach internationally.

Monica Malhotra Kandhari Director, MBD Group

Some of the developing nations provide a good platform for the Indian hoteliers to start their ventures as the real estate cost there is not too high and the supply for the hotel rooms is lesser than the demand.

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“Polls consistently show Indians are overwhelmingly optimistic about their future. Indian companies today are cash-rich and very aggressive to expand globally. The real estate prices in India have also simultaneously shot up, thus making it easier and cheaper for them to invest in acquiring properties abroad than in India,” elaborates Sharma. The hotelier opines that despite naysayers, India’s long-term economic strength will hold despite transitory turbulence. “While earlier, Indian companies were predominantly invested in countries where there was little technological competition recent trends show that Indian overseas investment is increasingly flowing to developed economies as well. This reflects the growing confidence of the Indian corporate and the availability of overseas assets at competitive rates.” Hotel consultants add that the value of properties available in international destinations like Europe work out to be higher than India. But they translate as better deals for prospective buyers as properties are evaluated on the business income they generate rather than real estate. “In the long run,” says a senior property consultant with the Reliance group, “it has a multiplier effect on the buyers overall business by upping their global profile and lubricating further overseas expansions. The low valuations of commercial properties in the wake of the Euro crisis have only helped this passage to the West.” Another reason for Indian hoteliers to eye overseas growth, say analysts, is because they are tiring of the corruption and bureaucratic delays that plague their projects in the country. Several projects, especially those involving first time developers have run into time and cost overruns. Some projects of India’s oldest hotel chain like the Taj group, especially under the mid-scale Gateway, brand are running behind schedule. The debt-laden Leela Hotels is also bedeviled by similar problems. Market expert HVS India states that of the 102,000 rooms currently under construction in India in the mid to luxury segment, only 75 per cent may come up in the next five years. With interest rates at least 300-400 basis points

higher than during the planning phase and significantly higher construction costs, several developers have suffered from a liquidity crisis leading to delay in putting new inventory on stream, says HVS. According to Monica Malhotra Kandhari, director-MBD Group, who launched the first five-star deluxe hotel in Noida (Radisson Blu Hotel MBD) and will soon be coming up with the first five-star deluxe hotel in Ludhiana, Indian hoteliers and the Indian hospitality brands have already made a mark for themselves in the international markets. So the next logical step is to step up their game abroad. “Indian hospitality players have been recognised for their superior service standards,” adds the award-winning hotelier/developer. “So there is an obvious reason for them to venture into interna-


destination tional markets. Apart from this, some of the developing nations provide a good platform for the Indian hoteliers to start their ventures as the real estate cost there is not too high and the supply for the hotel rooms is lesser than the demand.” K a ndha ri iterate s that she ha s always tried to seek the first mover advantage in most of her business and has had a decade long fruitful relationship with Carlson for its two star Radisson Blu properties in Noida and Ludhiana.

Most sought-after destinations Interestingly, apart from the UK and the US, East Africa too, has emerged as an interesting business opportunity for the Indians. A raft of established players like Sarovar Hotels and the Bangalorebased Zuri Hotels & Resorts are eyeing growth here. Zuri Hotels & Resorts,

backed by investors from Middle East, already operates a resort in Mombasa Kenya and is looking at constructing more hotels in the region. In fact Africa, say developers, is a key market where a lot of Indian companies are expanding. Sarovar Hotels is already operating two hotels in Dar es Salaam and Nairobi positioned as upscale hotels and is looking to expand further besides looking at opportunities in the Middle East. Martin believes that there are other potential and emerging markets for the Indian hoteliers that are economically viable. These include Sri Lanka, Vietnam, Cambodia, Laos and Myanmar which share borders with India and therefore could have some strategic ties. Mongolia, according to the hotelier, also has potential to be an interesting market for The Lalit London

destination vacation. The hotel industry in India, adds Westin’s Sharma, is going through an interesting phase. While Indian investors are eyeing growth overseas, the attractive land cost in tier two and tier three cities is attracting foreign chains to establish a toehold in the country’s mid-market hospitality sector. “The widening demand-supply gap in India’s smaller towns is making international brands rush in to offer services at different price points,” says Sharma. Another strong reason for the hoteliers high-powered expansion plans abroad, say experts, is that once Indian hotel firms achieve critical mass in the domestic market, they will look at international opportunities. Indian Hotels Company Limited (IHCL), the company which owns the luxurious Taj Group of hotels in India and abroad, and is the second biggest in India by the number of properties, has bought properties in Boston, New York and San Francisco. It has also forged management ties with properties owners in South Africa and Egypt. In other words, after having established a strong and sizeable pan-India presence, the real challenge for the hospitality players is to get to be known in the foreign market. Experts say Indian companies are looking for stand-alone properties in the US and Europe, which are up for grabs following losses they made during the global slowdown, and also to use them tap into the growing breed of Indian travelers. Thus the move for overseas expansion is also driven with the idea of tapping into the growing market of Indians traveling abroad. An estimated 10 million Indians travel for leisure and official visits every year. Outbound travel has grown by 7-10 per cent every year since 2009 with about 11 million Indians going abroad annually. Most leading international hotels have set shop in India and are introducing their brands across all categories. These hotel firms, say trade pundits, have strong loyalty programmes that help them drive occupancies into their hotels not only from international but domestic guests as well. ■ by Neeta lal

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events

Courtyard by Marriott, Mumbai International Airport organises a customer event

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rd by Marriott, Mumbai

The associates at Courtya

International Airport with

the guests

wenty guests with their families were invited for a weekend experiential at Courtyard by Marriott, Mumbai International Airport. They were offered a pampering experience which included a chauffeur driven home pick up and a special welcome drink. They were then escorted to Red Zen, the hotel’s award-winning pan-Asian restaurant. A Bollywood themed red carpet décor ensued, amongst live food stations and chaat counters. It turned out to be a fun-filled extravaganza as guests played Bollywood charades, games like guess the celebrity videos, posed at the Bolly photo booth and tried on wigs, sunglasses and more! They had a quiet dinner at MoMo Café, followed by a Sunday brunch and a late checkout with a personalised Courtyard gift. The event was a gesture from the hotel, thanking their guests for their association by way of a fun and interactive themed event, warm hospitality, efficient service and scrumptious meals at the hotel’s famous F&B outlets. ■

Guests engaging in fun Bollywood themed activities 60 hotelscapes October 2012


events

Beer and beyond-Oktoberfest at The Lalit, New Delhi

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laying host to fun and traditional German activities, The Lalit hosted Oktoberfest from 28th to 30th September. The festival was declared open by the ambassador Cord Meier-Klodt, following the age old German custom of ‘tapping the beer barrel’, where a tap needs to be hammered into a huge beer barrel and then opened to let the beer flow freely from it. Getting nostalgic while raising a toast to the occasion and the gathering, he expressed how this festival made him feel much closer to home in Hamburg, Germany. Klodt who is the deputy chief of mission, head of economic and global affairs, and acting ambassador attributed festivals like these as an important catalyst in augmenting cultural growth between the countries. Though talks on the political front keep happening between countries and their officials, it is these cultural forums that bring them much closer. One could see barriers being broken coupled with cultural camaraderie as people from various nations attended the festival and united over traditional German food and drinks. The festival fostered friendship by hosting a range of engaging games, competitions and participatory activities to keep the crowd involved as they chugged traditional German beer. The décor and staff was adorned in typical German fervor to maintain the sense of authenticity. The festival was followed by traditional German buffet spread and desserts for lunch and dinner. In the evening, the three-day event featured India’s biggest and Delhi’s very own band Parikrama, Autumn Home, Reggae Rajahs and Ska Avengers belting out their popular numbers as well as free flowing beer and scrumptious food. The festival definitely amalgamated the people of the two countries together and was an earnest attempt to pave way for more festivals like these! ■ by avni mehrotra October 2012 hotelscapes 61


events

Amitabh Bachchan brings in his 70th birthday at The Leela Mumbai

L-R: Keith Vaz, founder patron of Silver Star Charity, Amitabh Bachchan and Capt CP Krishnan Nair at the 70th birthday celebrations of Bachchan, at The Leela Mumbai

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iving legend of Indian Cinema and actor par excellence Amitabh Bachchan celebrated his 70th birthday with Padmabhushan Capt CP Krishnan Nair, Chairman, The Leela Palaces Hotels and Resorts at the beautifully adorned lobby lounge at The Leela Mumbai. The celebrations took place post the handover of the Mobile Diabetes Unit by International Patron of Silver Star Charity, Amitabh Bachchan, to Seven Hills Hospital, Mumbai. Speaking on the occasion, Nair, also the National Patron of Silver Star Charity said, “It is a privilege to extend my support to launch ‘Amitabh’, the Mobile Diabetes Unit for Mumbai, after the successful launch of ‘Captain Krishna’, India’s first Mobile Diabetes Assessment Unit in Goa in 2009. The unit has over the years helped improve the health of many people and I am indeed delighted to be a part of this noble cause.” Other dignitaries present at the event were Vivek Nair, Vice Chairman and Managing Director, Hotel Leelaventure Ltd.; Keith Vaz, founder patron of Silver Star Charity; Peter Beckingham, British Deputy High Commissioner and Dr Bhujang Pai, consultant and head department of Imaging, Seven Hills Hospital, amongst others. ■

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October 2012 hotelscapes

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awards

The Metropolitan Hotel & Spa wins International Hotel Awards

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Kenilworth Kolkata

he Metropolitan Hotel & Spa has won International Hotel Awards, held at JW Marriott hotel in Kuala Lumpur, Malaysia. International Hotel Awards, presided by Stuart Shield, honours the best hotels, hotel architecture, interiors, construction and design across the entire Asia Pacific, Arabia, Africa, Europe and America. This is a hotly contested competition, which includes categories for specific types and sizes of hotel. As attested by the organisers, the award is the undisputable evidence that The Met is capable of beating some exceedingly strong contenders within the keenly competitive hospitality arena. The award is a clear reflection of The Met team’s hard work, dedication and passion which continues to exceed guests’ expectations. Judging was carried out through a meticulous process involving a panel of over 20 experts covering every aspect of the hospitality business. Decisions on award winners were given by an expert panel of independent judges from a variety of disciplines relating to the design, development and marketing of property. ■

Kenilworth Hotel Kolkata and Kenilworth Resort & Spa Goa awarded by TripAdvisor T

accommodations listed on the TripAdvisor receive this award. “TripAdvisor is pleased to honour exceptional businesses for consistent excellence, as reviewed by travelers on the site,” said Christine Petersen, president, TripAdvisor for business. “The Certificate of Excellence Award gives highly rated establishments around the world the recognition they deserve. From exceptional accommodations in Beijing to remarkable restaurants in Boston, we want to applaud these businesses for offering TripAdvisor travelers a great customer experience.” Anjana Bharat, director of Kenilworth Group of Hotels, Goa & Kolkata, stated, “We are extremely delighted to receive the Certificate of Excellence by TripAdvisor. It feels particularly amazing to know that both, Kenilworth Resort & Spa Goa as well Kenilworth Hotel Kolkata have been so well appreciated among travelers. We shall continue providing services to the best of our abilities and ensure that our guests are delighted with our facilities and services.” If your ideal vacation is, to escape from the hustle and bustle of your rigid routine and busy lives to indulge in luxurious comfort, relaxation and exquisite culinary delights then, pamper yourself with an experience you’ll never forget at Kenilworth Kenilworth Hotel Kolkata Hotel Kolkata and Kenilworth Resort & Spa Goa. ■

ripAdvisor, the world’s largest travel site, operating in 30 countries worldwide with over 50 million visitors monthly and over 60 million reviews and opinions has awarded Kenilworth Resort & Spa Goa and Kenilworth Hotel Kolkata with the 2012 Certificate of Excellence Award. The accolade, which honours hospitality excellence, is given only to establishments that consistently achieve outstanding traveler reviews on TripAdvisor and is extended to qualifying hotels not just in India, but worldwide. Only 10 per cent of the

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awards

Vivanta by Taj - Whitefield wins the ‘Best Commercial Building’ at the LEAF Awards 2012 The hotel has been recognised for its design marvel.

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ivanta by Taj – Whitefield, Bangalore has won multiple awards in the design area. The most admired edifice has bagged the ‘Best Commercial Building’ award by the prestigious Emirates Glass LEAF Awards 2012. The hotel has been designed by WOW Architects Warner Wong Design. The directors of WOW attended the ceremony in London where they were presented with the prestigious award. LEAF Awards recognise the architects designing the buildings and solutions that are setting the benchmark for the international architectural community. It is an international competition in its ninth year, and the previous winners include Zaha Hadid, David Chipperfield, SOM and Steven Holl. Maahesh Aiyar, GM, Vivanta by TajWhitefield, Bangalore said, “We are delighted to win the ‘Best Commercial Building’ title at the prestigious 2012 Leaf Awards. It recognises the distinction that is found in exceptional creativity in design and architecture. The unique project of Vivanta by Taj-Whitefield, Bangalore has set a mark for innovation for architects around the globe. It will stand as a beacon of innovation in this technology driven city.” The Taj team worked with Warner Wong Design, Singapore to address the

Cascade the stairway needs of–the discerning business traveler, whilst redefining the hotel as a social and contemporary cultural hub for both the IT Park and the local population. Nature and technology is central to the design concept of Vivanta by Taj-Whitefield, Bangalore, with designers using digital imagery of the surrounding landscape as a basis for its plan. The hotel now resembles a digitised version of its surroundings. The pleasant climate of Bangalore, as well as low height restrictions, was pivotal to the design. The end result is a playful mix of transparency and layering within the interiors and exteriors. The podium of the hotel forms a

The lobby

mobius strip, with its twists and folds extending the perception of space and blurring the distinction between building and ground, architecture and landscape. The hotel’s three stories hover above the ground level with the 199 rooms flexing their way around the site. Public and private spaces twist and flow in an endless promenade of spatial experiences, drawing references to traditional Indian dance forms. Sustainability plays a key role, with the landscaped grass plane reducing the heat of the building. Rainwater is also harvested from here and channeled for reuse. Vivanta by Taj-Whitefield, Bangalore is located 45 km from Bangalore Airport, at the entrance of the International Tech Park Bangalore (ITPB). Business facilities at the hotel include OVAL-a 24-hour business centre, webcast and videoconferencing facilities, secretarial and translation services, as well as mobile phones, SIM cards and portable printers for hire. The in-room dining, fitness centre and laundry services all operate on a 24-hour basis as does the hip diner, Latitude, serving a range of world cuisine around the clock. Other restaurants and bars include Tease, Terracotta and Caramel, offering everything from casual all-day light meals, to exotic cocktails and formal fine dining. ■ October 2012 hotelscapes

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People ITC Maurya

With a successful stint as area manager, Bengaluru hotels and general manager ITC Gardenia, Anil Chadha has now moved to Delhi as general manager, ITC Maurya. An alumni of the ITC Hospitality Management Institute, Chadha brings with him extensive experience of both luxury and resort properties. In addition to his stint at ITC Gardenia, ITC Windsor and ITC Sonar, Chadha was instrumental in the launch of Kaya Kalp – The Royal Spa at ITC Mughal, securing the Tatler Award for the world’s best city spa in the first year itself. He has had previous stints at ITC Maurya as the F&B manager and resident manager.

Kempinski Ambience Hotel Delhi

Aditya Singh has been appointed as director of sales and marketing at Kempinski Ambience Hotel Delhi. He will be spearheading the room sales, catering sales, marketing and revenue divisions in addition to building and honing a dynamic sales team. With a wealth of knowledge of the Indian hospitality sector spread over 17 years, Singh is a seasoned expert in various aspects of sales and marketing. Singh graduated from IHM, Pusa, New Delhi and has an advanced certificate course in professional selling from National Institute of Sales. Manish Nambiar has been appointed as the hotel manager for Kempinski Ambience Hotel Delhi, to replicate the success he delivered in Africa, Asia and the Middle East. He brings with him over 16 years of hospitality experience. Nambiar will be responsible for directing the pre-opening activities relating to finance, marketing and guest services, and will be conceptualising restaurant themes and designs, developing vendors, and operating supplies and equipment identification and procurement. Nambiar completed his European Executive MBA from Reims Management School. 66

hotelscapes October 2012

The Westin Pune Koregaon Park

The hotel has introduced its new director of finance Pravin Lembe. He joins the hotel with a wide ranging experience of 21 years out of which he has spent 11 years in the hospitality industry. A chartered accountant, Lembe joins from Oakwood Premier where he was the director of finance. He has been previously associated with Grand Hyatt Mumbai, Orchid, Le Royal Meriden and Oakwood Residence. He has also been associated with Six Senses – Soneva Fushi Maldives and Elite Suites Bahrain. Associated with The Westin Pune Koregaon Park for the past two years, Megha Ajgaonkar has been promoted as director of sales and marketing. She has an experience of almost 10 years in the hospitality industry. After getting comfortable in the hotel industry, Ajgaonkar ventured into real estate and media. In both stints, she rose above, led not only her teams but also, herself to success. She was a part of the winning team of The Westin Pune Koregaon Park which was adjudged the Hotel of the Year 2011 of the Starwood Hotels & Resorts Asia Pacific Division.

Courtyard by Marriott Mumbai International Airport

Sherman Almeida has been elevated as the director of food and beverage (F&B) at Courtyard by Marriott, Mumbai International Airport. He joined the hotel as the F&B manager when the hotel opened its doors in April 2011. As the director of F&B, Almeida will overlook the kitchen operations of the hotel. He will also administer the banquet facilities, events and conferences. He has with him eight years of well rounded experience in restaurants and bar operations. He holds a graduate degree from St Xavier’s College, Mumbai and a degree in hotel management and catering technology from The Institute of Hotel Management, Aurangabad.


People The Westin Mumbai Garden City

Kallol Saha has been appointed as training manager at The Westin Mumbai Ga rden City. Saha has over six years of experience in the industry and his previous assignment includes training manager at The Westin Sohna-Gurgaon Resort & Spa and assistant manager training and HR at The Leela Kempinski Gurgaon. He completed his bachelor of hotel management from PES Institute of Hotel Management. Pallavi Gore has been appointed as Heavenly Spa and Recreation manager for The Westin Mumbai Garden City. Gore completed her diploma in cosmetology from Carsten Aveda Institute, New York and diploma in esthetics from Atelier Esthetique Institute of Esthetic, New York. She has over five years of experience and her previous appointment includes spa manager at The Leela Kempinski and Taj Lake Palace, Udaipur.

Cushman & Wakefield

Manish Aggarwal has been appointed as executive director, India as the North India operations lead for all service lines of the global real estate consultancy. He will be responsible for providing strategic direction to Cushman & Wakefield’s Northern India business and facilitate enhanced service delivery. He will also focus on identifying new business avenues and evolving innovative and sustainable solutions that provide value to partners and clients. Prior to taking on this new role, Aggarwal was the executive director, capital markets for Cushman & Wakefield India. Working with C&W for over 11 years, Aggarwal managed the retail and office leasing business and was then entrusted with starting land and industrial business in India. Aggarwal is a commerce graduate and an MBA.

IATO

Mahalingaiah has been appointed as the Karnataka chairman of Indian Association of Tour Operators (IATO), the national apex body of tour operators that has over 2,000 members in India and abroad. Manu will be responsible for all IATO activities in Karnataka and will conduct hotel/ tour operator’s inspections in the region. He will also represent IATO for all meetings with India tourism and Karnataka tourism.

DoubleTree by Hilton Gurgaon-New Delhi NCR

Chef Rachid Choukki has been appointed as chef de cuisine of Casablanca, slated to be the city’s first Moroccan specialty restaurant. Chef Choukki joins from Atlantic Palace Agadir, Morocco, where he held the position of sous chef. A Moroccan national, the chef brings with him twelve years of combined experience gathered after receiving an associate of art degree (AA) in culinary technician and chefs from Pratique et Theorie, Marrakech, Morocco. Prior to that, he was associated with Hotel Mazagan Beach Resort, EL Jadida, Morocco.

Radisson Blu Hotel New Delhi Paschim Vihar

Chef Dheeraj Mathur has been appointed as head chef at Indyaki – the Indian specialty restaurant at Radisson Blu Hotel New Delhi Paschim Vihar. Chef Mathur began his career with Le Meridian Hotel in Delhi in 2000. After attaining experience in Indian section at Trident hotel Cochin, the chef moved to Radisson Hotel Delhi in 2003, where he mastered the art of Indian cuisine. After a tenure of three years, he was promoted as sous chef at The Great Kabab Factory, Radisson Hotel Varanasi. Later he joined Taj Hari Mahal Hotel in Jodhpur as a sous chef. October 2012 hotelscapes

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Products... Notion-Luxury Flooring Concepts launches Laminate Flooring Series Choosing the perfect flooring for home is more of an investment. Unlike paint, you cannot change it regularly. Laminate flooring hence, not only adds value to your home but also lends to it a sense of warmth and sophistication. Moreover, it easily matches any decorating style and design and seamlessly works with any room in the home. Laminate flooring is resistant to many of the outdoor agents that can discolour other flooring materials. The wear layer protects it from stains and smudges due to dirt and mud making it a great material for hallways and entryways. It also resists fading from UV light exposure making it popular in sun rooms. Keeping this in

mind Notion-Luxury Flooring Concepts have launched the Laminate Flooring Series – Loft, Suite, Studio and Basal with 5G-Lock profile. Loft combines a creative atmosphere and robust aesthetic with a high degree of practicality. The collection strengths are displayed to their best not just in business premises, shops and restaurants, but also in the modern work-at-home lifestyle of young people. The Suite’s complimentary finishes allow large areas to be visually divided, highlighting the different uses of living and work space which is easy to personalise with furniture or other splashes of colour. The Studio series gracefully lends itself to

uses all over. It is equally suited to functional kitchens, to children’s rooms, to studies as well as stylish living areas. The Basal series has something for everyone as it has unlimited applications. Laminate Flooring at Notion is available in lots of finishes like chrome, oiled, silk matt, brushed etc at Rs 110-204 plus taxes per sq ft. For more details call 0120-4000500 or visit http://www.notion.net.in

Antica Ceramica introduces Stone Passion Tiles Series One of the best ways to decorate a floor, tiles are most robust and long lasting than wallpapers, carpets, vinyls or any other home decoration item. They are available in gorgeous designs along with endless combination of colours, styles, and shapes to suit every household including traditional, contemporary, and modern style. Stone Pa ssion Ti le s S er ie s from Domus from Ronda (Spain), launched by Antica Ceramics is a perfect option for walls and flooring for your home and workplace and allows you to create a unique environment tailored to your specific tastes. These beautiful looking tiles are made from naturally occurring substances, giving them a very distinctive look.  Placed between the cosmopolitan and rustic chic, these tiles are inspired by natural stone with re68

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liefs and hyper natural graphics decorating rooms ranging from rustic to contemporary, coating both walls and floors. Stone Passion collection opens a huge variety of applications for inside and outside use thanks to its reliefs and finishes and offers a natural stone coating making it an ideal product for a warm habitat. Their physical application can range from decorative walls, terraces, bathrooms, kitchens, home floors and halls where aesthetics you need may vary from rustic to classic and modern.  These tiles are cost effective a nd ea sy to ma inta in a s com pa re d to natu ra l stone s. T he Stone Passion Tiles Series is an ideal alternate to natural stones and emphasises on conserving the environment. They are priced at Rs 250 per sq ft. For more details call 011-25116195


Products... New washbasin design for the Starck 2 range by Duravit Though symmetry is the call of nature, things only start to get really interesting when they are blended with a minor divergence. This is what the redesigned washbasins of the Starck 2 range achieve. At first glance, the washing bowl appears circular, however, on closer inspection, it is revealed to be slightly oval – a minimal and ingenious nuance that gives the form

an organic, flowing character. The new Starck 2 washbasins are much finer and contoured. The conical widening towards the wall has been retained as a typical feature of the washbasin with wall connection. This preserves the established surface area that is a feature of the variants with pedestal or semi-pedestal. In the new model, the base of the bowl

is flat and sweeps vertically upwards through gently softened corners. Whether rich in contrast in high-gloss black varnish, in high-gloss white or a warm oak finish, the Starck vanity units are as elegant as they are spacious. For more details call +91 79-66112338 or contact pradeep.nair@in.duravit.com

GlacialLight launches eco-friendly LED flood light GlacialLight, a division of experienced technology manufacturer, GlacialTech Inc., has expanded its range of high-quality LED lighting products with the GL-FL12S, an LED flood light with a passive infrared (PIR) motion sensor available in two colour temperatures. The PIR sensor helps to save energy cost by only turning on when needed. Not only does the GL-FL12S save power by automatically turning on and off according to the user’s preference, it also converts electricity into light with unbeatable efficiency hence consuming far less power. Additionally, the GL-FL12S has an extremely long life span of 30,000 hours. With a typical eight hours a day usage pattern, these DC input LED flood lights can provide more natural, gentler light with

no perceptible flickering for over a decade without needing a replacement, slashing maintenance costs. With the environment in mind GlacialLight designed the GL-FL12S flood light to contain no hazardous chemicals, such as mercury, and to create no harmful radiation emissions such as UV or IR, making them more eco-friendly than traditional lighting.   Design of LED lighting products is based on three core technologies including electrical design (LED drivers), mechanical design (cooling devices), and optical design (lamp holders), respectively performed by GlacialPower, GlacialTech, and GlacialLight in the GlacialTech family. For more details visit http://www.glaciallight.com

New collection of trays from FCML Home To breathe new life into your servings, FCML Home brings to you a new collection of beautiful trays. Infused with colourful, kitschy and clean lined prints and motifs the trays add cheerfulness yet subtle sophistication to serving. Many products are inspired by graphics and prints in vibrant colours. These products provide an attractive presentation and are quite suitable as gift items. The trays are individually handmade from the finest Scandinavian Birchwood, specifically sourced for its fine grain and rare width. The trays have no joins and are made from single sheets of Birch thus so providing a high quality finish and longevity of use. All trays are dishwasher safe.

For more details call 9810374919 or contact upasna@fcmlindia.com October 2012 hotelscapes

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news snippets domestic

WelcomHeritage Noor-Us-Sabah Palace Bhopal adding 100 rooms

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elcomHeritage Noor-Us-Sabah Palace Bhopal, started operations in 1997 and is now a landmark in the city and a flagship property, under the WelcomHeritage banner. Hotel Noor-Us-Sabah Palace is part of Reliable Group of Bhopal. The board of directors of the company under the chairmanship of Sikandar Hafiz Khan has recently approved a capital expenditure of Rs 50 crores for the expansion of their existing hotel wherein 100 top of the line rooms, will be added, including 20 luxury suites, to meet the existing and anticipated demand

for luxury hotel rooms in Bhopal. The expansion also envisages a large state of the art gym, speciality restaurants, conference facilities with commercial spaces and multi-level parking. One of India’s leading architects Hafeez Contractor will handle the project and also the group’s prestigious housing project, coming up adjacent to the hotel premises. This was announced at the press meet at the hotel, addressed by Sikandar Hafiz Khan, chairman, Reliable Group; Sanjay Kirpal, CEO, WelcomHeritage Hotels; and Shankar Narayanan, director, Reliable Group. ■

The Leela Palaces Hotels and Resorts to launch Essence brand

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he Leela Palaces Hotels and Resorts is all set to launch its entry level five star hotel brand Essence across the country. The company plans to add up to 1,500 rooms in the next five years, taking its total to 3,500. Based on an estimated average cost of a room, the investments would work out to be in the region of Rs 1,500 crore. “We will be opening 10 new hotels with an average of 100 to 150 rooms. Right now, we have about 2,000 rooms. We will have a total of about 3,500 rooms in the next five years,” said vice chairman and managing director, Vivek Nair. The addition of new rooms includes plans to set up Essence by The Leela, he said, adding, “We are 70

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planning to open eight such properties across India, mainly in tier-II cities.” In the first phase, we will be involved in the design and architecture. The investment would be Rs 75 lakh to Rs 1 crore per room (for Essence), while investment for Leela Palace will be Rs 1 to Rs 2.5 crore per room. “We are discussing with three to four partners (for setting up properties under Essence). We would also go for projects, which can be later divested into a separate entity. We realised Rs 500 crore through our Kovalam (Kerala) property,” he said. On the company’s upcoming Chennai property, Nair said they have got a good response from several traders and

tourist operators for its exotic location. “I was told it will be a better hotel than the Leela Palace in Bangalore,” said he. The Chennai property, a sea facing hotel, would have 326 rooms. He also said they are setting up a property close to Taj Mahal in Agra at an investment of about Rs 200 crore, with all 110 rooms facing the Taj Mahal. “It will be spread across seven acres, facing Taj Mahal. We will be investing about Rs 2 to Rs 2.5 crore per room,” he said. Besides this project, the company is also coming up with a 100-room hotel near Gurgaon. The company at present manages hotels in Bangalore, Gurgaon, Mumbai, New Delhi, Goa, Kovalam and Udaipur. ■


international news

Resorts World Sentosa will open in December Marine Life Park will be launched on the grand opening day.

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esorts World Sentosa (RWS) announced 7th December 2012 as its official opening date, with a line-up of celebrations over that weekend to mark the occasion. Leading up to this festive occasion, is the opening of the second of its two anchor attractions – Marine Life Park. Housing more than 100,000 marine animals of over 800 species in more than 60 million litres of water, this attraction will be the world’s largest oceanarium. Marine Life Park (MLP) inauguration caps a list of 12 major launches in the 49-hectare integrated resort’s three-year history, which commenced with the ribbon cutting at four of its six hotels in January 2010. Raising the curtains for the grand opening festivities will be a ceremonial launch at the resort’s Lake of Dreams, public performances, and a 12-minute public fireworks display at its waterfront promenade. The world’s best-selling soprano, Sarah Brightman, will perform accompanied for the first time by the Singapore Chinese orchestra, in a gala dinner for 1,600 invited guests at the Resorts World Convention Centre. Tan Hee Teck, CEO of Resorts World Sentosa said, “Resorts World Sentosa set out to be the integrated resort that would transform Singapore’s tourism landscape, bring economic benefits to Singapore and contribute to the local community. With unwavering commitment by all stakeholders, we are proud we did it. When the new Marine Life Park opens, we believe we will help put Singapore in the pole position as the number one family destination in this region for many years to come. This is the only integrated resort in the world that a visitor can spend over three full days in engaging and fun-filled activities. We have six hotels, a major convention centre, a great maritime museum, a world-renowned spa, and two mega attractions – Universal Studios Singapore and Marine Life Park.” The world’s largest oceanarium will comprise two ticketed attractions, giving guests the option of either getting wet or staying dry. Adventure Cove Water Park will be the region’s only water park with marine life elements, while the Southeast Asia Aquarium (S.E.A. Aquarium) will be the world’s biggest aquarium, featuring over 100,000 animals including stars such as manta rays and hammerhead sharks. Dennis Gilbert, senior vice president of Attractions at Resorts World Sentosa, said that the park is created on an integrated edutainment concept that will give visitors insights into the fascinating marine world. “No other attraction in this part of the world comes close to Marine Life Park in terms of scope and concept. We believe Marine Life Park, being the world’s largest marine classroom, gives us the opportunity to put Singapore on the world map for innovative marine conservation and education programmes,’’ said Gilbert. Besides international research and conservation projects, Marine Life Park will also roll out programmes for local students from pre-school to tertiary levels, giving them the chance to interact with marine animals and learn from marine life specialists.

Whether it is the adrenaline rush on the water coasters or a deeper dive into the fascinating world of marine habitats, Marine Life Park has it all. More details on opening dates and ticketing will be made available closer to Marine Life Park’s opening. For more information and behind-the-scene exclusives, guests can check for updates on Marine Life Park blog at http://mlp.rwsentosablog.com. More on Marine Life Park At Adventure Cove Water Park, thrill seekers can enjoy an exhilarating splash at Southeast Asia’s first hydro-magnetic coaster, Riptide Rocket (a slide that takes riders upwards) or snorkel amongst thousands of fishes in the Rainbow Reef. The park will also feature sharks feeding, immersive experiences as well as interaction programmes with Indo-Pacific bottlenose dolphins next year. Over at S.E.A. Aquarium, visitors will venture on an inspiring journey to discover marine life and habitats that seafarers sailed over, from Southeast Asia to the African subcontinent and beyond. The highlight of this journey, and the centrepiece of the aquarium, is the world’s largest aquarium viewing panel. ■ October 2012 hotelscapes

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last page

HolidayIQ’s new Goa campaign for the smarter traveler

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olidayIQ, the premier holiday information portal powered by India’s first and biggest travel community, is all set to roll out “Goa to the power of HolidayIQ”, a first-of-its-kind initiative to make the peak season even more of a joyous celebration for all the travelers in ‘Golden Goa’. Starting from November 1, 2012 till February 2013, this innovative campaign promises to present the travelers with unlimited fun, unmatchable convenience and an unforgettable travel experience during their stay at the ‘land of sands, sun and surf’. Goa has always been one of the most popular destinations for travelers across the world and the launch of HolidayIQ’s “Goa to the power of HolidayIQ” campaign is designed to take the overall travel experience in Goa to a different league. Ensuring maximum reach, the campaign will see various marketing and promotional routes including OOH, ad commercials, launch of exclusive mobile applications, ‘hiqPAD’application especially made for Goa and other promotional events. HolidayIQ is known for its expertise in providing hotel reviews, content and information pertaining to holiday planning, especially using reviews from real travelers. HolidayIQ is pleased to partner with the celebrated singer and musician, Remo Fernandes for the campaign. At the outset, HolidayIQ and Remo will unveil the anthem of the campaign especially composed by Remo, a song that will embody the spirit of Goa and the campaign. In line with the company’s ongoing attempt to make holidays special for the travelers, this campaign will make the traveling experience of tourists much more personalised, easier and full of fun. For the campaign, HolidayIQ will tie up with more than 400 hotels, resorts, home stays and guest houses in Goa to enroll them into Review Direct,

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an engine which allows all guests to provide their personal feedback about any particular hotel or any other stay options on HolidayIQ. As part of the campaign, HolidayIQ will also be launching ‘hiqPAD’, a HolidayIQ branded tablet device with a pre-installed interactive application for guests to rate and review their hotel stay at check-out or during their stay at the hotel. ‘hiqPAD’ will be distributed to select hotels as a part of the campaign. In addition to collecting guest reviews that will be published on HolidayIQ, the ‘hiqPAD’ will also provide analytics and insights to the hotels to help them continuously improve their services. This campaign will end with an awards ceremony that will honour hotels based on the reviews generated on HolidayIQ from travelers. Commenting on the campaign, Hari Nair, founder and CEO, HolidayIQ stated, “We at HolidayIQ believe that a travel experience is never complete until you review your experience. In fact, HolidayIQ also believes that writing a review is a gift from one traveler to another. By writing a review, people are doing good to others. The self-gratitude of doing this is unfathomable and if you don’t believe this, write a review and experience the feeling yourself!” He further added, “Through this campaign, we not only hope to accumulate a good number of reviews but also aim to create a complete travel experience for our smart travelers. We are sure that this campaign will help in creating an unforgettable Goa holiday for everyone along with contributing to the growth of the tourism industry as a whole. The hospitality industry in Goa will gain immensely from this campaign as traveler reviews on the numerous hotels generated by HolidayIQ can be tracked and help them in building their brand image and establish their popularity.” ■


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RNI No. DELENG/2011/17937 Posting Dt. 22-27/10/2012 Reg No. DL(C) 01/1353/12-14

Date of Publication: 20/10/2012

Hokkaido is Platinum partner at Cinemascapes 2012 Come and meet the Hokkaido delegation

cinema tourism

An Event that Celebrates the Coming Together of Cinema & Tourism

24-25 October, 2012. Trident, Nariman Point, Mumbai

Bollywood and leading Indian film producers are hunting for locations in India and overseas 24-25 OCTOBER, 2012

THE TRIDENT Nariman Point, Mumbai

PARTNERS AND LEADING EXHIBITORS 2012

Email: cinemascapes@crosssectionmedia.com Website: www.cinemascapes.co.in


HS October