Hospitality Sector will Grow Consistently
With millennial and Gen Z travellers growing in numbers, it has become imperative for hotel developers to focus on creating spaces inclusive of experiences
THE HOSPITALITY and tourism sector in India has demonstrated resilience against current economic trends compared to other sectors affected by the slowdown in consumption. With the Government’s increased interest in the sector - evident in initiatives like e-visa policy and GST reduction - the sector’s performance is likely to be robust in coming years.
For instance, tourist arrivals on e-visa this past year was 23.8 per cent more than during the same period last year. Similarly, Foreign Exchange Earnings (FEEs) during 2019 rose by 7.4 per cent compared to the same period in 2018.
Opportunities and Challenges
There's been a notable transformation in the demand-supply proportions. At present, the industry is in the midst of an upcycle, driven by a slowdown in supply. The Tier I cities are likely to benefit the most due to the high barriers to entry. This is a huge opportunity for the hotel industry to capitalise market conditions for a strong run in next 4-5 years.
However, the restaurant business may play a smaller role in the growth story of the hotel industry. The strong emergence of stand-alone F&B operators has created a disruption in the industry, dividing the business between hotels and restaurants.
The New Disruptors
The world is changing at a pace never seen before. That includes the Hospitality industry. Tremendous amount of R&D is happening in the industry to cater to New Age guests, like identifying new uses of IT and creation of social spaces. Aggregators offering alternate accommodations are also being closely watched to develop counter-strategies.
The emergence of stand-alone dining options, cloud kitchens and food aggregators impact the F&B side of the business. With millennial and Gen Z travellers growing in numbers, it has become imperative for hotel developers to also focus on creating spaces inclusive of experiences.
Smart Technology Leads To Smart Choices
In recent years, technology has enabled hoteliers to offer distinct and hassle-free experiences to travellers. Artificial Intelligence (AI), Internet of Things (IoT) and other tools enhance the overall business performance by assisting in operational services. With the emergence of the millennial traveller with changing preferences, it is essential to maintain data about their choices to create customised experiences. Technology not only assists Human Resources (HR) with hiring, talent management and monitoring performances but also aids revenue management by providing analysis for cost-optimization and developing competitive pricing.
At Chalet we asses all new technologies and invest proactively based on the return on investment criteria.
A Longish Upcycle In The Next Five Years
With the Government focus on enhancing infrastructure along with better flight connectivity, the tourism sector is expected to grow consistently in coming years. The Government’s Swadesh Darshan Scheme comprises 13 thematic circuits in the country which have been selected for development of tourism infrastructure to boost domestic and international travel. These should give rise to multiple job opportunities, making the hospitality and tourism sector one of the key factors in economic growth by 2025. This plus the demand-supply arbitrage being favourable for the industry, all this points to a longish upcycle.
The Chalet Difference
Chalet has, indeed, come a long way! We are a company with a difference, where new thoughts and ideas are showcased in the way we function on a day-to-day basis. Our focus for the next five years is steady and rigorous growth in the most strategic locations of the country. We plan to locate our upscale hotel properties in Tier I cities with demand dense business markets and established commercial space development,.
Chalet Hotels have charted out socially responsible growth plans with ESG as the key theme for strategy.
For 2020, the company has chosen an aggressive and strategic expansion plan and already set the ball rolling through recent agreements signed with Hyatt and Marriott, respectively. The company also signed an SPA with Bellaire Hotels which owns the Novotel Pune, for acquiring 100% of the company in due course of time. Our focus is to strengthen partnership with globally recognised hospitality brands and maintain a presence in the luxury-upscale and upscale hotel segments.
The company’s management team derives its strategy from four pillars of strength which are an integral of the DNA of the promoter group - the K Raheja Corp. These strengths include the ability to site future growth market ahead of the curve, design and build hotel efficiently and then tie up the best global brands for industry leading operating performances.
This article was published in BW hotelier issue dated '' with cover story titled '5 Years Young & Just Begun'
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