‘Domestic travel bounced back with a vengeance in India in 2022’
Atul Jain, Chief Operating Officer – India, Sri Lanka & Bangladesh, Best Western Hotels & Resorts is highly bullish on India’s potential to support hospitality and tourism in the coming years
“Demand growth across all segments of hospitality shall remain robust and positive in 2023,” opines Atul Jain, Chief Operating Officer - India, Sri Lanka & Bangladesh, Best Western Hotels & Resorts. His belief is backed by the considerable revenue growth that all the hotels of the company have seen since July 2022 due to enhanced ADRs and occupancy levels that surpassed pre-COVID figures.
Best Western, an international chain of hotels, has a prominent presence in India, be it in the North, South or West and is now also foraying into the alternative accommodation and homestay space with ‘SureStay’ brand. For the chain, the recovery started with the hotels at leisure and pilgrim destinations, which were the two most significant contributors to the overall revenue jump, followed by the business and MICE segments, Jain shares.
Now, with 2022 coming to an end and 2023 around the corner, he touches upon the revival of the industry that the year witnessed and the trends that reshaped the sector. “It goes without saying that the pandemic and the resulting economic downturn and chaos caused by fluctuation in demand have had a significant impact on hospitality industry. It threw the market trends into disarray; everything that was being predicted and forecasted could no longer be relied upon. In my mind, one of the major contributors was the ‘pause’ owing to a series of lockdowns and uncertainty that triggered a change in the philosophy of life and lifestyle in people’s mind, which has and will govern the trends hereon,” he explains, adding that the trend of travelling with family to leisure and religious destinations picked up tremendously right after the lockdown was eased, followed by the growth in domestic business travel driven by the need for fiscal recovery.
“It is heartening to notice that the growth in business is sustained and looks positive in the coming years. The adaptation in the trend of how we do business – mobile bookings, social media, multi-channel distribution, technology, etc. – has also supported the reshaping of the hospitality industry, and going forward, they will remain an integral part of driving revenues,” he further says.
In the coming year, India has the G20 Presidency, a position that comes with immense opportunities for the country. This thought is echoed by Jain. “Being at the helm of the affairs, we can anticipate a surge in the MICE segment due new business deals and a high movement of delegates. Tourism would also get a boost as we’re going to be at the centre of attention, backed by the government’s ongoing schemes for the promotion of tourism, which would be highly beneficial to the hospitality industry and for generating employment,” he avers.
However, there are a few aspects where government can take some steps to aid the hospitality industry, Jain believes. The first of these is the real estate, which is very costly and hence, driving up the cost of construction of a new hotel. For this, he says, government can allow more FSI to make hotel ventures more viable. Another way the government can support the sector is by announcing rebate in GST rates so that the overall profitability of hotels can increase, Jain shares. “This will help the hoteliers cover up some of the losses they incurred during Covid19,” he explains.
While things have largely been positive for hospitality industry this year, and there has been much to celebrate, according to a business travel industry report, the cost of travel surged this year and is likely to rise again in 2023, which could potentially impact international tourism. On this, Jain says, “2022 has been a turbulent year for international travel due to the after effects of the pandemic on the economy, followed by the Russia-Ukraine war that led to a rise in global inflation with increasing fuel prices becoming the primary cause of concern. With most of the major economies staring at a looming depression, it will take some time for international travel to get back to or surpass the pre-COVID intensity. As per GBTA, airfares will rise by 8.4 per cent and hotel rates will increase by 8.2 per cent. However, this will not impact the revival of international tourism,” he avers.
This is because in the last quarter of 2022 and for 2023, an increased demand for air travel has been noticed after borders of almost all the countries have completely reopened, explains Jain. “And due to the travel rebound, hotel prices are expected to rise worldwide, which is indeed a positive news for the hospitality industry. Nevertheless, domestic travel did bounce back with a vengeance in India, which has helped in the recovery of the travel and hospitality in 2022 and in presenting an optimistic picture of 2023.”
With Jain looking at an optimistic India, he has plans to capitalise on the emerging opportunities in the country in the coming years. “Our strategy over the years has been consistently aimed at having a steady growth supported by a quality-based rather than a quantity-based approach. Having said that, we are focussed on adding quality hotels offering quality experience to our guests. Our development efforts are equally divided in all the location categories, segments and hotel types, and are commensurate with the current trends and opportunities in the country. We are launching two new hotels under the “Aiden by Best Western” brand by the first quarter of 2023, and likewise we are planning to launch hotels with the other newer brands of Best Western Hotels & Resorts,” he shares.
The company, he reveals is also focussing on developing hotels in tier-2 and tier-3 locations in order to exploit the definite edge that the company has by the virtue of being a global operator in midscale and upper midscale space. In quantifiable numbers, the potential that Jain believes India to have is backed by Best Western’s vision to expand its current portfolio of 45 hotels to 60 in the next couple of years.
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