Hospitality gearing up for steep climb ahead-II

By: Manu Sharma

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The emergence of the secondary and tertiary cities led to an aggressive increase in hotel development and provided avenues for expansion of hotel brands, which were previously dependent on new opportunities in just the five main cities. Another trend that has now emerged in the various major markets is the growth of micro-markets, especially in the primary cities. As travellers in large cities are increasingly measured in amount of travel time rather than distance, people are choosing to stay at hotels that are located closer to their place of work, thereby saving crucial travel time that might otherwise have been wasted in traffic.

Thus, while it might have been feasible previously to build only one Holiday Inn or one Marriott in the city, the presence of independent micro-markets now allows the existence of multiple hotels with the same brand affiliation without fears of cannibalization of demand.

The marketing of Brand India and ease of attaining Indian visas, added with the development of India’s image as a safe, secure and friendly destination brought niche tourism like medical tourism, religious circuits, adventure tourism etc. and the hotel industry continues to thrive on it.

Hospitality in India is no more dominated by the domestic players like Taj Group of Hotels, Oberoi Hotels & Resorts, ITC Hotels, and the government owned ITDC (India Tourism Development Corporation Ltd) Hotels, with only a handful of international brands having a token presence in the form of marketing alliances in India. Some of today’s home-grown hotel chains like Leela, Bharat Hotels, Sarovar and Asian Hotels are no more single-asset owners.

Most leading hotel brands such as Starwood, Hilton, Marriott, Hyatt and Accor already have a growing presence in India and they have an even stronger pipeline. Additionally, the emergence of a branded budget and economy segment presents tremendous opportunities and will attract many new players to the Indian hospitality going forward.

As Indians also travel more frequently around the world, they experience international hotel brands first-hand. Thus, these brands now enjoy greater recognition and acceptance in India. Additionally, as international visit to India increased, the foreign brands are better placed to attract these visitors due to their strong reservations networks around the world.

……to be continued