With strong discussions which are synonymous with Hotel Investment Conference – South Asia, its 13th edition garnered greater industry interest, particularly from domestic players in the times of major industry developments
The 13th Hotel Investment Conference – South Asia (HICSA) 2017 held at Grand Hyatt Mumbai from April 5-6, witnessed detailed industry insights amidst the recent major developments concerning the hospitality sector. This year’s edition saw around 10 per cent increase in registrations and a record footfall of property owners, specifically from the Tier II markets such as Indore, Agartala among others. Domestic participation (84 per cent) outshined international participation of 16 per cent this year. However, Singapore, which is one of the important hubs in Asia Pacific’s hospitality industry, contributed to 23 per cent of international participation.
The numerous programmes at HICSA 2017 deliberated on diverse topics in the current industry scenario, with multiple perspectives. Sharing a recap of the last 20 years of the hospitality industry in India, the two-day event kicked off with a keynote address by Manav Thadani, chairman – Asia Pacific, HVS (the organising company for HICSA). Titled, ‘Manav Thadani – Uncensored’, the session highlighted the various changes in the industry through a timline-format presentation. Thadani commented, “A third of the world’s population has online presence, which is the single biggest change in the last 20 years.” Another challenge pointed out was energy consumption and costs. Thadani also introduced HVS’ SaaS based platform which provides an outsourced energy analytics solution that enables hotel owners and operators to identify and reduce the variable components of utility spend. Although the product is currently largely sold in the US market, Thadani indicated that the company can now speak to big brands outside the US.
Day 1 of the two-day knowledge intense platform also hosted various panel discussions, which saw leading industry professionals coming together to discuss the challenges and pave way for sustainable business. The first panel discussion of the day, ‘What makes India tick?’, moderated by Dilip Puri, MD – India and regional VP, South Asia, Starwood Hotels & Resorts (now Marriott International), focused on India-specific points such as the latest liquor ban order, skills, and online travel businesses. The panel was participated by Deep Kalra, chairman and group CEO, MakeMyTrip; Arun Nanda, chairman, Mahindra Holidays and Resorts India; and Peter Kerkar, group CEO, Cox & Kings. Kalra, while commenting on the liquor ban order, said that if the government had focused on tourism, this move wouldn’t have been taken. However, it is to be noted that the move was a Supreme Court order. Whereas Nanda pointed out at insufficient developments in the skills segment. He said, “We must not just critise, but also take initiatives on skill development. There is a need to skill people and a lot more has to be done, and the hospitality industry is equally responsible to contribute.”
The subsequent session, ‘Travel & tourism in South Asia: A global view’, was addressed by David Scowsill, president and CEO, World Travel and Tourism Council (WTTC). Scowsill opined that India’s travel and tourism market is in a good shape globally, and the government needs to prioritise the maximum growth of this industry. “We must work with the government to development the sector in India. One out of 11 jobs in India is supported by this sector and over the next 10 years, the country will need additional nine million people,” he said while lauding the government’s efforts such as e-Visa, regional connectivity scheme, Incredible India and more.
Other sessions on the first day included ‘The global CEO panel’ and ‘Owner powerhouses’. Ajit B Kerkar, chairman, V Hotels was recognised with ‘HICSA Lifetime Achievement Award 2017’. The evening also witnessed various hotels bagging accolades across categories at ‘HICSA Hotels of the Year Awards 2017’ and ‘HICSA Deal of the Year Award’.
On Day 2, the first panel discussion, ‘Institutional capital chasing hotels: Timing the entry and exits’, was moderated by Saurabh Gupta, MD, HVS Investment Advisory; the panelists were Gaurav Bhushan, global chief development officer, AccorHotels; Jonathan Vanica, MD, Asian Special Situations Group, Goldman Sachs; Saurabh Chawla, chief development officer, Louvre Hotels Group; and Vineet Sekhsaria, executive director, Morgan Stanley Real Estate Investing. AccorGroup is in the process of inviting institution capital to grow its real estate portfolio. “Our key focus now, even in India, is to build scale,” said Bhushan, adding that the market in hospitality is changing rapidly along with the customer’s buying patterns. Sekhsaria disclosed, “We are keen to invest in India but the prices are challenging.” Following this was a session titled, ‘Growing a company’, by Michael Issenberg, chairman and CEO – Asia Pacific, AccorHotels, who discussed the industry scenario in Asia Pacific and shared AccorHotels’ journey in the region and strategic plans.
Addressing the challenges of the hospitality industry in India, the panel discussion – Breaking the barrier called ‘India’ – saw Peter Henley, CEO, Onyx Hospitality Group; Navneet Bali, chairman, Meininger Hotels; Alan Watts, COO – AMEA, InterContinental Hotels Group; K B Kachru, chairman, Emeritus and principal advisor, South Asia, Carlson Rezidor Hotel Group; and moderator Uttam Dave, managing partner, Atmanya Projects identifying the barriers in this market and the way forward. However, the panel affirmed that there are less barriers now, compared to a decade ago; and there are only challenges which can be effectively dealt with. Bali commented, “India is not unique in terms of challenges; they are presence in other markets too. An important way to sustain in the India market is that companies have to be physically present in the country, through offices. You have to be in the market and execute plans. It is also important to find the right partner in the market.”
Sanjay Sethi, CEO and MD, Chalet Hotels/ K Raheja Corp, was the moderator for a high powered discussion ‘Why are we struggling with room rates?’ , which saw had imminent panel members like Ajay Bakaya, MD, Sarovar Hotels and Resorts; Peter Fulton, group president – EAME and SW Asia, Hyatt Hotels Corporation; Rajeev Menon, chief operating officer – Asia Pacific (excluding Greater China), Marriott International; Chinmai Sharma, chief revenue officer, Taj Hotels Palaces Resorts Safaris, Shantha De Silva, head – South West Asia, InterContinental Hotels Group and Ritesh Agarwal, founder and CEO, OYO Rooms. Menon acknowledged that in the last few years the leisure destinations have outperformed rates in city hotels, adding that there is an opportunity now to push the rates. “As an industry we need to take advantage of demand factor to drive rates,” mentioned De Silva. Unfortunately, considering that a lot of business is negotiated, hospitality companies are mostly not in a position to say no to big accounts. “We are in a difficult situation, there is no price point, your price point is what the customer is willing to pay you,” stated Bakaya. For OYO rooms 99 per cent of business comes from brand webite and app, and one per cent through travel agents, consequently, according to Agarwal pricing is controlled in all their hotels.
Numerous concurrent sessions were also held in addition to panel discussions on Day 2. The session on ‘The Business of Leisure & Wellness’ was moderated by Mansi Bhatnagar, MD – India, HVS Marketing Communications and MD, Templatolio, while the panel members were Bob Puccini, president and CEO, Puccini Group; Kunal Lalani, group MD, GroupMega; Ritesh Reddy Mastipuram, founder and MD, O2 Spa and Siddharth Shetty, director, Escenza Wellness. Skill shortage is one of the challenges in the industry. Lalani remarked that if wellness has to move forward it has to be looked upon as a separate revenue model, not just an add on in overall hotel package. Other sessions held alongside included ‘Mid segment brand value proposition’, ‘3 Rs of a hotel: How to Renovate, Rejuvenate and Reposition a hotel?’, ‘The return of franchising’, ‘Build or buy: How and where?’, ‘The great Indian hotel debt’ and more. Speaking at the session on hotel debts, Nitin Arora, senior vice president – CCG, Axis Bank, shared that banks generally prefer to lend loans to mid segment properties in Tier II markets. Whereas, the panel discussion, ‘The future of hotel real estate’, shedded light on the real estate scenario in the hotel industry.
The two-day event ended with an insightful discussion on the luxury segment in the country. Moderated by Kapil Chopra, president, The Oberoi Group, the session saw participation by renowned industry leaders such as Dipak Haksar, CEO – hotels division, ITC; Shafi Syed, chief development officer, Jumierah Group; and Rajiv Kaul, president, The Leela Palaces, Hotels and Resorts among others. The panelists shared their respective company’s focus and insights. Haksar stated, “When we came in the market, we realised that we can either grow in numbers or have sharp focus. Over the years, we have expanded and augmented capacities. ITC’s initial objective was business market, but now we are focusing on leisure segment.” Responding to a question, Syed shared that Jumeirah Group is open to foray into the India market. “It makes sense for us to come to India. We are open to both, ownership model or management contracts. In Dubai this year, we will focus on micro locations.”
(With inputs from Sudipta Dev)