The 8th annual Hotel Investment Forum India (HIFI) conference held in Mumbai recently saw industry leaders deliberate and discuss the critical issues that are having far reaching impact on hotel investments in the country By Sudipta Dev & Mohit Rathod
As Mumbai played host to the Hotel Investment Forum India (HIFI) conference after a gap of a few years, the fact that the state government and the tourism department are trying their assiduous best to make the city the events capital of the country was reiterated by Valsa Nair Singh, principal secretary, tourism and cultural affairs, Government of Maharashtra. In his opening remarks, James E Burba, president, BHN spoke about the optimism in the India market. “This market is at an early stage of upturn in terms of hotel investment,” he stated. Giving his outlook on the Indian hotel industry, Vijay Thacker, MD, Horwath HTL – India pointed out that demonetisation will have long term benefits though there will be reduction in discretionary spending. “For hotels, the wedding months and F&B business will take a hit. The Big Fat Indian Wedding will take some time to come back. Healthy room rate will take sometime to grow till occupancy stabilises in different markets,” said Thacker, adding that demonetisation should be looked at as a big detox, in the long run it will be positive and a good time to invest.
Demonetisation in fact dominated the panel on business and the Indian economy. Harshavardhan Neotia, president, FICCI and chairman, Ambuja Neotia Group, welcomed the move on behalf of FICCI, though he averred that the hospitality industry will be impacted, in particular impulse spending in restaurants and leisure travel. KVS Manian, president – corporate, institutional and investment banking, Kotak Mahindra Bank felt that there will be short term negative impact, however starting from the smaller segment to the organised sector, there will be restructuring of business.
The ‘Global outlook on travel & tourism’ saw David Scowsill, president & CEO, World Travel & Tourism Council (WTTC), talk about the unique WTTC India initiative. “Despite upheaval in global economy, travel and tourism has been resilient,” he remarked. Giving an overview of international hotel industry performance, Jesper Palmqvist, area director, APAC, STR, highlighted that India showed third highest RevPAR growth till YTD Sept 2016, in APAC. “What is driving the growth is supply (three per cent) and demand (eight per cent),” he mentioned.
There were two high powered ‘View from the boardroom’ panel discussions. The first moderated by Arun Saraf, MD, Juniper Hotels, included David Kong, president and CEO, Best Western Hotels & Resorts; Sonica Malhotra, MD, MBD Steigenberger Hotels & Resorts; Ravi Raheja, group president, K Raheja Corp; and Rakesh Sarna, MD & CEO, Taj Hotels Resorts & Palaces. Answering Saraf’s query about OTAs and alternate accommodation options like AirBnB, Sarna stated, “We have to remain focused on what we can offer. The only angst I have is that it is not a level playing field.” Raheja averred that while Indians are brand conscious, OTAs impact profitability, he however felt that the Marriott-Starwood merger will give more negotiable power going forward. Malhotra asserted that only the fittest will survive in the industry and the growth will depend on finances available. Moderated by Thacker, the second ‘View from the boardroom’ panel discussion that touch based on many interesting aspects, had on board Navneet Bali, chairman, Meininger Hotels; SP Jain, MD, Pride Hotels, Thorsten Kirschke, president, APAC, Carlson Rezidor Hotel Group and Suresh Kumar, MD, ITC Hotels. While Bali spoke about investors’ expectations, Kirschke highlighted that more efforts should be made by the operators to give right forecasting and advice to investors.
The two-day event was also utilised for attracting hospitality and tourism investments. Ras Al Khaimah’s Al Marjan Island presented to Indian hospitality players the various investment opportunities, through a session conducted by Abdullah Al Abdooli, managing director, Al Marjan Island. Another such session was headlined by Goa Tourism Development Corporation (GTDC), wherein Gavin Dias, deputy general manager of GTDC, revealed plans about three hotel projects across Goa and invited potential investors to consider investing in the projects. Dias commented, “We create a lot of synergies with our partners. Goa’s tourism potential is huge and tourism is a major driver of the state’s economy. Hospitality industry in Goa has flourished in the Goa due to the growing presence of MNCs.”
The significance of technology in the hospitality industry has been growing in the recent years; this was supported by the fact that technology was one of the major talkpoints of this year’s event. There were two discussions categorised under the banner, Technology Track. Themed, ‘OTAs and the explosion of online distribution channels’, one of the sessions saw Avijit Arya, chief mogul, Internet Moguls moderating a panel consisting Atul Jain, CEO, Best Western Hotels & Resorts; Abhishek Logani, VP and business head – online hotels, MakeMyTrip; Darshana Shirodkar, director – market management, Expedia Inc; and Amit Taneja chief revenue officer, Cleartrip. The panel reiterate its insights into changing dynamics of online distribution channels. Logani shared an interesting forecast that India is expected to have about 700 million internet users by 2017 and a huge part of this will be mobile-based, thus the year will be technology-driven from OTAs, consumers and hoteliers standpoint. Whereas, commenting on one of the topics based on co-ordination among hoteliers and OTAs, Taneja said, “OTA-hotelier relationship is often looked upon as a transactional one, but hoteliers need to look at us as a platform for their business development, where they can attract more guests.”
A session based on best practices for effective development of properties, shedded light on key factors to be considered in the planning and development of hotel projects. The session was moderated by Rushabh R Shah, associate director, Horwath HTL – India and the panel included Vijay Dewan, MD, The Park Hotels; Anika Gupta, director – development Eurasia, Wyndham Hotel Group; Rohit Hans, director of development, Hyatt Hotels and Resorts; and Kashyap Shah, GM, Unique Mercantile. Sharing his views, Shah said, “For us, development is a two-stage process – how you enter into the project and land analysis. We need to have professional setups for different aspects of development.”
Alongside, Amruda Nair, joint MD & CEO, Aiana Hotels & Resorts, was recognised with the Rising Star Award South Asia, created by ISHC in conjunction with HIFI. This was followed by a presentation by Chandrima Sinha, VP, Invest India, leveraging upon PM Modi’s various initiatives such as Make in India and Skill India. Sinha focused on the diverse investment opportunities available across the country.
The event concluded with seven brief discussions on ‘Boardroom challenges’, which included topics such as ‘How do you make money and maximise profits’, ‘How do you engage owners without having too much interference’, ‘How do brands and owners work in a partnership effectively’, among others.