2015: a better year for travel and hospitality industry

2015 has been comparatively a better year for India’s travel and hospitality industry. The year saw some improvement in business in terms of room occupancy.

In the current global economic scenario where many advanced as well as emerging economies are facing gloom, India is one of the few bright spots in the world with its high rate of growth. The year 2015 has been better than 2014 in terms of economic growth. 2015 has also been a good year for the travel and hospitality industry of the country.

“The tourism sector in 2014-15 held a prominent position in the Government’s proposed action plan. With the prime motive of making India a world-class travel destination, in the last one year, we could clearly see the visa system undergo a major revamp. The introduction of visa-on-arrival has been a proactive and productive step towards this development. Also, the increase in the number of foreign tourist arrivals by 8.1% in 2014-15 has been worthy of notice and the foreign exchange earnings through tourism also rose by 10%,” said Atul Lall – VP Operations & GM, The Claridges Hotels & Resorts, who lauded the Government’s efforts undertaken in 2014 and 2015 to promote tourism.

According to Vijay Wanchoo- Sr. Executive VP and GM, The Imperial New Delhi, the year 2015 has been good for the travel and tourism industry but last year was better due to lesser number of long weekends. Wanchoo said that leisure travel saw a slight dip but corporate travel increased. “For The Imperial 2015 has been better than 2014 and we have been ahead of the competition.”

As for the performance of his hotel in 2015, Lall said that it is only getting better with each year. The Claridges added newly renovated set of rooms overlooking the swimming pool to its inventory called the Cabana wing. “We also did a soft refurbishment of our Mediterranean restaurant Sevilla and very recently our iconic restaurant Dhaba was re-launched with a brand new look giving our guests all the more reason to stay and visit the Claridges, New Delhi, thus making 2015 a profitable year for us,” said Lall. The Claridges has also been in the news for the launch of Crayon Art Gallery; an art initiative at The Claridges seeks to capture the essence of a history of art and cultures with some of India’s most celebrated artists.

The leaders of the hospitality industry broadly agree that 2015 has been a better year as compared to 2014. “The country’s hospitality sector experienced a fair upturn in 2015. Though the ADR has not shown any major positive gains, the overall business has improved in terms of room occupancy across most of the destinations,” said Ajay Bakaya, Executive Director, Sarovar Hotels & Resort, who added that Sarovar Hotels has done much better as compared to 2014. “We have consolidated on our performance both on the ADR and occupancy front. Development has been our focus this year as well. We have added new properties in destinations like Vrindavan, Mashobara – Shimla, Thiruvananthapuram, Agra and Nairobi- Africa.

S N Srivastava, President, Clarks Inn Group of Hotels feels that India continues to be a silver lining in the current global economic environment. “First America, then Europe and now China is beginning to feel the heat of a financial slowdown. Aided by a weak oil price India’s GDP growth has climbed to 7.4 per cent in the quarter ending September, even beating market expectation,” said Srivastava, adding, “All this augur very well for the economy in 2016 and for the hotel industry. However the kind of turnaround that we had expected for the hotel industry in 2015 was partially met.” Clarks Inn Group of Hotels added seven new operational properties in 2015 and a bigger number in sign-ups. “Our current portfolio has expanded to 65 hotel properties, including 34 under operation, across 16 states in India and Nepal,” said Srivastava.

Regarding his expectation from the New Year, Lall said, “With all the upliftment and changes in 2015, we at The Claridges are only looking to enhance the experience of our guests while also making sure that the property becomes a destination pick for everyone coming into Delhi. We are very happy with how the hotel has done in terms of business and look forward to a better year.” According to Wanchoo , “Next year looks similar with no major events. Defense Expo has been shifted to Goa and Auto Expo has been scheduled to be at Greater Noida. So the season looks more or less the same.”

Many in the industry expect that the New Year will see more improvement in business. Ajay Bakaya believes that business sentiments will be positive in 2016. “We too are optimistic and we will be adding 10 more hotels to our product portfolio. Destinations being covered in 2016 include New Delhi, Amritsar, Bhavnagar, Dehradun, Jaisalmer, Jalandhar, Greater Noida, Raipur, Rishikesh, Vandalur – Chennai. While we are already perating three 3 hotels in Africa –New Africa Hotel in Dar-es-Salaam; The Heron Portico in Nairobi, and The Zehneria Portico, Nairobi, our 4th hotel in Africa the 134 key 5 star property at Jomo Kenyatta International Airport, Nairobi is scheduled to open in 2016,”

Wanchoo expressed concerns over frequent increases in taxes that negatively affects the hotel industry. “Increasing various taxes every six months is harmful for the hotel industry. Increasing luxury tax from 10% to 15% and then Service Tax increased from 5.12% a year ago to 8.70% ,the burden on the guests is increasing hence some guests do prefer to stay in Gurgaon due to the tax policy. Also with Defence Expo moving to Goa it will be a huge loss for the hotels in Delhi.”

Commenting on the government’s efforts to promote tourism, Lall said, “We feel that although there is always scope for further growth that can enhance our opportunities in the hospitality sector, the government has been actively trying to bring in new reforms and pump in the right kind of resources that can help take India’s travel and tourism industry to another level. India is already fast becoming a favourite amongst the global traveller and it’s only about time till we become the top tourist destination, worldwide. The government’s efforts here to improve logistics along with resourceful planning will hopefully help boost the paradigm of the Indian Tourism industry.”

According to Bakaya, “Government has huge task cut out for promoting tourism in the country. There is a vision which needs to be translated into specific executable plans. Domestic tourism has been the main stay this year and has been largely contributing to the overall performance of the tourism sector. Visa on arrival is one of the major initiatives taken by the Government and I am confident that this will have far reaching consequences for the benefit of tourism stake holders. Tax rationalization is one gray area that must be addressed immediately so as to make India a cost competitive destination when compared with other destinations in the sub-continent / South Asia. State tourism departments an equal stake holder too need to increase their support in promoting tourism sectors in the domestic market and encourage stakeholders to invest in developing tourism infrastructure.”

According to Rishi Puri, VP, Lords Hotels & Resorts, 2015 was definitely a much better year. “In the year 2014, new government took over and for the new government tourism was a priority. New initiatives like easier loans for Hotel industry, e-visas have been taken. Some results of these are visible on the ground where as we will see more impact of these measures in times to come. Consolidation of room aggregators which came in big way also helped cause of industry though some operators felt differently.”

Speaking about the performance of Lords Hotels in 2015, Puri said that 2015 has been much better year for Lords as compared to 2014 both in terms of volume and the rate of growth. “We not only consolidated our position but also grew over the past year. We established ourselves with e-booking channels and grew majorly on these by almost 40% and also we stand committed to launch our new look and feel website in early 2015 which will further boost our bookings from Brand Website. Lords added few properties –one in Nepal and the other in Jodhpur, Rajasthan. The chain also signed new hotels in other locations including a 120 rooms very up-market hotel at South Goa which will be commissioned by 2016 end of year.” On his expectation from the next year, Puri said that they have high hopes from 2016.”We have new properties coming up in Agra, Jammu, Goa and Jayanagar at Bengaluru which will significantly add to total number of properties under the Lords Hotels & Resorts umbrella,” said Puri.

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