With the hospitality segment booming in the country, one cannot overlook the ever evolving Delhi-NCR region. Today, this region has clearly stood out as an important business hub. To further cater to this demand many new hotel chains are investing in this part of the country. But despite these developments, hotels in this region feel that there is a slowdown in growth in the region. Also the region has witnessed a dip in the leisure side of the business.
Speaking about the current scenario, Kanika Hasrat, General Manager, Courtyard by Marriott, Gurgaon said, “Gurgaon being a business city sees strong business transient demand. But, the leisure business for the city has seen some crunch due to business shift to hotels in Aerocity area. This segment contributes between nine to ten per cent of overall revenue. We are anticipating one to two per cent growth,” she said adding that 2015 saw a marginal growth in occupancy across the board however ADR was still under pressure from inadequate and inconsistent demand. “We saw two to three per cent growth in occupancy with no growth in ARR and Revpar. 2015 was still a volatile year for demand and we saw no supply in the city. 2016 has projected as a comeback year for demand in this region and we all are yet to see the surge in demand in this market,” Hasrat opined.
Echoing Hasrat’s opinion, Sanzeev Bhatia, General Manager, The Metropolitan Hotel & Spa added, “Due to dis-balance of demand and supply the situation for hotel industry is not good. Hotels are neither doing the expected/budgeted occupancy nor able to achieve the targeted room rates. We have around 35:65 ratio in term of leisure business at our hotel as being in the down town area most of the business is from corporates. Leisure segment has not grown with the speed it was expected particularly after the introduction of Visa on Arrival facility for tourists of many countries.”
General Manager of Radisson Blu, Paschim Vihar, Arun Arora said that leisure is not one of their focused segments. While the FIT leisure is consistent, leisure Groups has not shown any significant increase in the ADR’s.
Whilst the Delhi-NCR is witnessing a slow growth, hotels are now looking at alternatives to fill up the rooms and keep their business rolling. Speaking about the strategies to beat this situation, Arora said, “Value additions in the MICE packaging to tap the volumes and penetration in the Medical Tourism segment will be our major focus in 2016.”
Hasrat explains that the inflow as a majority room supply has come in Aerocity region, which is getting its share of both business and leisure business shift from Delhi and Gurgaon. She said, “Majority of international leisure demand has shifted to Aerocity but the business transient demand for Gurgaon has been strong. SME is a growth segment which should provide a substantial base for Gurgaon hotels. We are working towards capturing the demand from this segment through multiple channels.”
Another major development is the emergence of the online aggregators. Bhatia claims, “Share of online business is increasing day by day and we are also doing great business from this segment.”Arora says that both online and offline bookings are still significant and important for their occupancies. “Online is steadily increasing while offline contributes in the B2B sourcing. In our scenario they are running parallel”, he further stated, “However the B2B space is quite important for us, till online aggregators further consolidate and replace it completely.”
Voicing a neutral opinion Hasrat said that they see online segment and travel portals as partners and allies not as competitors. She said, “More these aggregators take over traditional offline hotel bookings, the more consolidation of so called traditional offline hotel bookings will happen which will only be beneficial to chain hotels. It’s a huge segment and the traveller community is growing. The new age travellers are more tech savvy and we can see them patronising online channels for their travel.”
Despite these challenges hotels are now gearing up and are expecting positive growth in 2016. Even the domestic growth is now picking up in certain regions. Hasrat said, “Domestic market is very robust and is fuelling the growth in the Indian Economy. Its contribution has increased from 30 per cent – 40 per cent few years back to current 60 per cent-70 per cent plus overall and growing.”
Arora added, “With the increasing inventory of rooms the market is growing at a steady pace. While MICE holds lot of potential, Sports and Medical Tourism is emerging as a big contributor.”
Various reports furnished by STR and HVS have indicated a steady increase in 2016 over 2015. Bhatia says that like everybody else in the Industry they also expect 2016 a good year even though the challenges are there and the market is going very slow but he still feels it will pick up.
