Over the last couple of years, the Indian hospitality industry has witnessed a slump when it comes to any significant increase in RevPars. The occupancies have gone up but with a little or no movement in the ARRs.
Speaking about the trend Manav Thadani, Chairman, hotelivate said, “The market turned 18 to 24 months ago. The occupancies have been improving over the last couple of years, but there has been hardly any rate movement. But, there has been some level of rate movement in the last six to eight months; therefore RevPars have grown by 8-12 per cent. In the previous cycles when the occupancies cross a threshold like say 70 per cent, the rates would go up by double digits. That is no longer happening. Potentially, as per my opinion, it is not happening as a lot of unorganised brands have now become organised and also a lot of discounting has been taking place by the OTAs. This is kind of holding the industry back.”
The overall supply in India has slowed down when compared to supply 7-8 years ago. But, this slowdown has only been witnessed in the branded space. “The supply has slowed down; it has gone down in the branded segment space. The branded hotel space is only about five per cent of the total accommodation segment. This is very small number, but the trend is the same. Today, there is less supply coming compared to a few years back” he further said.
Hotelivate, with over a year of operation now, has witnessed a 25 per cent up in their overall growth. The group is also now looking to open a office in Jakarta.
“We have had a very nice first year of operations. We closed with 25 per cent higher topline growth. We closed in the month of March and had the highest collection in between HVS and Hotelivate. We are getting good response. We are also a getting a lot more feasibilities, asset management and revenue management related work. We have an office in Singapore and we are planning to open one in Jakarta. We are more focusing on one or two countries rather than entire Asia Pacific. When we started the company, my focus was in some of these larger cities in Asia, but now that focus is changing and rather I will look at couple of smaller countries, grow there and increase our market share. In North America, we have a strategic alliance with LWHA,” Thadani informed.
Recently the group organised its flagship event HICSA in Mumbai which witnessed a great response. This year, Hotelivate is set to organise its THINC Innovate conference in Singapore which was previously held in Bangkok.
“We continue to do the THINC Conference; we are doing the THINC Indonesia which happens every September. We do THINC Sri Lanka every two years. We also do THINC Innovate which we did in Bangkok and next we will do it in Singapore this year. In Singapore there are a lot more technology based company and THINC Innovate should work better there. We are changing the format,” he informed.
The Industry has witnessed a lot of consolidations over the last couple of years. Major chains are now consolidating its brands and also a lot of rebranding has happened. “Consolidations is the way forward. Samhi did a few consolidations by acquiring the Premier Inn and some Accor portfolio. Now with Brookfield taking over Leela, I think there is consolidation taking place in ownership of hotels. Brand consolidation we have seen in the past and that will also continue to happen. Interestingly, there is a lot more foreign capital that is coming into the hotel sector in India. Whether its Brookfield or investments into Samhi or Lemon Tree, this will increase.”
