FOREIGN HOTELS JACK UP STAR VALUE IN INDIA

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;}   Premier Inn, the UK’s largesthotel chain, is popular among international travelers as a budget hotel. But inIndia, where it will open its first hotel in Bangalore early nextmonth, Premier Inn is pitching itself as a value-for money mid-market brand.   “In India we realized that theconsumers’ connotation of a budget hotel means something that might not offerquality. So we decided to term ourselves as value for money mid-market hotelbrand,” says Aly Shariff, managing director of Premier Inn, which plans tobuild 80 hotels across the country for an investment of 300 million pounds.    It’s not an exception, though. Asa rule, most international hotel chains are positioning themselves higher thantheir global equity in India ,thanks to the country’s peculiar business model for building andrunning hotels that just can’t survive here without restaurants andbanqueting facilities. For example, Park Inn, an international three-star hotelchain belonging to the US-based Carlson Hotels Worldwide, is branded asfour-star hotel in India .    “Mid-market hotels in the westerncountries do not have elaborate food and beverages options or room servicesince people tend to be select service hotels. But in India, food and beveragescontributes significantly to the overall hotel revenues and so mostinternational mid-market brands tend position themselves as 4 star,” says AjayBakaya, executive director of Sarovar Hotels & Resorts that runs Park Innand Park Plaza hotels in India under a franchisee agreement with Carlson.    In India, where the concept of‘select service hotels’ does not exist, food and beverages account for about onethird of a hotel’s overall revenues, according to industry estimates. Totalancillary services in a 5 star hotel, which also include renting of banquethalls, spas and night clubs, could constitute as much as 45% of a hotel’sbusiness here.    “ In India, hotels are food and beverages destinations and host weddings unlike the westerncountries,” says Rajiv Menon, area vice president (India, Pakistan, Malaysiaand Maldives) of Marriott International, a US based Hotel Company.    This has forced moderately pricedbrands like Courtyard by Marriott to offer elaborate in-house dining services,concept restaurants or banqueting services in India, while globally they haveelaborate dining options outside the hotels, he says.    Another aspect that’s makinghotels to upgrade their positioning is the high real estate costs, saysSiddharth Thaker, executive director of hotel consultant HVS India. Accordingto him, real estate costs in India at 35-40% of total project costs is double that of global average. “This leadsmost international hotel brands to position themselves higher than what theyare branded globally so that they can become profitable faster.” This trend,however, can confuse international travelers visiting India and Indianstraveling abroad. It can even lead to cannibalization of brands, warns LarryMalarkar, an independent hotel consultant.    The former StarwoodHotels regional director expects stricter branding standards in the futureas most international hotel chains are now introducing multiple brands in thecountry. “If international hotel brands do not work towards uniform branding,it could lead to cannibalization of brands,” says Mr Malarkar.    Some hoteliers have started doingthat, by realigning hotel brands to position them as per global markets.    For instance, ITC Maurya Sheratonin Delhi was recently rebranded as ITC Maurya-The Luxury Collection as thehotel offered far more facilities than what brand Sheraton offers globally.This made Starwood Hotels and ITC Hotels to rebrand the hotel, an ITC spokeswomansaid.    Single-brand chains like PremierInn may not be too bothered about such confusion, but the Carlsons and Marriott’smay go the Starwood way as India steadily climbs to the top of the world.   Courtesy:- ET dt:- 23-10-2009 …………………………………..

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