With inflation hitting the roof, effects of post recession and no end in sight to licensing issues, problems of hoteliers are far from over. But what is it that is ailing the Indian hospitality industry at present? Hotelierindia.com in partnership with Hafele India invited some of the top GMs in Mumbai, to discuss everything vegetable prices and government policies to hiring agendas and social networking sites.
Are government regulations business-friendly?
Guy Godet: In today’s world when communication and the speed of travel is getting faster, India is not very competitive. It is sad to see that so much effort is needed to reach any little goal.
It would be good to see a strong group of motivated people or a lobbying body that could address this, because when you have bought a hotel, you have 50+licenses and if you can’t move a bottle of wine from one restaurant to another, it does get quite difficult at some point.
The hotel industry is only going to grown, so I think it would be a good idea for someone to report to a minister of trade or tourism maybe and ask them to look into our issues including VAT and if it is ever going to be nationalised.
How do you make this noise?
Guy Godet: I think that the FHRAI is a good body to do this, but the fact that this has been going on for a while shows that nothing has been done so far. There are lot of people involved in India to bring about such changes, but I am not sure where one should start.
If you look at the BBC every morning, India is on the top news every day, so from an outsider’s viewpoint one wouldn’t know such challenges really exist in a country as dynamic as this.
Ajoy Balkrishna: There is the media and publications like Hotelier India which could be a big help. The FHRAI is doing the best it can.
Kuldeep Bhartee: Apart from the FHRAI and the HAI there are various boards and associations for several hotels and restaurants and we see that even there, rules and regulations are often tedious and unacceptable, especially in other states.
Like the liquor licensing; in some places we take one license per state and its enough, whereas in other states one has to take a different license for every restaurant.
Anuraag Bhatnagar: All states have different rules. Like Rajasthan has the single window clearance scheme for all projects. So if you are opening a new project in Jaipur or Jaisalmer, a senior officer or bureaucrat would be assigned by the tourism ministry and would be empowered to see that all the rules and regulations are being levied.
So there has been some progress made. We also didn’t have problems such as the liquor licensing; these I think are very Mumbai-centric problems. Every state has a different set of rules and regulations that are monitored differently with different levels of execution.
This is one main reason why we don’t have a single unified voice to talk openly about our problems.
Is the FHRAI doing enough? Are they addressing all problems on a pan-India level and not at the state issue level?
Manish Sodhi: Currently, I think the FHRAI is looking at single-window clearance for all licenses for hotels. They are looking at making hospitality into infrastructure and once that happens all the taxations and licensing will disappear.
In India, the problem is that everything has its own course of time and the government decides what should be given importance. We try and lobby, but ultimately the government decides. So Mumbai is the only state that has excise laws – only Mumbai and Bangladesh in fact.
But then, this again is a big job market. If you remove this law, thousands of people will go out of work. Also, because hotels have big amounts of money, the government feels it is right to tax them.
If a hotel can spend `10 lakhs at an event, they can easily shell out `25,000 for taxes, is the logic. So, we all have our own way of handling these situations.
Harry Thaliwal: Jumping on the same bandwagon, I would say apart from financial and revenue concerns, there is the issue of inefficiency too. That’s not core business. We get so caught up in all these licensing issues that there isn’t enough time to look after our customers.
Guy Godet: It’s a cumbersome existence to start with. There is nothing wrong with paying taxes or license fees, but it is just about making it simple. Overall, it is a very cumbersome process. So, if it is about the licenses, the best solution is to just have one license and be done with it.
Manish Sodhi: Yes that is in the cards. You buy one license for one building and you don’t have to worry for a whole year. In India, things will happen but getting them to fall into place will take time. What about access to food and water? You all mentioned that as a problem. Guy Godet: Yes! Now again, you have water from borewells or simple borewells, or from the BMC or you buy it.
So, I am very concerned from the point of view of an operator, a citizen and a guest that resources are close to being exhausted at a place in the country, which has people who are very poor. The fact is that our hotel needs about 30-35 tankers of water daily, but there are days when we get only 15 to 20, so we really have to make use of whatever we get till the last drop. This should be the concern of the government and ours that the natural resources are very limited and if we exhaust them today it will be very difficult for us all later.
Kuldeep Bhartee: What we are doing as a community is more important than what the government is doing. It should be the hotelier’s choice how we choose to save. We on our part use recycled water in our hotel.
Harry Thaliwal: We try not to depend on tanker water; we try to recycle it. Else, what basically will happen is that the demand will be so high and will have to be divided among all the small businesses, that you would end up paying a bomb for it.
Manish Sodhi: If you see the newspapers, everybody is talking about going green. The hotels are doing their bit in the process. They have reduced the shower pressures and flush water is being recycled.
Anuraag Bhatnagar: It is also execution, not just marketing. It is as important to work on the going green parameters as maintaining occupancy and improving luxury levels for our guests. Very small and accurate targets have been created to see if these targets are being achieved.
Guy Godet: In India, there are places where people have to go miles for a bucket of water. So one has to be consciously careful about the whole scenario. In Mumbai, when it rains, buckets of water just go down the drain and back to the sea. What is being done about it?
Are Indian hotels overpriced?
Guy Godet: Whatever gain we made in the last six years was lost in the last two years. So, whatever rates we have today, are the exact same ones as what we had two years ago. Whatever rate one puts on the distribution channel is our decision. We may negotiate the price with a regular corporate customer, but whatever rate we put in is our own prerogative.
Manish Sodhi: The best way could be to have a constant rate across the board for all hotels at a particular time on a particular month. But that never happens, because there is always a new property coming up with special packages that causes everyone to slash their rates.
Juergen Wolf: As a customer who has travelled across the world and stayed at a number of hotels, I think Indian hotels are heavily overpriced. And I could see that the hotels were milking the cow before the recession and one wasn’t really getting any value for that money. So, the Indian hotel industry at large has got a very bad name, because of that internationally.
Guy Godet: There is always the equation of supply versus demand. The main reason for this is the dollar rate. Earlier the dollar rate was going strong. But now your money has shrunk. Your demand has shrunk. It will take another 2-3 years to come back to that level.
Ajoy Balkrishna: Also, land rates are so high and the fare one gets is low, so the rates go high because the builder is expecting that kind of returns. How else will they get their return when they invest that kind of money?
Manish Sodhi: Everybody wants value for their money, no matter where they may be. Now when a guest arrives in Mumbai, the whole experience from the airport to the hotel is disastrous.
From traffic jams to potholes, everything adds to that feeling. In the evenings there are very few properties where guests can just stroll out of the front gate. So till the government improves the quality of infrastructure in the city, guests coming here will feel that they’re getting less than they paid for. I rate Indian hotels as the best based on their maintenance, service, personalisation and infrastructure.
Anuraag Bhatnagar: I don’t think we are overpriced. In Brand India, hotels like ours provide services that are directly proportional to the services one can expect from a fine luxury hotel. It adds to the overall experience.
Apart from that, all our expenses have increased. Manpower has become expensive, costs have gone up and our margins have skidded. The degree of personalisation one gets is extremely high and the charges are according to that, as compared to Europe or the US.
Do security checks at hotels hamper your guest’s experience?
Guy Godet: There are a number of security checks and frisking. I talk to customers and 90% of them say ‘thank you’ for the security. About 10% do not like the fuss and checks around them.
Harry Thaliwal: Providing security is one of our major concerns. For most of our foreign clients even the international corporations seek extra security and its the first question they ask us – what security measures do we have?
Kuldeep Bhartee: There was a little bit of resentment about the fuss, but people understand the whole process now. Lots of technology is being used for the same.
Otherwise, it would be tough for hoteliers to maintain security. We have seen the price we had to pay the last time that happened. We need to be honest in our security implementation process.
Guy Godet: There is enough technology now. Also there are local and foreign agencies that will help you in that. We also work closely with various government agencies who help to train our security men and dogs.
Harry Thaliwal: This is very important because most of the people we hire are not well trained at identifying what is suspicious and what is not. They do not know how to react to a particular situation quickly. There are resources and we just need to make use of them.
Manish Sodhi: If you look at the US post 9/11, none of the hotels there have any security. It was at the airports, and other places. In India our borders are open, providing security isn’t our job, it is the government’s responsibility.
Anuraag Bhatnagar: After 26/11 guests don’t mind the fuss around security at all. Also the cross sharing of intelligence among different hotels is also a great thing that has happened.
As long as the security is not too subtle, obtrusive and is more in your face, it does give the guest an assurance that they are walking into a safe environment. We can’t use the excuse that because the borders aren’t secure we can’t do anything; the least we can do is secure ourselves.
How is social media affecting you?
Harry Thaliwal: It is very powerful for us. Most guests are very text friendly now and all forms of social media be it Facebook, Orkut or Twitter, are helpful. This has two sides to it – it is for marketing, but you should be very careful that your presence is felt there along with what content shows there.
People blog a lot these days, so it is astounding to see people leaving comments about their experiences in hotels online. You can’t control it, but it is better to be aware of what’s going on. It is a kind of direct feedback so being able to reach back is important.
Manish Sodhi: We actually have an electronic marketing cell that responds to the remarks and complaints if at all any and they are hired to respond back.
Guy Godet: I find it quite fascinating. Earlier we used to have the customer service survey form on paper, which guests would fill out and you would have your responses instantly.
But now you get comments online or the kinds, which I think are very loose and subjective. As a policy, we don’t reply to them, but try and learn from the comments and make those changes if we can. Because they’re talking to the world, once you respond you engage in the whole process.
Kuldeep Bhartee: One has to pay attention to it. You cannot ignore it. Today anybody can stand in your hotel lobby and send out a tweet which is enough to grab attention.
Anuraag Bhatnagar: Social networking isn’t a substitute for face-to-face communication, but it is a supplement.
What are the major manpower and HR issues you face?
Anuraag Bhatnagar: All the IT industries got together and decided that they would not poach each other’s employees. This I thought was the start of something great that we could follow.
We should make it a point to ask the new joinee to serve their notice period. Or perhaps even consult each other if the need arises. I see people job-hop so much, that they reach higher levels in just a year. This is something we should try to come to a loose conclusion on.
Harry Thaliwal: Serving notice is something I totally agree with. They should be asked to do that.
Manish Sodhi: When I was at the Leela’s all the F&B people used to have a monthly meeting where we used to go and discuss trends, policies and even new hiring and we would talk about it. The requirement of the person at the time is a deciding factor, because you make or break all promises and hire someone if the need is urgent.
Guy Godet: With the number of new properties coming up, the need for staff will always be there. Getting together to discuss such things is a good idea. What is not happening is that we don’t work closely with the schools.
Roundtable Highlights
- Indian Government must better infrastructure to support hotels
- Security is the responsibilty of the government and not of a hotel
- Licensing issues need to be addressed by the government
- Natural resources need to be used wisely
- All dealings, between the government and hotels, need to be simplified
OUR DISTINGUISHED PANEL
Kuldeep Bhartee
general manager, ITC Grand Central
Kuldeep Bhartee is a product of the IHM, Mumbai and the American hotel & Lodging Association – USA. He is also a member of the UK’s Institute of Hospitality. He joined ITC Grand Central, Mumbai as the general manager from ITC Mughal, Agra where he was deputed general manager in March 2009. Prior to this, he has worked at the ITC Sonar Bangla, Kolkata and ITC Kakatiya, Hyderabad, Chola Sheraton, Chennai and Sheraton Grande Sukhovit in Bangkok. Bhartee began his career with The Taj Mahal Palace & Towers in Mumbai, and then moved to the Taj City Hotel in Muscat, followed by The Taj Beach Resort in Oman.
Harry Thaliwal
general manager, Holiday Inn
Harry has over 22 years of experience in the hospitality industry with over 17 years in the IHG. Thaliwal has worked in nine countries across three continents. He joined Holiday Inn Mumbai from Holiday Inn resort Penang, where he worked as general manager.
Ajoy Balkrishna
general manager, Grand Sarovar Premiere
He is a 42-year-old commerce graduate from Mumbai University and a hotelier with 20 years of hospitality experience. He holds a diploma in Hotel Management. During his hospitality career he has been associated with The Oberoi group, The Regent, Hyatt International and InterContinental Hotels. He has been a part of the preopening team of four distinct properties in Mumbai and Goa.
Manish Sodhi
head of operations, Hotel Sahara Star
Sodhi graduated from the Johnson & Wales University, US in May 2000. He joined Hotel Sahara Star, Mumbai as the head of operations in March 2007. He has worked with the Leela Kempinski Mumbai, Westin Waltham Hotel US, Sheraton Braintree Hotel and the Marriott’s Harbor Beach Resort, Fort Lauderdale, Florida.
Anuraag Bhatnagar
general manager, Le Royal Meridien Mumbai
Anuraag Bhatnagar has 21 years of experience in the hospitality industry. Initially he was associated with The Oberoi Group for 11 years in different properties like The Oberoi Grand Calcutta , The Oberoi Bhubaneshwar and The Oberoi New Delhi. He has now been with Le Meridien for the last 10 years. Initially he joined as director F&B, Le Royal Meridien, Mumbai, after which he moved to open Le Meridien, Jaipur as general manager. He is on the Global General Manager’s Advisory Board by Starwood Hotels & Resorts as India and Asia Pacific representative. His role includes facilitating Le Meridien brand Initiatives in the region and also rolling out signature services and programmes in Mumbai.
GUY GODET
general manager
JW Marriott Mumbai
Godet has been with the Marriott Group since July 1990. Starting with his stint as resident manager Marriott Royal Garden Riverside, he was in-charge of overseeing every aspect of the pre-opening planning in the food and beverage department. Godet has also worked with the Shangri- La Group in Kuala Lumpur and Jakarta as resident manager.
In September 1999 Godet was appointed resident manager at the JW Marriott Hotel, Seoul. He then travelled to Busan Marriott Hotel as general manager and later to the Renaissance Bali Resort Villas and Spa.
Juergen Wolf
managing director
Häfele India
Wolf holds a degree in Export Management from Germany. He started his career with Thyssen Rheinstahl Technik, a German company providing turnkey solutions for manufacturing plants. His international career began in 1982 with his first foreign assignments as branch anager Iraq, based in Baghdad. Since then he has been instrumental in developing various new markets in Asia, the Middle East region, North-America and Europe for the companies he was associated with.
