City-based hotels had a great run from 2013 to 2019. Those in Mumbai posted an average 77% occupancy in 2019, according to STR, witnessing a steady 1% to 2% increase in full-year occupancy annually since the preceding five years.
However, these properties faced tough times after the pandemic struck, with occupancy dipping to 14.5% in April 2020. While these levels picked up gradually, the highest level was still 56.8% in February 2021. Following the second wave, it came down to 37.2% in April 2021.
Hotels in Mumbai were not alone in this calamitious condition – other city-based hotels, too, saw their occupancy and revenues fall drastically in the past 19 months.
CONSCIENTIOUS TRAVEL
Fortunately, the tide seems to be turning. Corporate India is back to travelling for work with 100% recovery across pharma, healthcare, real estate and biotech sectors on MakeMyTrip. The online booking platform noted a significant recovery in several sectors including manufacturing, defense and space, logistics as well as utilities with professionals returning to travel for business.
City-based hoteliers are seeing an uptick in corporate and group demand as more corporate professionals and entrepreneurs hit the road. On the even of the launch of ibis Mumbai Vikhroli, Anant Leekha, Cluster General Manager for this property and ibis Navi Mumbai is confident about a significant step-up in business travel as more workers return to the office.
Explaining his optimism, he said, “Post the second wave, ibis Navi Mumbai has been able to experience growth in corporate demand along with a few group business from companies in the vicinity. A corporate company, for instance, recently booked our meeting rooms for its employee training.”
While he admitted that core business travel is still limited, Leekha is enthused to see small organisations and individuals pick up the pace. And he is even happier to see them choose ibis hotels for its safe meeting options.
“We provided this clientele community with several facilities, including high-speed WiFi access, to meet their events demand, in addition to enhanced safety throughout the setup. Needless to say, safety and hygiene remain key determinants for people planning their corporate travel. However, offering personalised services and experiences will also have a key role for any hotel brand wanting to tap the re emerging corporate business,” he added.
LOCKING IN ON BUSINESS TRAVEL
With the easing of various restrictions, business travel is rebounding, albeit at a slow pace. At the same time, some noticeable changes are becoming evident in this sector. Entrepreneurs and professionals are travelling only when necessary for selective reasons. Currently, 50% of the travel bookings made on MakeMyTrip’s corporate travel offerings are for client meetings, followed by visit to vendors and distributors, and factories or manufacturing plants.
Even as companies return to hotel events spaces, there remains a growing demand for hybrid meetings and setups.
According to Leekha, this demand is expected to go up as more people get vaccinated and need to travel for business opportunities or to complete pending projects, which were put on hold due to the second wave. He noted, “Group business is still at a slower pace due to restrictions of using meeting spaces. Moreover, several companies want to maintain social distancing protocols for the safety of their employees. However, we are optimistic that the nationwide vaccination drive would drive growth in booking trends soon.”
RATE WAIT
It is well known that business travel was the most impacted business vertical for the hotel industry since last year. Leekha noted that most corporates are currently not looking at major rate contracting as their travel pattern depends on necessity. “At ibis, we value the contribution of our corporate clients and work very closely with them to cater to any specific demand, keeping our long-term relationship with them to the core of doing business,” he noted.
Even as companies return to hotel events spaces, there remains a growing demand for hybrid meetings and setups. “We must continue to re-think and re-imagine alternate revenue streams to meet the demands of the changing times,” Leekha suggested.
Since the group movement is restricted to 30 to 35 guests for most city-based business hotels, this calls
for some innovative out-of-the-box thinking. Most corporate customers expect a shorter hotel booking window, as the situation on ground can change quickly.
Moreover, while majority of this clientele had the luxury of an inhouse travel desk to manage their hotel and events booking, many are now doing it themselves or with a diminished support staff. This is a great opportunity for hoteliers to adopt unconventional approaches to meet the altered expectations of this traveller segment. In addition to offering the best pricing, they can extend flexibility in booking to help them control their expenses.
“In the last few months, the world around us changed rapidly. In the ‘new now’ hotel brands creating meaningful offers that meet the needs of guests will lead the way to recovery,” Leekha emphasised.
As these customers gear to get back on the road, flexibility to travel based on their comfort level will go a long way in boosting their confidence.
