Rajasthan, the state known for stunning palaces, for royalty and colourful local tribes, for deserts and cities coloured pink and blue and yellow, for the wilds of Ranthambore and the striking golden expanse of Jaisalmer, holds a pride of place on India’s tourism map. The state’s Minister of Tourism, Vishvendra Singh says that Rajasthan is aiming to attract 50 million tourists arrival by 2020. According to Director of Tourism, Pradeep Kumar Borar, the hotel industry has an occupancy rate of almost 70 per cent, while Palace on Wheels, the famous luxury heritage train, also registered 60 per cent occupancy last year.
Taj Rambagh Palace, Jaipur opened Sawai Man Mahal, a convention centre, to cater to the luxury MICE segment.
It was in 1989 that Rajasthan declared tourism to be a large potential job creator. Ever since, the northern state has leveraged the royal lifestyle of its erstwhile royal families, its artisanal and food heritage, sports such as polo, the ancient cities and equally antediluvian bazaars, to position itself on the travel map.
Ashok Rathore, GM, Taj Rambagh Palace, Jaipur.
Tourism, today, contributes almost 20% to Rajasthan’s economy and over 15% of foreign tourist arrivals in India head to Rajasthan annually. Ashok Rathore, General Manager, Taj Rambagh Palace, Jaipur, contends that the state offers a unique basket of experiences to inbound and domestic travellers, with its strong legacy of historical forts, palaces, art and culture, and its warm hospitality. “Every third foreign tourist visiting India travels to Rajasthan as it is part of the Golden Triangle. The state has five major markets —Jaipur, Udaipur, Jodhpur, Pushkar and Jaisalmer, along with micro-markets such as Bikaner, Nagaur, etc.”
Sarbendra Sarkar, Founder & Managing Director, Cygnett Hotels and Resorts
Within India, the state ranks No. 9 in terms of Domestic Tourist Arrivals (DTAs) and No. 3 for International Tourist Arrivals (ITAs). “Tourism accounts for eight per cent of the domestic product and the sector has grown by an average rate of 5-6% for the last three years,” he adds. The potential is huge. “One major reason for high footfall is Rajasthan’s ability to attract all segments of the tourism pyramid. The state government actively participates in myriad exhibitions and fairs in India and abroad,” says Sarbendra Sarkar, Founder & Managing Director, Cygnett Hotels and Resorts.
The beginnings
According to HVS Research, a decade before the state government accorded Rajasthan the label of an industry, Udaipur had put itself on the global tourism map. In 1979, the opening of the iconic Taj Lake Palace Hotel was considered a milestone in the hospitality industry’s journey in the state. The conversion of white-as-marble Jag Niwas Palace, bang in the middle of Lake Pichola, into an iconic hotel, and the idea of luxury hospitality amidst royal setting sparked a movement across Rajasthan, and more palaces, mansions, havelis and former hunting grounds were transformed into beautiful hotels. In Udaipur itself, Shiv Niwas and Fateh Prakash, part of the City Palace Complex, were converted into palatial hotels. Groups such as The Oberoi set new hospitality standards with hotels such as The Oberoi Udaivilas. Udaipur is recognised as a niche hotel market in India and Lemon Tree Hotels Limited chose to debut its upscale brand, Aurika, here.
Manav Thadani, Founder Chairman, Hotelivate.
“Over the last decade, there has been a spate of large hotel openings. The Fairmont and JW Marriott in Jaipur are classic examples,” says Manav Thadani, Founder Chairman, Hotelivate. “We have also seen the advent of international brands such as Hilton and Hyatt Regency in Jaipur. Hotelivate has been involved in at least half-a-dozen other hotels in both Jaipur and Udaipur, which are expected to enter the market in the next five years. While growth has happened in the mid-scale and budget space as well, it has been overshadowed by the luxury and upper-upscale space.” Rajasthan is streets ahead of other states on the tourism front because of several advantages: a strong brand perception in the overseas market, and its rich heritage, culture and living royalty, ticking all the right boxes on the wishlist of a traveller, says Rathore.
Hospitality: Leveraging the domestic tourism market
Almost every marquee hospitality brand has a presence in Rajasthan. Jaipur was perhaps the first city off the block—the pink city has hotels across the spectrum—from boutique to luxury, from budget to upscale and upper-upscale, including stunning palace hotels such as The Rambagh Palace, Jai Mahal Palace (both IHCL properties), ITC Rajputana, Hotel Narain Niwas Palace, haveli hotels such as Alsisar, besides a slew of five star properties such as Fairmont Jaipur. In the initial euphoric days when the Rajasthan market opened up, it wasn’t just inviting in luxury brands. Ramada Resort & Spa was amongst the first hotels to establish a mid-market segment in Udaipur. ibis, the Accor Group’s mid-scale brand, recently renovated the ibis Jaipur Civil Lines, with a revamped lobby that reflects the art and culture of Rajasthan with Pichwai paintings and handicrafts. The expansion and renewal are indicative of how robust the mid-scale segment is. Saumitra Chaturvedi, GM of ibis Jaipur Civil Lines, says, “In the last two years, the maximum development has been in the mid-scale and luxury/premium category. Besides Jaipur, cities such as Udaipur, Jodhpur, Pushkar, Bikaner and Jaisalmer have benefitted. For Accor, Raffles in Jaipur and Udaipur are two prestigious projects in the pipeline. In the state, there has been a sizeable addition in the inventory under the unstructured category of hotels, with local havelis converted into hotels.”
The entry of hotels with large inventories such as Fairmont, Marriott and The Lalit, with huge conference and banqueting space, has helped Jaipur attract those travelling for MICE and destination weddings. Jaipur has witnessed dynamic economic transformation; it is now home to several start-ups, including those in the luxury segment, besides the globally acclaimed Jaipur Literature Festival, bestowing an unmistakable buzz on it.
According to an HVS report, the hospitality supply chain in Rajasthan has grown at a CAGR of over 18% per cent. In the five-star segment, the supply has increased by almost 60 per cent in the last two years. Increasingly, the hospitality industry in Rajasthan has turned to the domestic market to make it through, somewhat diluting its dependence on international segments. Manav Thadani, Founder Chairman, Hotelivate, says, “Domestic tourism continues to grow as roads improve. Rajasthan’s proximity to Delhi as well as Gujarat, which by nature has a population that loves to travel, benefits from this immensely. A vast majority of travellers are leisure-oriented.
Hotels have begun evolving their offerings to appeal to the massive inflow of domestic tourists. “Our palace experiences are well designed to offer a high level of personalisation. To appeal to the family travellers, we have enhanced the experiences for children in the palace, more in the form of storytelling. We also curate experiences to bring alive the various festivals,” says Rathore. In Jodhpur, hotels such as Taj Umaid Bhawan Palace enjoy the benefits but also face drawbacks. While there is no competition within the city and the hotel sets the luxury benchmarks, extended competition comes from Jaipur and Udaipur. The challenge for IHCL lies in promoting Jodhpur as a destination and creating a network so that travellers can experience their palace hotels in three cities—Jaipur, Jodhpur and Udaipur. Shobha Mohan, Founder, Rare India, which markets superlative properties across the country, says that hotels need to adopt better pricing, activities and cuisines focused on the domestic market.
The evolution of new market segments
MICE tourism has stood Rajasthan in good stead. While earlier, 90% of the travel, particularly to Jaipur, was for tourism, now, with the addition in banquet spaces and convention centres, Indians are travelling to the state for destination weddings, conventions and corporate meetings. While in the 2000s, the inbound-to domestic traveller ratio was 80:20, today, it is 65:35 even in palace hotels. Rathore estimates that MICE contributes close to 40% of the revenue share, while leisure travel is close to 45%, which means that the former segment is fast catching up.
“Rajasthan market is amongst the fastest growing in the country for MICE on account of the new upperupscale projects and luxury hotels with huge convention space and high inventory, close to 200 rooms plus. The development of KUKAS region (Delhi-Jaipur highway) as a micro-market market has shown the huge potential of MICE in the city.” Taj Rambagh Palace, Jaipur recently opened an opulent convention space—Sawai Man Mahal, within its stately grounds, to cater to the luxury MICE segment. “We would be adding another 60 keys in the new project to offer sizeable inventory between Rambagh Palace and Sawai Man Mahal to high-end weddings or corporate incentives. Our proximity with our sister hotel, Jai Mahal Palace’s 100 keys gives us an edge in the destination weddings market and allows us to offer a variety of banquet venues to choose from,” contends Rathore. Chaturvedi credits the construction of the Jaipur Exhibition and Convention Centre (JECC), a spectacular destination for conventions, as the catalyst for attracting bigger MICE and convention events. “South Asia’s largest purpose-built and state-of-art convention facility offers international facilities infused with renowned Indian hospitality. JECC has been the venue for important city events such as GITB and EPICON.”
Amit Sachdeva, General Manager, JW Marriott Jaipur Resort & Spa
The state is also emerging as a ‘business-leisure’ or BLeisure destination. Amit Sachdeva, General Manager, JW Marriott Jaipur Resort & Spa, says, “The pleasure of indulging in its authentic and thematic atmosphere, even as you conduct business adds to the sense of thrill and adventure. At JW Marriott Jaipur Resort & Spa, 24% of our business comes from leisure travellers, while 76% from MICE and weddings.”
The destination wedding segment is quite buoyant in a state famous for its heritage—physical, cultural and culinary. Thadani points towards the opening of large hotels in Jaipur for its popularity as a wedding destination. “Rajasthan has been the preferred destination for several high-profile weddings,” points out Chaturvedi. “Liz Hurley and Arun Nayar, Katy Perry and Russell Brand, Raveena Tandon and Anil Thadani, Priyanka Chopra and Nick Jonas, and the Ambani pre-wedding events are few of the talked-about royal weddings.” Many luxury hotels such as Fairmont Jaipur have an advantage because of their superlative offerings.
Rajiv Kapoor, General Manager, Fairmont Jaipur
Rajiv Kapoor, General Manager, Fairmont Jaipur, says, “We have evolved to play host to the highly customisable wedding and event setups, one-stop-shop solutions for events and other such facilities to make the process of conducting an event as stress-free as possible for all parties involved.”
ADRs and room inventories
.jpg?kUIGWcfy)
Fairmont Jaipur
The ADRs in both the Jaipur market and other major macro markets have grown in the range of 3-5%. In FY 2018, Rajasthan’s upper-upscale/ luxury hotels enjoyed an ADR of INR 6027. “The scenario is competitive but it’s a healthy. As the state offers stays to meet the requirements of luxury and budget travellers, we haven’t had to compromise on ADRs,” claims Sachdeva. Thadani contends that hotels within the city limits often have to compromise on ADRs, “wedding-centric hotels, for example, in Kukas, Jaipur, are able to command 10-15% higher ADRs than other market segments”. Kapoor reveals that the MICE segment, much like the wedding segment, attracts higher ADRs. “Fairmont Jaipur showed an 11% growth in ADR.” While the inventory in the state has gone up by a mile (see box), Rajasthan continues to need more hotels. “The total number of nights comes to 1.82 crores and the number of tourists that visited was 5.18 crores. This shows a deficiency in the inventory,” says Chaturvedi.
The roadblocks
While Rajasthan continues to attract a lion share of foreign travellers, Himmat Anand, Founder, Tree of Life Resort & Spa has always contended that the number of international travellers hasn’t seen any discernible change. Neither has hotels with large inventories helped bring conferences and meetings into Jaipur. “Over-supply of rooms in Gurgaon and Delhi have led to rates crashing there and conference organisers have ignored Jaipur. Further, just building rooms will not get convention business—there is not a single convention centre of any standing in the city and the Birla Convention Centre is rather basic in its offering,” he has been quoted to have said.
There are a few reasons why Rajasthan, despite all its advantages, suffers reversals.
• Infrastructure: According to Anand, with very little transformation in tourism infrastructure or product offering, the city doesn’t attract repeat travellers. On the other hand, while Rathore doesn’t agree with the analysis of the road network (“Rajasthan has a great road network and is well-connected with the key cities in the country, and is backed by high-speed trains”), he does rue the lack of interstate flight connectivity, which proves to be a deterrent to the growth of luxury travel. “The key markets have very low connectivity and flight operations are seasonal. Connectivity with international carriers from key source markets such as the USA and Europe could prove to be a game-changer for the state. Currently, Jaipur does have some low-cost carriers from Middle East flying in directly, but it does not support the luxury travel segment from key source markets,” he adds. Chaturvedi maintains that while airports such as Udaipur, Jaisalmer and Jodhpur do not have great air connectivity by air, “under the UDAN scheme, these sectors are coming up well”. Sarkar contends that there is further scope to increase the tourism inflow by easing up the connectivity situation. “One big concern is the lack of public transportation, which impacts the movement of solo foreign travellers, as they tend to choose a destination based on the convenience of public commute. Furthermore, the state needs to improve upon its safety and security pitch to make everyone, including travellers, feel comfortable.”
Rajasthan offers an enviable blend of heritage and dining experiences to world travellers.
• Rajasthan’s other big challenges include factors such as the seasonal quality of tourism in the state, the lack of adequate brand building exercise in key markets, as well as the fact that states such as Madhya Pradesh, Kerala and Karnataka are fast catching on with their high-voltage marketing strategies and tourismfriendly policies,” states Rathore.
• As a state, it faces a perception challenge of summer months being extremely warm. Chaturvedi says, “Extremes of warm temperature between April and September brings down the travel in every category, be it corporate, leisure or MICE. The months from October to March is where the maximum travel occurs in the leisure category.” However, Rajasthan also suffers from the perception of being too hot. In Jodhpur, for instance, while two months in the year are torrentially hot and temperatures rise to about 48 degrees, in months such as April or July to September, the city is like any other in India. And by monsoons, it is lush green.
• Thadani also mentions the lack of ease of doing business. “The state remains a challenge when it comes to clearances of tourism/hospitality projects.” Mohan also mentions rampantconstruction of hotels, no regulation to curb hotel projects around sensitive areas and general upkeep of historically rich areas as some of the challenges. “It need sot look at issues such as authenticity, cleanliness, policies governing elephant rides in Amber, capacity building in terms of qualified guides and story tellers to ensure a more sustainable tourism policy.”
ibis Jaipur Civil Lines, a new opening, has added heft to the mid-market segment.
What the government can do
While the state government is known to extend massive support to thetourism sector, some major work needs to be done on infrastructure and policy fronts. “We would like to see independent marketing campaigns from the state tourism board in global trade fairs, an extensive PR and brand-building exercise, and more journalist familiarisation trips,” contends Rathore. It isn’t that the state government has not tried at all. The launch of a new media campaign ‘Jane Kya Dikh Jaye’ translated into an impressive increase in the tourist arrivals, says Sachdeva, bagging the state the prestigious ET Brand Equity Award. The other point of contention is tax benefits. The state has seen a rise in boutique heritage hotels, and Rathore believes more sops and tax benefits should be offered to start-ups. “We would like to have world-class infrastructure in major tourist sites to ensure a seamless experience. Also, support to airlines with low parking fees to ensure that the flights are operational in slack seasons,” he says. Rajasthan, with its right product mix and backed by its rich history will continue to attract travellers, particularly in the luxury segment.
Taj Lake Palace, Udaipur was the first palace hotel to open in Rajasthan and sparked a movement to convert more palaces, havelis and mansions into hotels.
“The strategic marketing efforts and adapting to digital campaigns by the state tourism department, the involvement of royal families in restoring and beautifying the cities, and the rich culture and history of the destination, will continue to keep Rajasthan at the top of India’s tourism map,” says Sachdeva. Addition of direct international flights from key source markets and enhanced intra-state air connectivity will help its tourism and hospitality industry grow rapidly. “A persistent effort at maintaining the balance between cultural heritage and modernity, and an environment that is safe and corruption- free will help Rajasthan stay on the top of India’s tourism map,” says Chaturvedi.
Some Interesting Facts
RAJASTHAN IN NUMBERS
- Tourism’s share in the state’s economy: 15%.
- Current hotel inventory in branded space: 9000 keys.
- Domestic tourist arrivals in FY 18: 4.6 crores, a growth of
- 10.7% over the previous year.
- International tourist arrivals in FY 18: 15 lakhs, an increase of 4% over the previous year.
- Air passenger traffic at Jaipur International Airport: International arrivals grew by 17% in 2017/18 and 15% in 2018/19. Domestic passenger traffic grew by 27% in 2017/18 and 15% in 2018/19.
- ADRs are very hotel and season-specific. The leading luxury segment could range anything between INR 40,000- 45,000, the premium hotel varies trades in the range of INR 10,000-18,000, mid-scale ranges between INR 5,000- 6,000, the economy hotels ranges around INR 2,500-INR 3,500.
- Infrastructure: 47 national highways with a total length of 9,998.80kms and a total of 85 state highways, covering a total length of 11,716kms.
- Total number of hotels in Rajasthan: 2150
- Total no of keys: 50,000 rooms.
- Total tourism budget of the state government in FY 17-18: INR 163.51 crores, of which INR 155.92 crores was spent on the preservation and restoration of heritage sites.
- Tourism budget was increased by 16% for FY2018-2019
INVESTING IN RAJASTHAN
The state government’s ‘Resurgent Rajasthan’ campaign recognises tourism and hospitality as two focused sectors for investment. Based on their forecasted growth, Rajasthan is likely to face a shortfall of approximately 36,000 hotel rooms by the year 2021. The state government recommends not just the creation of hotels, but also the development of adventure sports activities, golf courses and convention centres through Public-Private Partnership investment schemes. While the entire state is up for development, cities such as Udaipur are getting special attention with plans such as the establishment of a golf course, night-viewing of monuments to incorporate summer tourism, eco-tourism, as well as restoration of Jaisamand Lake.
Saumitra Chaturvedi, GM, ibis Jaipur Civil Lines
The Rajasthan Tourism Unit policy 2015 has undergone various amendments, ensuring that the tourism environment is far more supportive of the hospitality industry. Saumitra Chaturvedi, GM of ibis Jaipur Civil Lines reveals, “Newer investment in hotels, especially those from the heritage category, have been provided with special incentives under this policy, such as exemption on stamp duty to the extent of 25% for a property that is over a century old. Nearly 1500 tourism units were approved by the tourism department, involving an investment of approximately 12,264 crores during the last evaluated operating period, from 2007 to 2015. The state government has pro-actively supported the setting up of new hotels of well-known international brands.” Chaturvedi asserts that the state government needs to continue making efforts to introduce new initiatives. “Further FDI investments in the state will enhance industrialisation, strengthening the economy.”
RevPAR
“The hospitality market has witnessed marked improvement year-on-year in performance, especially in major cities such as Jaipur and Udaipur, where the former displayed a growth of 5.4% in RevPAR, while Udaipur witnessed a 15.7% in RevPAR in 2018/19,” says Manav Thadani, Founder Chairman, Hotelivate. The following table showcases hotel performance by positioning for branded hotels across Rajasthan over the last three years.
