This cover story breaks with the norm and conducts a survey – what do your vendors really think about your hotel? Punam Mohandas and Sapna Kulshrestha run the gauntlet with some suppliers.
Talk about throwing the Christians into a den of lions. That’s roughly the kind of reaction we got when we approached suppliers with this month’s cover story theme. However, once they warmed up to the fact that we were not about to stir up a hornet’s nest, rather, this would actually smoothen relations between them and hoteliers, they gamely got down to answering the questions.
One of the first questions that came to mind is that almost everyone has slashed budgets due to the economic downturn.
Has this been at the cost of quality? On the contrary, eRevMax India, providers of online benchmarking and channel management for the hospitality industry, say that they have not only achieved targets during this period, but seen a positive growth. Says Uday Singh Solanki CTO and MD, India eRevMax: “The highest demand for our product has come from Mumbai, Delhi and Bengaluru due to the technology requirement in these cities.”
Shehzad Khan, proprietor, The Gold Leafing Studio, is of the opinion that in fact, the downturn has been a boost for better interiors among hotels, in order to get an edge over the competition. However, he does say that: “Although hotels are open to exploring newer products even at higher costs, due to budget constraints they sometimes do compromise on quality.”
Anil Malhotra, proprietor, Hospitality Sales & Marketing Company that specialises in hotel products such as connectivity hubs, room management systems, electronic locks and safes, sleep solutions, outdoor furniture and F&B products, agrees.
“All business verticals were impacted and hotels were no exception, however, the market seems bullish now for them. Hotels sometimes do compromise on quality due to budget constraints,” he says.
Neeraj Seth, managing director, Celsius Refrigeration Pvt. Ltd, begs to differ. “I don’t think the leading hotels have compromised on quality at all. The long-term players never do, although in their own way, every hotel tried to deal with this through a variety of cost cutting measures,” he says.
Umesh Tandon, sales manager, Everstyle Hotel Supplies Pvt Ltd, suppliers of imported tableware to luxury and mid segment hotels such as the Taj and Oberoi Groups, Hyatt Hotels, ITC WelcomGroup, Park Hotels, Westin and Accor, feels that large hotel chains like Taj and Oberoi are more aware of international standards and thus easier to work with, while independent hotels are harder to convince on the products due to their limited exposure.
Adds Tandon: “High-end properties do sometimes compromise on quality due to budget constraints; one of the reasons why the downturn in hospitality industry impacted us deeply but now, with the rise in economy, business is getting better.”
As is well known, India is seeing a boom in hospitality construction. There will be at least 40-international brands in the country by 2011. Since the vendors we spoke to are well versed with industry norms, we asked them where they think the future of Indian hospitality lies.
Khan says that budget and mid-segment hotels will see a major growth in their business in the next few years. Agrees Anil: “The highest growth will be in the budget and mid segment hotels, especially in NCR due to the upcoming Commonwealth Games.”
Rajeev Jain, director, Windorz India Pvt Ltd, providers of curtain wall and structural glazing systems, concurs that the budget and mid segment hotels will probably see the largest growth in India in near future.
Jegadeesh CEO, InterAsia India Pvt Ltd, distributors of Japanese tableware Noritake, also affirms that the future lies in budget and, to some extent, mid-segment hotels; “These will see major growth especially in Tier II cities as domestic travel continues to grow,” he says.
Says Jagdeep Malhotra, national sales manager, Hospitality Vertical, Dorma India Pvt. Ltd: “We all are aware that India has a shortage of rooms across, however, due to the growing exposure by Indian travellers in terms of international travel and demanding value-for-money, as well as incentives offered by the government, we expect the majority of rooms should come in mid-market or budget hotels.”
We usually hear of the problems hoteliers face, either in terms of sustaining quality, meeting timelines, or else, after-sales support. Suppliers also face their own set of challenges, most notoriously, delayed payments, unprofessionalism, bureaucratic measures and suchlike.
What are some of the issues that these particular companies have experienced? Says Solanki: “Indian hotel companies are still maturing and that is one of the reasons they would rather wait and watch than buy a high-standard product.
This is also one of the challenges in working with them as they take too much time in making an assessment or postpone decisions, rather than probably trying a product and making a quick decision.
Also, as of now, Indian hotels, unlike international brands, do not depend too much on third party consultants to make their decisions and everything is decided by in-house teams/experts.”
Khan says that the major challenges they face is the coordination with different contractors as also delayed payments for the work, however, they have not really faced unprofessional behaviour from any hotel. Says Jagdeep: “One challenge working with some hotel groups is the lack of coordination between their design, construction, projects and procurement team, however, as a vendor partner, we have to ensure we work in synchronisation with them to ensure optimal results.”
According to Anil, professionalism is on the rise in the industry, with a growing number of seasoned professionals from the Taj/Oberoi/ITC present in every other hotel. “Most hotels are fair to deal with, but in some cases, delayed payment is a problem. Not to mention most of the time we do get squeezed to the last penny,” he says.
Says Jegadeesh: “One of the challenges while working with hotels is getting order confirmations, more so in case of hotel chains which have to follow various protocols and, due to bureaucratic decisions, get delayed. Getting timely payments has never been a problem (for us).”
Seth feels things in India can sometimes go wrong because of time and cost overruns experienced in hotel projects.
“Very often, site conditions and delays by other contractors can lead to project hold ups which are not necessarily attributable to oneself. It is situations like this that at times make some hotel professionals come under pressure and become too pushy,” he says.
Tandon says candidly that they have experienced unprofessional behavior from a few hotels to some extent, but the majority of clients have been a pleasure to work with.
“One of the challenges of working with hotels is the bureaucracy involved in taking decisions, which causes unnecessary delays. This is the reason we first approach the user, that is, executive chef or F&B department, and then go to the purchase department for speedy approvals,” he adds.
Everybody has loyalists and builds up a working relationship that is nurtured over time, a comfort level that is hard to break out of. Therefore, do hotels prefer to remain with known suppliers, or are they open to doing business with new vendors too? Solanki is of the opinion that hotels prefer to continue with their regular vendor more due to convenience, as it sometimes also becomes expensive to change vendors, especially for technology platforms.
“However, in our case we offer limited subscriptions of one year and thus, if a hotel wants to change the vendor, it can easily do so,” he says.
Jagdeep says that, while there are a few existing hotel chains who prefer to remain with known suppliers, almost all new hotels coming up are very much accessible to new vendors. Khan says that whether the hotel is open to new vendors or not depends on the project manager and his team, who decide the suppliers.
Anil feels that hotels are open to newer ideas, rather than vendors. “For us, repeat business is the best business; hotels too believe in working with regular vendors but are open to new ideas and branded products even at higher costs,” he says.
Adds Jegadeesh: “We have been working with Mahindra Hotels and Oberoi hotels for the past four-to-five years, along with many other luxury hotels. I feel hotels prefer to continue with the same vendor as the price and service are of main concern to them, for which they come to have a better understanding with their regular vendor.
Most hotels are also open to exploring newer products if they are cost-effective, especially in the case of mid segment hotels for which budget and costs are important.”
Tandon says that whether it’s an international chain or an Indian company, they both prefer quality product and an established brand, irrespective of the vendor. According to him hotels do prefer to continue business with known vendors but are open to exploring newer products as well. This includes international chains which are open to working with Indian vendors if they are offered international brands.
Says Seth: “On the one hand it is about quality and on the other, about dependable after sales service support. Hotels would prefer to stay with reliable vendors but would be open to change if a specific vendor offers a better value proposition. Obviously, the young hotel chains are more open; although even the more established chains give in to persistence from a sincere, quality oriented, new vendor.”
An oft raised question is whether international brands coming into the country will make a difference to the Indian hospitality market. Says Dhruv Bhatia, sales manager, Gourmet, Barry Callebaut India Pvt. Ltd: “Certainly; with more international brands coming in, the hospitality industry shall benefit, as customers are travelling the world and becoming more demanding in their requirements.”
Agrees Jagdeep: “International brands coming to India will bring in their own flavour, appeal, style, taste and atmosphere, to provide a newer feel and ambience to Indian and international travellers.” Seth qualifies it by saying that the presence of international brands will have two positive implications in the Indian market.
“One, the smaller chains and standalone hotels would now be exposed to better quality standards and the quality benchmarks would consequently go up. Secondly, most international chains are beefing up their service and spares infrastructure in India, which augurs well for the Indian hospitality Industry,” he adds.
Obviously, with different work ethos and mindsets, there will be a diverse business style with international chains as compared to Indian companies. Anil thinks that multinational hotel chains are enhancing standards for Indian hotels.
eRevMax, who count the Oberoi Hotels & Resorts, Pride Hotels and Royal Orchid Hotels among their clients, have worked with both multinational chains as well as Indian hospitality companies. Says Solanki: “The major difference we find is that multinational hotels are more aware of technology and have already explored various options, while Indian companies are a little reluctant to adopt newer technology and would rather wait to take decisions.”
Says Bhatia: “I would say the style of working for leading Indian hotel chains and international chains is becoming very similar, as they want high quality products at value-for-money prices. Going forward, any differences which exist may reduce even further.”
Jagdeep says that international hotel chains would like to work with their own standards and values, as per their international appeal.
Khan, whose interior design company supplies gilding work in gold, silver and other materials, for hotels such as Taj Hotels Resorts and Palaces, ITC WelcomGroup, Hyatt Hotels, Novotel Hotels and Oberoi Hotels and Resorts for the past 10-15 years, says that working with each one, be it multinational chain, independent hotel or an upcoming brand, all has its own advantage.
“We have learned with each project and there are no disadvantages of working with any. Our best working experience though, has been with the Taj Hotels,” he says.
Which brings us squarely to our next question – these are all leading vendors in their respective fields, with top-notch clients, however, which are their favourite hotels to work with? Tandon says for him it is the Taj and Oberoi Groups because of their level of professionalism.
Says Solanki: “eRevNax India has been the vendor for revenue and distribution management tools to Oberoi hotels for almost four years now, which, incidentally along with Pride Hotels, are our favourite clients. This is due to the level of mutual understanding that has developed, making business a pleasure.”
Says Jain: “We have had the best working experience with Hotel Jaypee Palace Agra because of their very professional, committed and excellent project coordination, as well as Oberoi Wildflower Hall Shimla as they are very quality conscious, provide an excellent working environment and have good commitment towards vendors.”
Seth says they work equally with established hotel chains such as ITC WelcomGroup, Taj Hotels, Sarovar Park Hotels, Claridges and the like, as they do with standalone hotels, and are comfortable dealing with both.
Indian manufacturers are constantly accused of neglecting quality over quantity and thus, many Indian hotels too prefer sourcing their equipment from foreign companies. Do international hotel chains prefer working with suppliers from their home country in spite of the high cost incurred, simply due to this poor opinion of Indian products/ services, or are they open to exploring Indian vendors?
Solanki answers this one by saying he feels any hotel, be it an Indian or international brand, bases its buying decisions primarily on product quality and its customisation for their benefit, irrespective of the vendor being an Indian company or one based in the home country of an international hotel.
Jain agrees with this assessment; he says the vendor is decided by the quality of product and service and not where they are based. Khan feels that international hotel chains too need Indian vendors to give a local flavour to the property. Bhatia says that in his opinion, they are open to vendors; it is up to the vendors to demonstrate their price-quality equation.
Says Jagdeep: “Most international hotel chains are open to work with Indian vendors or vendors representing international brands. However, for some critical components and aesthetic design some hotel groups rely on their international suppliers. Some hotels especially are open to explore newer products at higher costs, if they are at par with international standards and mean innovation in design.”
Seth sums it up by saying that international companies do come with an established mindset, however, in his experience, they are open to evaluating new vendors on their merit and on a case-to-case basis.
Going forward, which hotels would they want to do business with? Says Solanki: “We look forward to working with Taj Hotels, Resorts and Palaces; Park Hotels; ITC-Welcomgroup and Fortune Park Hotels, as it would be a challenge working with such large chains and definitely good for the company business.”
Anil says The Four Seasons, Ritz Carlton, Shangri-La, Regent, Waldorf Astoria and Conrad are some of the hotels his company would like to work with, as they are the names to be reckoned with.
Jegadeesh says for him it is the Hilton and Marriott Hotels, among others, while Jain looks forward to working with Taj Hotels, Resorts and Palaces in future. Jagdeep says Dorma looks to working with the W, St Regis, Conrad, Mandarin Oriental and Ritz Carlton as and when they come to India. Tandon says it would be The Leela for him, which has its own class and thus would be a challenge to work with.
