How were the last 12 months for you? What have you learnt? What do you expect from next year? James Durston picks out some highlights in a brief annual review of 2009
This year started with the fraught recovery from the terrorist attacks of the year before, and additionally, had to contend with a travel slump and economic recession.
Considering all that, the relatively buoyant mood of hoteliers heading into 2010 is a welcome and refreshing turnaround. “Next year will be the year of accomplishment. We have been born, now we will walk,” says Heinz Egli, general manager at the Novotel Juhu.
However, that doesn’t negate the turbulent 12-months that comprised 2009. Occupancies took a massive hit this year and ARRs have followed them downwards.
The year started badly, with Rajindera Kumar, then the president of HRANI and now president of FHRAI, saying in the aftermath of the Mumbai terror attacks: “There have been so many cancellations already we now have no choice but to cut rates immediately.”
His correct prognosis will have offered little comfort to those most affected, especially in Mumbai and Delhi, where ARRs fell 42% and 31% respectively during the period January to June, according to the Hotels Price Index from hotels.com.
Further, despite an optimistic mood pervading the Hotel Investment Forum India in January, there were concerns that despite all the warnings, hotels were not doing enough to reassure guests of their security initiatives.
Irad Dale, managing director at HSMT Group, an Israeli security consultancy, came to India in February to perform secret audits of some major chains, and told Hotelier India: “You can have all the latest technology, but when you don’t have staff trained to use it, it’s of no use.”
The gloom lifted slightly later in the year though. Berggruen Hotels debuted with its first Keys hotel in Kerala; Radisson Hotels and Resorts announced plans to bring another 25 properties to India by 2012; while Best Western said it would open another 15 properties before year end. And Starwood started its impressive run in India with its relaunch of the Le Meridien brand.
But still, the challenge of a bear market remained. The relocation of the IPL to South Africa disappointed those looking for a tourism boost mid-year. And general sentiment continued to wax and wane, as bullish talk had to sit alongside the downward spiralling ARRs and RevPARs. By July, STR Global was showing RevPARs at around 60% of the year before.
And then swine flu arrived. F&B departments were particularly hit in Pune and Mumbai, while travellers also cancelled trips to Goa and the east as flu fever gripped the world.
Exactly how badly this affected occupancy rates is hard to say, as the industry, particularly in Goa, was already struggling with some of its lowest occupancies for many years.
“Swine flu has been more hyped than anything. This kind of negative propaganda would definitely impact the industry,” said a frustrated Shibil Mallik, marketing director at Ista, Hyderabad.
Nonetheless, for many it was business as usual. The 20th Ginger property opened in Jamshedpur. Premier Inn debuted with its first Indian hotel in Bangalore. Web giant Travelocity bought out Travelguru. And European chain Accor announced a US$130 million fund to build 50 hotels by 2012.
As the last quarter started, sentiment started to improve too. The tumbling room rates over the year have now made India an attractive option again. “Nothing can be more positive and optimistic,” says Egli. “A new life is ahead.”
The GM’s view
Vinit Chhabra, general manager, DeviGarh
The thrust this year was on conferences and domestic business, hence, we took out packages suiting the needs of our domestic guests which were highly appreciated.
The booking trends seem to have changed, with last minute bookings and guests either booking directly or asking for better prices with value additions.
The industry as a whole has seen a dip in tourist arrivals specially the inbound, which has led to a price correction and lots of value additions to woo the domestic guests.
I think overall this would lead to India becoming a viable destination, as the feelers from foreign travel agents was that India has become a very expensive destination, and hard-to-sell.
2009 has been an average year with our ARR down by almost 10%, RevPar by 13% while occupancies have been almost same till now. Next quarter is very important as this is when we expect maximum tourists, but it is not looking promising, with business on books not really what we were hoping for.
We are very optimistic for next year, with occupancies showing a positive trend and lots of queries already pouring in. We are also pinning a lot of hope on flow-over from the Common Wealth Games in 2010.
