Home >Industry >Advertising >Heritage hotels shift focus to corporates

Indian heritage hotels, which predominantly depend on foreign tourists, are increasingly shifting their focus towards corporates, tapping demand for meeting and conference facilities in exotic locations. This comes as a slowing global economy has crimped foreign tourist arrivals in the country.

Between January and August, the pace of growth in foreign tourist arrivals has slowed four percentage points to 6.2% from a year earlier. Industry experts say heritage hotels have seen a drop of 5-10% in foreign guests in the past few months. Even the depreciation in the Indian currency against the dollar and some other major currencies has failed to boost occupancy levels.

“With dwindling foreign tourist arrivals, the statistics are changing wherein the share of foreign tourists is declining and on the other side, domestic and MICE (meetings, incentives, conferences, and exhibitions) segment is increasing," said Sunil Sikka, head of marketing and business development at WelcomHeritage Hotels, a collection of heritage hotels in India. “We see the tremendous potential in domestic and MICE domain."

Industry veterans say the dependence on domestic business travellers has become prominent with revenue share ratio of foreigners to locals at 65:35 now from 90:10 a couple of years ago.

“You can’t wait for foreign tourists to come. It is seasonal. There is a huge gap in between. Over a period of time, we have been looking at new revenue areas such as conferences and conventions," said Shriji Arvind Singh Mewar, chairman of HRH Group of Hotels. “The corporates have been interested in coming to us as we are providing facilities needed for conferences like video calling, Internet broadband connections and wi-fi at a very reasonable pricing and also because five-star hotel prices are now getting out of hand."

Many standalone heritage hotels with smaller banqueting facilities have also entered the segment to capitalize on this emerging opportunity.

“We have a small banquet hall, which can accommodate 40-50 people. So, we are looking at doing strategic meets and specialized conferences," said Vinit Chhabra, general manager, Ranbanka Palace, Jodhpur.

The heritage hotels charge 6,000-9,000 per room for two people compared with 15,000-20,000 at a five-star hotels.

“We rent our halls for 20,000-30,000 or we have a package for 9,000 per two persons," said Chhabra. “So if we do a day or two days conference, we earn revenue between 50,000 and a lakh."

Hospitality analysts say it is a sound strategy for heritage properties but limitations, including inadequate room capacity and accessibility, may make it difficult for these hotels to tap the opportunity, said Sudhir Andrews, dean academics, Ecole Hoteliere, Lavasa.

Laurent and Benon, which entered the hospitality segment a few months back and acquired the management of two heritage properties has also changed its focus in line with prevailing market conditions. In the past six months, Laurent and Benon has organized as many as 30 meetings and conferences in its properties in Jaisalmer and Alsisar.

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