S.P. Jain, Managing Director, Pride Group of Hotels, in an exclusive interaction with Hospitality Talk, discloses group’s plans and challenges that still hamper industry’s growth!
How has this year been for the group?
It has been a good year of Pride Group of Hotels. We have increased total 20 hotels on Pan India basis. We have added new property at Rajkot, Gangtok, Anand, Jabalpur, Bhavnagar and Bharatpur under management basis. We focused on upscale and mid segment market and more to tier two and tier three cities. As each market matures we scaled up the facilities and infrastructure in these hotels to move up the ladder which helps us get better average rates and more market share. Along with mid segment we also focus on corporate clients and leisure holiday seekers.
We have launched a Pride reward loyalty program for our loyal Guests which reward customers who regularly use our hospitality service. From the first stay itself Guest start earning points. They can upgrade to silver, gold or platinum program and get entitle to many benefits like Priority check in, late check outs, exclusive offers, stay vouchers, meal coupons, shopping vouchers, bonus points, 24 hours guaranteed room availability, no black out days etc. as per their membership card.
What are your expansion plans for the upcoming quarter?
By 2022, we want to have 30 hotels in total. Currently, we have 20 hotels. We are planning to run hotel on management basis in Jamnagar, Surat, Gandhinagar, Bhubaneshwar and Nashik by this year. We have signed a deal with new hotels in Anand, Jabalpur, Bharatpur and Bhavnagar recently. We are planning to add 4-5 managed properties every year. Thus we are positive to achieve our vision. We are planning to open in Goa around 250 -300 rooms and put an additional 75 and 50 rooms in Nagpur and Pune respectively. By this year we are trying to tie up with a hotel in Mumbai on a management basis
What kind of challenges did you face this year?
This sector has been recognised for the potential to bring foreign currency earning and create a lot of employment. Recently the government has cut the GST rates. But biggest problem is number of licenses and same to be renewed every year. This is taking lot of Time & Energy of Hotel Unit and Government bodies are taking own time to renew the same which is creating problem to hotel owners.
The current interest rates are very high and long tenures are not available to support the creation of new hotels. The land cost is nearly 30 – 45% of hotel project which should be only 15-20% of the hotel project. The government has to increase the FSI available for the hotel to make it viable projects. Only if quality hotels come up in all gateway cities and tourist destinations then only the international tourists of India will grow thereby creating employment.
OTAs and OYO are distorting market pricing by subsidising room price for the capital they have raised and brought down the overall rates in the market which will bring down the quality of hotels in long term and reduce their capacity to upgrade.
How has hospitality industry been doing in the country? Has things changed over the past 2-3 years?
The business environment in the hospitality industry was improving last year. But due to the slowdown in the economy, occupancy and MICE business has been affected. In first quarter the total revenue of most hospitality companies have reduced in the comparison of last year. But recently the honorary Finance Minister has taken number of steps to improve the economy. So I feel in coming period the business will be better.
The initiatives from Govt. like infrastructure development, Incredible India, Make in India, Smart Cities, Clean India, Inland waterways have given hopes for the better development of hospitality sector in India. Due to a rise in disposable income of people, the domestic tourism sector have grown and is creating good demand from domestic customers. The international segment has also seen a growth over same period last year due to a good number of inbound arrivals into the country. All these factors will encourage prospects for India as a tourist destination.
What’s your taken on tier-2 and 3 cities?
The mid -sized segment is fastest growing in hotel industry. Smaller cities are growing as new business and leisure locations. The growth in Tier II and Tier III cities is aided by ‘the increasing disposable income of the people that has created immense opportunities for companies looking out for new markets to grow. These cities have availability of talent pool at a lower cost, reasonable real estate prices and a ‘conducive business environment. The mid-market and the budget hotels in India have the maximum potential given the domestic demand from business and tourism sector. Luxury hotels call for a huge investment and have longer gestation periods, as compared to mid-scale hotels given the investments involved in projects.