|Aditya Shamsher Malla|
Jaipur, an important city in the tourist circuit of the Golden Triangle, has been one of India’s primary leisure destinations. The city has some of the country’s oldest and renowned hotels catering to a number of domestic and international travellers. The improved connectivity to Jaipur from Gurgaon and NCR, has given rise to a number of MICE travellers visiting the city in the recent past. Thus Jaipur is not only an ideal leisure and a wedding destination but is also an emerging MICE location. According to HVS Indian Hotel Survey 2011-2012, Jaipur has witnessed a fairly large increase in the number of rooms. Approximately 500 new hotel rooms were added to the market in 2011/12 as compared to 82 in 2010/11. Furthermore, approximately 1,000 more hotel rooms are expected to enter the market by 2014/15. “There has been an increase in supply in the market over the past two years. What is interesting is that the occupancy levels aren’t really picking up. So the increase in supply has absorbed the increase in demand. The good thing is that the market is very stable and there is a projection of growth as well,” states Aditya Shamsher Malla, general manager, Four Points By Sheraton Jaipur, City Square.
Avneesh K Mathur
This continuous growth in the hospitality sector of Jaipur has been a result of its recent infrastructure and connectivity developments. Since the official announcement of Jaipur as a Counter-Magnet area in July of this year to ease the population pressure from New Delhi to Jaipur, the state government has made several proposals, including industrial developments. The Delhi-Jaipur Expressway project, which is part of this developmental plan, is at the working stage at present and is expected to cut travel time between the two cities by two hours. This will bring in more travellers from the capital city to Jaipur. “Continuous growth has been happening for the last two years and it will continue for another two years because of the realisation of the fact that in years to come Jaipur will become another NCR. The Delhi-Mumbai corridor that is being developed by the government will bring a lot of business to Jaipur. Another fact that we have not been able to realise is that perhaps in a couple of years to come, Delhi airport will become saturated and Jaipur airport will become fully operational as an international airport. Currently Jaipur has surplus inventory which will continue over the next two years but business will also increase proportionately and hotels will get their share of business. Also Jaipur will be another corporate hub in the next four to five years,” explains Avneesh K Mathur, general manager, Country Inn & Suites by Carlson, Jaipur.
Though the wedding and leisure segment form an integral part of Jaipur tourism, the MICE business is also showing potential growth. The recently launched Hotel ibis Jaipur, a mid market business hotel from the Accor brand is in response to this growing demand. “80 per cent of growth that is seen in the last two years has been from the MICE segment. Jaipur which was not able to hold large congresses and conventions for want of rooms, now has large number of rooms, halls available. The seating capacity has been expanded. In addition, this growth has been fueled by domestic travellers,” opines Sunil Gupta, general manager, ITC Rajputana, a Luxury Collection Hotel, Jaipur. Currently, more of domestic tourists than international tourists are seen visiting the city. The international travellers visit the city during the winter months while business travellers come in during the off-season. The leisure segment are seen coming throughout the year. “In 2007, there were 70 per cent foreign travellers and 30 per cent domestic travellers visiting Jaipur. In 2013, there has been 40 per cent foreign travelllers and 60 per cent domestic travellers,” adds Gupta. The large number of domestic traveller are mainly coming from surrounding states and cities like Gujarat, Mumbai, Bengaluru, Hyderabad and Chennai.
This increase in the supply of hotel rooms has led to a temporary war on ARRs. “The entire market is a supply surplus market and the supply over the last two years has completely outpaced the demand and hotels are really happy about their occupancies which is about 55 to 60 per cent. The ARRs have also dropped to certain levels, the RevPAR will stagnate over the next two years before we see an upward trend. And there is still some more inventory that will open in the next two years,” reveals Manish Kakkar, manager, Hotel ibis Jaipur. “In the last two years we have seen depleting ARRs. There is so much competition that we are not keeping in mind the expenses, the cost of managing the hotel. Some hotels will see no GOPs. It is essential for us to keep in mind the operating cost, the human resource cost, the F&B cost, etc. There has to be a balance between room tariffs and volume. The key to success is if we maintain and improve our services and the property. Also training will play an important role because we will see a lot of attrition. The GOPs will come through RevPAR. In today’s scenario, we need to have better RevPAR and focus less on ARR. Simultaneously while focusing on RevPAR, we should not ignore the bottomline. Continuous sales efforts and innovative marketing campaign will help maintain the business of the hotel,” iterates Mathur.
Despite the war rates, both the mid-segment and luxury hotels are having their own share of guests. The mid-segment hotels are getting a large share of middle to upper segment travellers because of their reasonable pricing and the availability of more rooms as compared to luxury hotels. Luxury hotels are more open to guests who want to have an experiential holiday. However, the days in a luxury hotel are limited to an average of one or two nights as compared to mid-segment hotels where the average stay is somewhere between three to six nights. “The mid-segment is robust and strong. Luxury hotels have a bit of a challenge in sustaining room rates but I don’t think volume has been a problem there. There might be many palace hotels, but their inventory is limited. The footfalls are much higher in Jaipur. Hotels like us have their select patronage while palace hotels also have their own charm,” explains Malla. Gupta agrees, “Demand for luxury hotels will definitely grow. Rajasthan is based on royalty. Anybody who comes wants to see the royalty. As far as the mid-segment is concerned, the volumes will continue to grow there. Luxury hotels are definitely here to stay for those who want to have an experiential holiday.”