The Hindu Business Line : `Rising hotel room stock has led to friction between brands, owners'

INTERNATIONAL terrorism and major health issues such as AIDS, SARS, and the Avian flu are factors causing insecurity among travellers, according to Mr John Bell, President, International Hotel Association.

He was speaking at the annual convention of the Federation of Hotel & Restaurant Associations of India (FHRAI).

Mr Bell said that the International Society of Hospitality Consultants annually prepares a list of the top issues and challenges that face the hospitality industry.

The geopolitical challenges, increasingly with a nuclear component, have added to the global uncertainty. Added to that is the imposition of new Government travel restrictions and wildly fluctuating exchange rates.

Mr Bell said that the proliferation of branded hotels with powerful loyalty programmes, though a potent force in the industry, had led to friction between brands and between owners.

He said that a new customer had emerged from changing demographics and discounted transportation cost. This is another challenge for the hotel operator. There is also increased competition from products such as timeshare, second homes, camping, and the cruise industry.

While destinations are experiencing revenue growth, the same cannot be said about profit margins. Labour and energy costs have surged, driven by aggressive union negotiations and rise in oil prices.

As travel and tourism emerges as a powerful global dynamic, attention is focused on the sector by international agencies like the World Tourism Organisation, WTO, ILO and the WHO.

Mr Bell said that what is less understood is that the member-Governments drive the agendas of these international bureaucracies. Issues such as flexibility of working conditions, standardisation of tourism services, the prospect of global classification of hotels, food safety standards and performance indicators for tour operatorshad the potential to increase the industry's operating costs and must be carefully monitored.

Mr M.P. Purushothaman, President of FHRAI, said that there should be more public-private partnership in the hospitality industry in India.

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