The Hindu Business Line : Novotel sees exciting times for hospitality sector

Hyderabad March 28 For Mr Philip Logan, General Manager, Novotel, part of a global network of hospitality and convention chain, India and growing centres such as Hyderabad and Bangalore, in particular, are rocking.

The growth potential is understated. From a situation of push marketing, the hospitality sector would witness automatic pull by 2011, when global businesses would line up for more reasons than business, possibly merely travelling. And places like Hyderabad and Bangalore with new airports will lead this charge.

"We now manage one of the largest convention centres in South Asia at Hyderabad which can host about 10,000 people and are close to adding one more in Mumbai. In the first year of operation, we have had 173 events.

Over 200 events have already been confirmed this year. Once the international airport is ready by early 2008, you will find more conferences being hosted in India," he explained.

Some ironies

Mr Logan, an Australian, who has toured all over on various assignments, says there are a few ironies in India.

For instance, India accounts for about six million global travellers as against 22 million in a small place like Hong Kong. The Manhattan area has more hotels rooms (2.2 lakh) than all star hotel rooms in India. It is cheaper to get a hotel room in the US and other parts of the world compared to Hyderabad and Bangalore now.

Ironically, it is cheaper to travel to South-East Asian destinations on a holiday rather than travel within the country. But all this will change. The four new international airports under way and 32 secondary airports planned will make travelling easier with better connectivity.

"The hospitality sector in India is profitable and we expect more players. For instance, we now have about 300 rooms and have added another property at the new international airport that will have 300 rooms. Two more are in the offing under IBUS or Internet Business brand, taking it past 1,000 rooms in Hyderabad alone," he said.

Capacity constraints

So what is the basis of this confidence? Booming economy and capacity constraints. Therefore, you have high hotel room costs of $300 a day, as against about $100 per day. The trade off is short-term gain versus long-term interests.

According to a global survey, the average return from an international traveller is about $749 a day as against $212 a day from domestic traveller. If a hotel manages to convince such a traveller to stay for a couple of days more, this would cause a multiplier effect.

In a place like Hyderabad, some 11 global airlines touch base. With the new international airport, six more international carriers are set to commence operations.