The Hindu Business Line : Chennai hotels look for ways to offset likely fall in occupancy

Chennai, Oct. 15 To make up for likely fall in occupancy levels owing to the global economic slowdown, most hotels in Chennai are looking to other sources of revenue than just from rooms.

Though on surface it seems that Chennai is yet to feel the pinch of the current recession, hotels have started reporting lesser occupancy rates even during weekdays. Industry sources say “worse days are ahead”.

Demand for Restaurants

However, there is a good demand for restaurants in big hotels in the city. A major reason why people flock to big hotels for food is lack of sufficient, quality stand-alone restaurants in the city. Even the existing few are not allowed to serve liquor, “which is a key impediment,” say industry sources.

To cater to this segment and to cash in on changing lifestyle aspirations, hotels here are now focusing on revenue sources such as food and beverage and spa. Most hotels in the city are planning to increase the F&B revenue share to at least 50 per cent of their total turnover.

Facelifts

Taj Coromandel, for example, is expanding its restaurant capacities by close to 25 per cent, said Mr Arindam Kunar, General Manager of the hotel. “We are, in fact, in the process of reinventing our F&B division with new-look ambience and themes,” he said.

The hotel is renovating its Chinese restaurant – Golden Dragon. It has renovated its coffee shop (Match Point) and renamed it Anise, an all-day dining restaurant with increased capacity. It has also converted another restaurant, the Patio, into an upscale Italian restaurant called Prego. Including Southern Spice, it currently has four restaurants and one bar. “We are also planning a spa here,” said Mr Kunar.

According to him, F&B contributes close to 40 per cent to the total turnover of the hotel now. “We are hoping to take it to 50 per cent in the months to come,” he said.

Mr Sharad Puri, General Manager of the Oberoi group’s Trident, Chennai, said the F&B contribution to the hotel is 30 to 40 per cent, “and we certainly want to increase that”.

Spa for cash flow

It recently launched a new coastal cuisine restaurant – Samudra – the menu card of which flaunts dishes from most Indian coastal regions. Apart from Samudra, it has another all-day dining restaurant called Cinnamon and a bar called Arcot. “We also see our new spa as another key source of revenue,” said Mr Puri.

Last month, Trident launched a spa and fitness centre. According to Mr Puri, Trident has hired therapists from Indonesia for the two-suite spa.

Last year, the 214-room The Park earned a revenue of Rs 80 crore and 40 per cent (Rs 32 crore) of that came from F&B, “and we have been registering a 20 to 24 per cent growth rate year-on-year”, said Mr V.V. Giri, Associate Vice-President and General Manager, The Park, Chennai.

He said the Thai restaurant (Lotus) alone, “with just 45 covers, makes at least Rs 18 lakh a month”.

The hotel, apart from Lotus, has two restaurants – 601 (all-time dining) and Aqua (world cuisine) – and two bars — the Leather Bar and Pasha.

Food festivals

Besides, hotels also announce food festivals to increase footfall in their restaurants. These festivals are often based on specialty cuisine as diverse as Rajasthani and Chettinad to Mexican and Chinese.

At times, they are also based on specialty foods such as seafood and ice creams.

Hotel Accord Metropolitan recently celebrated Gujarati Khaana Utsav.

“Through such festivals, we target mainly at retaining our regulars by breaking the monotony. Because, today’s young and dynamic affluent population is always on the look out for newer services, products and ambience. To cater to this segment, hotels have to constantly do up its restaurants, offer specialty food and beverages,” said Mr Rupesh K. Pandey, Manager (F&B), Accord Metropolitan.

The 160-room hotel recently launched a new rooftop restaurant – Pergola – and night club OPM. Besides, it has a coffee shop – Season – and a lounge bar – Zodiac.

For Accord, rooms and F&B revenue is in the ratio of 60:40. “Our aim is to take it to 50:50,” says Mr Pandey. According to him, 75 per cent of the F&B revenue comes from non-guests.

Three-star hotels too have been seeing more footfalls at their restaurants. Mr Vinoj P. Selvam, Executive Director, Hotel Checkers, said in his hotel the F&B contribution is almost half of the total revenue. “At times, it even exceeds that.”