The Hindu Business Line : Minding their business!

Business hotels, as they are popularly known, convincingly tread the middle path between luxurious accommodations and budget hotels, to give the four- and five-star category a new lease of life.

Business hotels give their guests everything that they need for a comfortable stay minus the frills. Such has been their influence in the hospitality sector, that even luxury players such as the Taj group and Welcomgroup are shedding their garb of grandeur and venturing into this territory.

This category, which is gaining ground in India, has had its share of ups and downs but is still ruling the roost thanks to its targeting the largest segment of travellers, the mid-segment.

Jean-Michel Casse, Senior Vice-President, Operations India, Accor Hospitality, that owns Novotel, explains, “India, for a long time has been dominated by hotels in the luxury category. Innovative ways of construction and design and use of modern technologies has helped bring down the cost of hotel development. This has enabled mid- and upscale hotels to grow and fulfil the demand for more cost-effective accommodation solutions for domestic travellers and visitors to India. Guests experiencing hotels in this category are realising that they are able to live without the frills of luxury hotels.”

B for business

Sound strategy: The Novotel in Mumbai

As the name suggests, businessmen and corporate honchos are the target customers for these hotels.

They fit the bill for the workaholic who travels five out of 10 days, entertains clients and holds meetings, and is also conscious of how much he shells out on every trip. The branding of these hotels is more often than not pegged on this plank.

These hotels frequently come up with packages for conferences and amenities tailored specifically for business meetings, board rooms for addresses by corporate honchos and seminar halls for AGMs — the idea being to provide a one-stop shop for business and leisure.

Fortune Hotels by Welcomgroup, which has hotels in the four- to three-star categories across the country, for example, lets you ‘plan a conference’ online by keying in the number of people, rooms and the style of conference planned (audio visual, cocktail, U-shaped, class room, board room etc). Guests would be able to browse and compare from their shortlisted options.

The Gateway Hotels, part of the Taj Group, too have the ‘business event planning’ option on their Web site.

In fact, their hotels give guests ‘work’ options with 24x7 business services such as a business centre, facsimile, secretarial services on request, courier services and personal computers, depending upon the city, touching a chord with those on a serious business trip.

Globetrotter plus family fun

However, the popularity of these hotels is not limited to the businessperson alone. Many of the hoteliers admit that one of the main reasons they have survived through the troughs in the hospitality industry are their promotional offers for leisure and family fun.

Casse adds, “On weekends, Novotel appeals to families with the Family&Novotel programme. This is a very popular signature programme which sees families flock to Novotel to enjoy leisure breaks.”

In fact, he adds that this is one facility that makes Novotel a preferred choice.

The leisure option for weekends is also promoted by other business hotels to attract families and couples looking for a ‘stay, swimming pool, spa and food’ package.

Tiding through

However, the recession has had its effect on the hospitality industry. The slowing down of tourism and business travel has resulted in a price adjustment favouring the traveller.

T. Natarajan, CEO, GRT Hotels and Resorts, says that the four-star category was no alien to the downturn and it was repeated rate negotiations with customers and value for money offers that helped them survive. GRT Grand, Chennai, was named the best hotel in the four-star segment by the Indian Tourism Department in 2007-08.

Going down the ‘tier’

Another interesting trend that has been noticed is the percolation of the business hotels to tier-three cities. While plush hotels were earlier associated with the metros and tier-two cities alone, the pattern seems to be changing.

The Gateway Hotels have a presence in cities such as Surat, Vadodra, Nashik, Vijayawada and Varkala; it also signed up a new property in Shirdi this month. Fortune Hotels too has business properties in Vapi, Kozhikode and Manipal among others.

What’s in store

Analysts say that the surge in the hotel industry, irrespective of whether it is a luxury or business hotel, has taken place in the last three–four years due to a shortage in the number of rooms. With tourist arrivals in India reaching the 5-million mark, the need for rooms is expected to increase, both in the luxury and business category.

Geoff Magee, a hospitality consultant, adds that statistics show that occupancy levels have been almost the same for both four- and five-star hotels in India (in the 72-75 per cent bracket). However, he feels that the four-star category should be prepared for a threat from five-star properties which can provide added incentives with better rates as well as three-star hotels which have the advantage of better rates and can also up their facilities to match that of a four-star property.

The competition for business hotels also comes from high-end service apartments and premium guest houses that are a popular option these days amongst IT companies.

But with their peg firmly on catering to the ‘business’ schedule of their guests, plus interesting offers and packages for a leisure trip, this category seems to charting a course of its own.

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