Incredible India needs more rooms (part 2)

It is a reality we all face today. Try booking a room the last minute in any metro where a sporting event or a rock show is taking place, and you will either be disappointed because the room is not available or because you’re expected to pay through your nose. The truth is, India is woefully short in meeting demand for travel accommodation.
The primary shortage is felt in large cities and metros like New Delhi, Bangalore and Mumbai. Even till a few months ago, occupancy rates in hotels in these cities were in excess of 85% - that’s high by any standards. The prices, correspondingly even higher.

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The Commonwealth Games, the World Cup Hockey tournament, the ICC World Cup, another, probably bigger, IPL 20/20, all are just a couple of years away. And in this short period, all the hotels that are coming up over the next few years, can at best, add 30,000 rooms to the existing capacity – not enough by any measure. So clearly, the answer lies elsewhere.

ALSO READ PART ONE: NY has more hotel rooms than all of India put together!

New Delhi, where the room shortage is going to hurt the most, seems to have a plan. Under the bed and breakfast scheme, New Delhi hopes to add close to 25,000 rooms from the independent accommodation sector in time for the Commonwealth Games. These will include B&B’s, Guesthouses, Homestays etc.

Other states are watching and finalising their own plans for meeting the shortage. If the 7 to 8 large metros in India can muster up half the number of rooms from the independent stay sector, we'll be in a good position to cater to the expected increase.

Backing intent with application

In most tourist destinations like popular hill stations, the beaches along the coasts of India, and in some of the heritage destinations, guesthouses, Bed & Breakfasts and homestays are already present. These accommodations have started complimenting the hotel room inventory and ensuring that the room rates at these hotels don’t go the same as rates in the metros.

But getting people to offer their spare rooms for tourists is only half the job done.

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Even if we are able to get 60,000-odd rooms from the independent accommodation sector into the market by 2010, the challenge will lie getting these accommodations into the larger tourism ecosystem.

Currently, these units function without any clear policy direction or guidelines. Most of the occupancy that they are able to generate on their own is through word-of-mouth publicity and some individual PR initiatives. While this approach may benefit a handful of the few early starters, most others will need a push at a more organised level.

Organising the independent accommodation sector

For a start, these independent accommodations need to be categorised where the traveler understands the difference between a B&B and a Guesthouse; between a homestay and a heritage home; between a dormitory and a dharamshala.

Then, the fresh inventory made available by these accommodations, needs to be organised and plugged in to large Global Distribution Systems. The cost of generating and completing a booking, needs to be brought down from the current days, to minutes. A real-time stock of inventory is essential if we are to enter a distributed environment where a booking to the thousands of accommodations in India could come from any of the millions of travellers wanting to book a room.

A rating system also needs to be put in place where customers know exactly what they are paying for at the time of making a booking. This also needs to be backed by a nation-wide accreditation system, where end-customers and agents alike, know the track record of the accommodations before they make a booking.

Generating room inventory innovatively, seemingly out of nowhere, is a great start, and it must be applauded. But it's only when the supporting ecosystem is in place, can the potential of these independent accommodations be fully realised. Incredible India will do well to keep this in mind while promoting the B&B, homestay and guesthouse initiatives. (Concluded)

First published on UTVi

NY has more hotel rooms than all of India (part 1)

It’s heartening to see the direction India Tourism is taking. Thanks to the marketing initiatives, like the ‘Incredible India’ campaign in China during the recently concluded Olympics, Tourism in India is growing at roughly 20% year on year. However, at present, India is just not geared to cater to this growth - the roughly 400 million Indians and over 5 million foreign nationals traveling in the country every year. The marketing, PR and branding is going great guns. It’s the physical infrastructure, air, rail and road travel and lodging that needs a shot in the arm.
New airports in major cities like Bangalore and Hyderabad are helping build capacity that is sorely needed to handle the growing numbers of air-travelers. And with the expansion of current airports, like in Mumbai, the congestion that we’ve been seeing at airports for the past few years, may soon be a thing of the past.

Our rail network is already pretty extensive and the focus is now on improving the service levels and quality of travel. After the success of Palace on Wheels, newer initiatives like the Royal Rajasthan on Wheels, Golden Chariot in Karnataka and the Southern Splendour project in Andhra Pradesh are great to widen the choice for travelers and further give a boost to the tourism sector.

The network of expressways and highways, too, has improved tremendously over the last decade or so. And that’s opened up the option to travel by road like never before. Luxury coaches, even the long distance ones, are now competing with trains in terms of comfort, efficiency and value for money. Online bus booking aggregators and websites have made choosing and booking a bus journey as easy as booking an airline ticket.

That leaves the accommodation bit to be addressed. Where and how do we accommodate the millions of people traveling India in a clean, safe, comfortable and cost-effective manner? Does the answer lie in just building more hotels or can something else, more innovate, be done?

India only has about 100,000 hotel rooms across the country. To put that in perspective, New York alone has more hotel rooms than that. So does London. And Beijing, in preparations for the recently concluded Olympics, built its hotel room capacity to over 100,000 rooms. We are currently about 150,000 hotel rooms short in meeting tourism demand and with the Commonwealth games scheduled for 2010, the ICC World Cup Cricket in 2011 and a spate of other international events over the next 2-3 years, the shortage of hotel rooms is only going to get more acute. It’s pretty clear that we won’t be able to bridge the demand-supply gap in the near future by relying on new hotels, both planned and those already coming up. And it’s here that the Tourism Ministry has been making all the right moves.

Seeing the success and popularity of homestays in Kerala, the Delhi government has initiated the Bed & Breakfast scheme in the capital, inviting people with spare rooms in their houses, to convert them into tourist abodes. To sweeten this incentive, the income people generate from these B&Bs will not be taxed.

Other states too are adopting a similar approach. In Rajasthan, it’s homestays and heritage houses that are being given the push. In Maharashtra and Tamil Nadu it’s B&Bs. In Karnataka the Atithi Homestay initiate had quite a few takers and it’s now been given a stronger, renewed push. Himachal Pradesh, Uttarakhand and Goa already have loads of guesthouses. The nomenclature, schemes and incentives used in different states could be different but the message is clear – independent accommodations like homestays, bed & breakfasts, guesthouses, serviced apartments etc. are a great way to meet the shortage of travel and tourism lodging.

And the numbers add up. (To be continued…)

First published on UTVi