India comes under the spotlight as it is a hospitality market of great appeal and notable growth. Known in reputation for cultural tourism; the great Indian temple circuit, health tourism and adventure, it is an exciting and emerging place for both investors, managers and guests alike.

Domestic Leisure

Travel agents agree that domestic tourism has grown steadily over the last four to five years. A strong factor influencing the revival of hospitality is the increase in domestic travel with weekend getaways and family holidays proving to be most popular. 63.53% of hotels participating in Federation of Hotel and Restaurant Industries in India (FHRAI) said that more than 50% of their guests come with their families. 25.8% of additional members said that more than 25% of their guests come with their families.

In addition, the response shows that a large number of families bring children in different age groups. This clearly shows that facilities and services of the hotels should be oriented to the needs of ladies and children. 

Known hotels and overall noted areas of success are within the Taj group, Salt lake city in Kolkata, the international airport commercial zone and Whitefield. Amid the top end, the questions are whether to build a prototype, whether to be the same as the neighbour or to try something new. The positive economic and investment environment suggests there is room for all.

Business Travellers

In addition to leisure travellers are the business visitors. Concerns by this category are the many rates and discount levels for the same room on the same day. A big factor for success is a hotel's competitive pricing and its positioning in the market but also ensuring the guests are satisfied with the deal they get.

Many business travellers find that Indian hotels were expensive compared to similar hotels in competing countries. Given that a business traveller has no choice and has to travel to India and to a particular city this proves frustrating and off putting.

In remaining competitive within this niche market, hotels are also working toward good services in order to retain guests. It is widely believed, as in any country that the key to good service is trained staff and a low turnover among the staff. In addition, it is becoming paramount for hotels to have deliberate and specific customer retention strategies.

Restaurants

According to research carried out by the Federation of Hotel and Restaurant Industries in India (FHRAI) there are approximately 500,000 restaurants in India in the organized sector. International and domestic multi-unit restaurant groups are expected to drive the expansion in the restaurant industry in India.

Increasing urbanization and rising disposable incomes mean that Indian consumers are able to spend more on food. However, only 2.4 percent of their food expenditure is actually spent in hotels and restaurants (including on premises and take-out sales).

In terms of culinary trends, there is the popularity of health foods, use of fresh and authentic ingredients, expansion of quick service, acceptance of new fusion concepts, restaurants with a focus on entertainment, and ethnic and regional cuisine restaurants and establishing of the chef entrepreneur.

To increase sales volume, multinational restaurant chains made a downward price revision, added more spicy items in their menus to satisfy Indian taste buds and now offer more vegetarian toppings. This led to a dramatic improvement in their performance.

Problems and areas for development

The Indian state tourism departments are spending large sums on promoting each state with it's regional uniqueness. New destinations such as Manali, Udaipur, Mahabalipuram are finding their place on the tourist map each year. With the newness of each destination is the need to provide and improve hotel and accommodation unit facilities and services. In such recently developed places there is still an absence of basic infrastructure and amenities for tourists.

Given the population of India, one factor that has to be taken into consideration is the overcrowding. There are expensive and extensive needs for additional drinking water, electricity, medical care etc., to many regions but there are also a significant number of small and locally invested in projects that can help the accommodating of guests.

In customer survey results it was found that most of the shortcomings were hotel specific. Some general factors however were: poor services, untrained staff, (many did not speak English), lack of renovation in the hotel, lack of evening entertainment activities in the hotel, (this was particularly felt in a place like Manali where the tourists had nowhere to go in the city) and lack of activities for ladies for whom they expected things like cooking lessons, swimming lessons and other engaging activities.

Additional charges for items like laundry and liquor didn't go un-noticed either. It appears that some hotels give cheap package rates and try to make up on non-package items. In addition, some guests complained about poor Internet facilities in the hotel. Suggestions were also to provide a counter or a person to give information on sightseeing, shopping etc in the city, to have a library in the hotel and more variety in F&B rather than the same buffet everyday.

Being a developing market, India is not without its problem areas as given. When expanding the tourism reach, the demand and supply balance indicates that there is a need for more quality hotels and for convention centres.

SpotLight is the weekly column exclusively written for 4Hoteliers.com by Sarah Muxlow, it is highlighting the challenges and issues which the global hospitality is facing today.

Sarah is writing for hotel and restaurant owners, hotel chain managers, producers/growers/sellers of food & beverage, restaurant associations, governing bodies and hotel schools. She is looking at the problems they face...competition, trends of branding, staff shortages, unskilled staff, turning out students who are looking for good in-house management training schemes with hotel chains, what makes a good quality training course at a hotel school and more... 

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