Raj Gopaal Iyer, director, Raj Hospitality, speaks about the myriad challenges facing the hospitality industry By Steena Joy
How do you perceive the hospitality scenario in India in 2015?
India’s booming tourism sector has not only witnessed international investments but also achieved international accolades. However, pilgrimage tourism is still untapped in India. Standardised quality hotels, which are not only clean and hygienic, but also reliable and safe, are lacking in almost all the pilgrimage destinations. Also, in spite of large resources available there is a shortage of manpower. Almost 50 per cent of students enrolling in hotel management institutes, do not join the industry. The country’s hospitality schools do not understand the needs of this industry and do not upgrade their syllabi to match the changing dynamics.
Management vs ownership model, which do you think will be the future trend in the country?
Getting manpower and retaining it is the most challenging factor. Outsourcing has been praised as cost-effective, efficient, productive and strategic – but also condemned as evil, money grabbing, destructive, ruthless, exploiting the poor, destroying communities and nations. Outsourcing incentives are huge and can lead to falls in service costs of 50-60 per cent.
Both management and ownership models are good in their own place and have their merits and demerits. But in today’s competitive world when everything is driven by vision, plans, quality and growth, it is always better to opt for the management model.
Will we see a lot of mixed use development in hospitality?
Hospitality development today assumes many different shapes. Although the development of single-purpose, freestanding hotels still occur, it is common to design hospitality projects to accommodate a mixture of uses. Traditional hotel rooms may be coupled with residential units, vacation ownership units and commercial components or any combinations of these. The core structuring issues common to these mixed-use scenarios involve an understanding of how the various components will interact with one another (or, perhaps, be isolated from one another), how the projects may be structured to permit legally separate leasing and sales activities and, perhaps most importantly, to permit separate financing for each separate component of the project.
How can hotel chains use social media to market their brands?
With social media, such a key element of marketing, it’s no surprise that the industry is seeing a growing movement towards ‘social hospitality’. More than 90 per cent of hotels actively use Facebook. Approximately 78 per cent of hotels use Twitter. Pinterest is the third most popular sharing channel among social media users. Instagram is one of the fastest growing marketing tools for hotel chains because 60 per cent of its user base comes from outside the United States. While the myriad of online platforms give hoteliers a direct window into what guests are seeing, saying and feeling about their properties, they also must be prepared to respond to posts across channels quickly and effectively or risk viral customer complaints.
How do you see the future of franchising in India especially in the restaurant segment?
I am sure it is going to increase as India is witnessing rapid urbanisation of small towns and growth of mid-sized cities. This along with rising population in key metros and higher disposable incomes is fuelling growth in every industry. 35 per cent of India’s population will be in urban centres by 2020 totalling to 53 crore compared to the current urban population of 32 crore. Consumer markets are being driven by the country’s youth population. By 2012, there will be at least 2,000 more QSR outlets across India. With Starbucks and Dunkin’ Donuts entering the market, there is a lot to look forward to.
How many brands do you service at present?
We are just a three year old startup company and we are slowly now trying to open our wings all over the country. We have brands called Mandharaa in the three-star budget segment, Kaluva in the four-star segment, Samantha Resort in the resort category, Zest in the five star segment, exclusive for marketing hotels only and Blue Petal for spa management.
What is the roadmap of Raj Hospitality in 2015?
In 2015 we plan:
- To have two more hotels on the lines of La Classic on lease and run.
- To manage four more hotels of different brands.
- To look for investors for a project called The Hermit 7, pilgrim hotels in seven moksha stalas of Karnataka.
- Establishing Raj Academy, Hotel and Business school
- To bring a international hotel chain into India through a tie up.
- To start a holiday company to handle tourists all over the world.
- To start RACE: Raj Academy for Culture and Education, for social commitments from school level to the corporate level.