Practical versus grandiose

Akshay Kulkarni, director (South Asia) for Cushman & Wakefield Hospitality, speaks of the factors that will drive the Indian hospitality industry. By Sayoni Bhaduri

Akshay Kulkarni Director (South Asia) Cushman & Wakefield Hospitality

Even with such phenomenal growth that India is witnessing, the real anxiety is to know how much of this growth can actually be exploited for the hospitality and tourism industry. It is not just about increasing the number of rooms in the country - while regions like Kerala, Goa and Rajasthan are leading the way in the leisure market, they are also becoming more and more expensive.

Equally important is the state of travelling in India. According to Akshay Kulkarni, travel time from one part of the nation to the other is so tedious that the feel of a vacation disappears leaving travellers with a sense of remorse for undertaking such an ordeal. "There will be so much more growth once the proposed 36 airports get ready. This will directly affect locating new destinations, leave alone easy approach to them," he says.

Talking about the potential India has as a destination, he says, "We haven't even scratched the surface of what this country has to offer. What's required is really strong and powerful marketing strategies. The problem is there hasn't been a concentrated effort to grow the destination; there has to be a joint pitch from both the developer and other agencies."

True, India's biggest problem is a lack of a proper tourism master plan. There is no denying that the country's vastness often causes the biggest hindrance. Ideally there should be step by step development of certain areas, and then eventually other areas will also come into the fore. "But development should be sensible. If a consumer is ready to spend a fixed amount on a destination, then it does not make sense making something so lavish and grand that the consumer cannot afford in the end. But this mindset is slowly undergoing changes and affordability and standardisation are slowly becoming important," Kulkarni says.

Kulkarni believes that although Incredible India is a very powerful and brilliant campaign, it hasn't achieved its true potential in terms of deliverables. "It seems to elude most people that the biggest market for India is within the country itself. I think there have been wrong expectations that have been built by Incredible India - it doesn't mention the real urban India and the kind of projection rural India receives is far from what the reality is," he says. However, development of the Golden Quadrilateral project and Delhi Metro is fantastic.

The hospitality gamut

He says that the supply is a step-like graph when talking of rooms and development of hotels. "When there is excess demand, everyone wants to develop more hotels. But things are bound to stabilise soon because if the same room rate of US$ 300 and US$ 400 is seen in the heart of New York and here in India, there is definitely a mismatch. So stabilisation will have an affect and India will not remain a premium destination for life," Kulkarni adds.

Question is whether India will be able to maintain its glamorous premium position because after a point it is not about the value and experiences one gets but also the figure one has to spend. "This is the point where a hotel's marginal utility diminishes with dollar fluctuations. Right now everyone is riding the wave which is great for business but there will be a point when it will be a question of prices," he says, adding that Bengaluru has undergone something of this sort.

What is required in India, Kulkarni feels, is a public domain to track rates and occupancy. "Presently bodies like HVS and FHRAI come out with some data but it is not enough. There is a severe requirement of a perceived neutral body, which would conduct survey with complete transparency. With the business going such great guns there is no reason why competition would want to hide data or not want to know what others are doing. There is enough business for everyone," he opines.