Event Round Up

Convention emphasises the need for synergy

Held after a gap of 12 years, the 42nd Annual Convention of the Federation of Hotel & Restaurant Associations of India (FHRAI) saw more than 1,000 delegates participate along with CEOs of leading hotel chains and the top brass from the hotel industry. Express Hospitality presents a round up

The three-day convention, with its theme 'Mission Tourism: Incredible India', that was held in Chandigarh from November 10 to 12, 2006 was a grand success, according to the outgoing FHRAI president Manbeer Choudhary. This year, it had two new features - a session highlighting the role of women entrepreneurs and a lifetime achievement award. Another focus area on which delegates deliberated was the participation of prospective investors who are willing to build hotels in the northern part of the country including Chandigarh.

Day 1: Session 1: Public-private partnership

Considering the influx of foreign funding, the FHRAI devoted the first session to the growing need of public-private partnerships (PPP). Union Tourism Secretary A K Misra deliberated on the need for private companies to come forward with plans and suggestions on tourism and hospitality projects where government intends to join hands with them. He said, "Today, the tourism and hospitality industries are driven by the private sector and the government is dependent on them for infrastructure development."

Opening the session J S Bir, managing director of the Chandigarh Industrial & Tourism Development Corporation Limited (CITCO), gave an overview about the city of Chandigarh which is experiencing a change in the hospitality sector through PPP. He said, "Mega tourism products are coming up with increased private participation which is a good sign for the hospitality industry." A lot of infrastructure projects are shaping up in collaboration with foreign companies like the 73-acre theme park by Unitech Group.

Misra also informed about the various steps that are being taken in this regard that will ensure increased private participation. He added, "The ministry of tourism has proposed to set up Special Tourism Zones (STZ) in various parts of the country where integrated plans could be undertaken with private partnership." Also, there are various tourism projects under the Large Revenue Generating Scheme (LRGS) where private sector has been asked to participate, which were otherwise finding it difficult to take off. Misra also emphasised on the need for developing budget hotels.

P K Goel, managing director of the Indian Railways' Catering & Tourism Corporation (IRCTC), gave a thoughtful presentation on the areas where it is partnering with private players from the budget Rail Ratna hotels to luxury trains. He emphasised on value-added tour packages where hotels can also contribute. Further, IRCTC is putting up tender for 100 more food plazas (present count is 50 operated by IRCTC) where it called upon all FHRAI eligible members to participate in various projects covering hospitality, catering and tourism. The concern for cleanliness in and around tourist destinations were also discussed where private participation was upheld as inevitable.

Day 2: Session 2: Investment opportunities in Rangelo Rajasthan

Rajasthan has always been the flag bearer of India's tourism flag and it announced that it will become one of the front-runners in accumulating investment opportunities in tourism. Giving a vibrant presentation of the state, Commissioner of Tourism Department, Ajit Kumar Singh said, "Rajasthan, with its immense treasure of heritage and royal tourism, has opportunities galore for those who wish to invest in the state." Elaborating on the various facets that the state boasts of, Singh spoke about the public-private participation schemes in the areas of new tourism projects, religious, adventure tourism, etc. He elaborated on the Living Monument Programme that the state has adopted to upgrade some of its monuments like Amber Fort and Albert Hall. "There are opportunities for those in tour business as we are developing religious centres, night bazaars and night tours in the city. We are focused on adventure tourism and organised the Desert Motor Rally in Jaisalmer after tying up with private companies which is giving a new dimension to the state's tourism," he said. The annual Jaipur Vintage Car Rally, though a recent addition, has become an important event in the Indian social calendar.

To improve the urban civic infrastructure the state has taken Rs 1,750 crore credit from Asian Development Bank. This will call for integrated development of six major cities that offer immense investment opportunities, Singh mentioned. There has been an increased emphasis on upgradation of air strips to connect the state well apart from upgrading the existing ones. He also informed that a total of 15 such airstrips are in the process of development with the help of private sector.

The session concluded with a discussion on the new hotel policy that Rajasthan has adopted with 1.5 times increased Floor Area Ration (FAR) to the earlier norm. The floor was then open for interaction about the possible way to fight the license issues related to setting up of a hotel and of single-window clearances that other states need to adopt as well.

Session 6: Franchise agreement - The buzzword in the hotel industry

One of the most interesting sessions of the FHRAI was on the growth of franchise management and agreements in Indian hospitality. Vimal J Singh of Golden Tulip, Vilas Pawar of Choice Group, Rajesh Punjabi of Hilton and Uttam Dave from the Accor Group participated and spoke on various issues and trends in the franchise agreement model. The discussions ranged from repercussions associated with this model of operation to what will make it popular, as the various group representatives elaborated about the kind of franchise developments taking place in the country.

Punjabi spoke about why Hilton chose to come to India and invest apart from signing individual contracts with India and how hoteliers can take advantage of this. A key issue that was raised in the discussion was about the guarantee of performance that franchise management companies could offer to owners. "We see management contracts like partnerships. Therefore, we will only get into a contract if there is a belief to deliver something good. So we do look into performance guarantees," remarked Dave. Pawar remarked, "If Choice doesn't deliver profits, then we don't charge any fee to the owner. This is definitely based on gross operating profits; we only take a percentage of profit. However for the brand franchise, there is no guarantee because you are only buying the brand." Singh on the other hand took on the owners and said, "There is a lot of equity in the Indian hotel business that is not accounted for. Certain figures are thrown at us by owners, which can't be quantified and therefore, we as operators have to be careful. Also, if we keep cutting on fees, rest assured service standards will fall."

The session was moderated by Manav Thadani of HVS International who, while beginning the session, gave a well-knit presentation on Indian destinations (cities) that rank high for hotel investments according to an assessment by the consulting company. Thadani ranked Hyderabad, Mumbai and Goa in order of preference for investment. He also justified the ranking on the basis of infrastructure available and their pros and cons.

Day 3: Session 8: Travel trade and hospitality industry - Synergy for success

The last session of the convention was devoted to the synergy of hospitality industry with the travel trade sector. It was chaired by the presidents of key organisations of the travel industry and was moderated by Sanjay Kirpal, general manager of ITC WelcomHotel Rajputana Palace Sheraton.

Ram Kohli, CMD of Creative Travels, speaking to the gathering of hoteliers said, "We tour operators basically sell tours to clients abroad and also represent hotels. I request all hoteliers to please treat us as your sales agents. Today the demand for rooms might be high but a day will come when we would require the support of each other."

SSH Rehman, executive director (Hotels, Travel & Tourism and Foods), ITC urged for an understanding of market dynamics attached to the hospitality and tourism sectors, which are interrelated.

Rajinder Rai, vice president of TAAI, said, "The theme of this year's convention - Mission Tourism - can't be achieved by hotels alone; travel operators have to be the focal point. Internet is synergising every aspect of tourism that India wants to achieve." He spoke about the changing role of travel agents. Praveen Chugh, president of TAFI also suggested tactical solutions. He said, "We need to utilise the existing facilities optimally, use the weekends to decongest popular points and take tourists to newer destinations. We must also break into the April-September season for which there has to be some synergy between hoteliers and travel organisations."

The panel representing various travel organisations unanimously agreed on the need for a synergy starting from travel agents and ending with hoteliers to resolve the problems related to this sector.

Haryana CM Bhupinder Singh Hooda welcoming Governor of Punjab and Chief Administrator of UT of Chandigarh Gen.(retd.) S.F. Rodrigues	Panelists of the inaugural function.
CM Hooda taking a round at Exhibition with State Tourism Minister, Kiran Choudhary	FHRAI delegates getting traditional welcome (Gidda dance) at the Convention venue
FHRAI Award winners with their trophy