30 Minute Interview

'Infrastructure development has to be in line with the new capacity being added'

Raman Mohan, senior vice president-sales and marketing, Dawnay, Day India talks about Dawnay, Day India and the challenges facing the hotel industry. By Dinkar Farwaha

Raman Mohan Senior Vice President - Sales & Marketing Dawnay, Day India

How many acquisitions have Dawnay, Day Hotels India completed? How many more are in the pipeline?

We have already completed purchases in Ahmedabad, Jaipur and Pune and work has begun at these sites. Negotiations are on at various stages in Lucknow, Hyderabad, Bangalore, Mumbai and Chandigarh. We are zeroing in on other cities as well. We would not like to put a fix on the total number of hotels as the market potential is great, both for business and leisure hotels. But what I can say is that as we are in the process of acquiring land pan-India, we will develop properties in tier I, II and III cities wherever we find opportunity for a viable investment.

What will be Dawnay, Day's pricing strategy?

We are looking at positioning ourselves in the four-star segment and creating a product which fills the gap between budget and luxury. As of now, we are looking at a price band of US$ 80 to US$ 120. However, this could change marginally depending on market dynamics at the time of the hotel opening.

How important is technology to enable your sales and marketing strategy?

We are putting a lot of emphasis on technology and will be working with global IT majors to ensure that we have the latest online tools enabling instant access and booking options. We have taken a decision not to go in for any international alliance, and in fact in order to create an Indian brand which at a later stage can go global, it is all the more important that we are well represented on all Global Distribution Systems (GDS) and Alternate Distribution Systems (ADS).

What are some of the challenges facing the Indian hospitality market?

The Indian hospitality industry is not mature as of now and with the gigantic leap it is poised to take in the next decade we will find ourselves more aligned with global trends and the market segmentation will be clearly defined as luxury, upscale, mid scale, budget and economy. With several real estate companies now entering the hotel industry, there will be increased partnership between property-owning companies and hotel management companies in line with international practices. At the cost of repeating ourselves we all know that the critical issue facing the industry is the spiralling cost of land, which is of course in its own way slowing down the growth process. Moreover, infrastructure development has to be in line with the new capacity being added.

How do you plan to tackle the HR challenges?

Like a number of the other hospitality majors, we are also looking at the option of setting up our own management school. This would still take some time and we would at no point be able to meet the growing demand for all our manpower. We will be putting in a lot of emphasis on training, both at the induction stage as well as regular training sessions with a professional company.

How is the group combating the challenge of rising land costs?

It is a difficult task to combat rising land costs. Wherever possible, we have approached state governments to allocate land at reasonable prices so as to enable players like ourselves to put up viable projects. We are also looking at opportunities in mixed-use development where we can get some better deals. For example, in Jaipur we are part of a large mall development.

What will the traveller demand from hotels in the future?

The traveller of the future will have different demands based on the type of hotel he is staying in. Within our segment we believe that he would look for a value-for-money proposition. Brand recognition and value would be important, as also the right mix of technology and human interface.