South Strategy

A fair chance

Subroto Banerjee, general manager, The Chancery Hotel shares how the hotel has retained its fair market share during testing times. By Neeti Mehra

While the luxury segment in Bengaluru has nose dived much below the heady highs that prevailed two years ago, a lesser talked about fact is - so did the mid-market segment. Subroto Banerjee, general manager, The Chancery Hotel, a 4-star deluxe hotel in Bengaluru, says that the hotel is looking at new segments as a source of business, maintaining a healthy mix of business and leisure clientele.

The Bengaluru market

For the mid-market segment, Banerjee reveals that that the prevailing ARRs are Rs 5,500 while the occupancies have stagnated at 45-50 per cent. It is a scenario which the hotel market is getting accustomed to, given that additional inventory, especially in the luxury segment, will flood the market, driving down rates further leading to a cascading effect. "Almost 2000 rooms would be added by the end of 2010 both in the mid-market and luxury segment," he says. Will additional inventory lead to more realistic ARRs? Banerjee replies, "I think rate rationalisation has more or less stabilised, and it may go down slightly more." The traveler is also looking for value for money, and is squeezing out worth from every Rupee possible. Explains Banerjee, "Depending on the product, every one is looking for the best deals with maximum add-ons at the lowest rates, without any volume guarantee."

The Chancery way

The city center hotel is not dependent on the IT business for ensuring occupancies nor the location of the airport. However, travel spends for all industries have reduced drastically and this is affecting the property's fortunes. "We too are affected," he opines.

They have turned to the domestic market for FFE - the key being using the best quality at the best rate and flexible payment terms. Also, to increase efficiencies they are adopting technologies that will hold them in good stead. Controlling costs is paramount and reducing employee costs, F&B, etc are under close scrutiny. Going forward, staff reductions, multi- tasking as well as cross-training will be some strategies employed to reduce costs.

The way ahead

The Chancery will tap tier II cities in the domestic sector, the Middle-East and the European market internationally. He sees potential for MICE, but avers that the industry is still nascent and has to be nurtured by the Ministry as well as the ICPB, etc. "The start has been made in the right direction," he says, adding that the Ministry is concentrating efforts to position and promote Karnataka as a heritage, wildlife, wellness, and a business destination. "The government of Karnataka is being extremely supportive," he says. In the end, he places his money where his mouth is, and concludes by saying that the future lies in the mid- market segment.