South Strategy

Advantage The Lalit Ashok

An ideal location has been an advantage for The Lalit Ashok Bengaluru. Ramiah Daniels, its new GM, speaks about how the city is seeing a surge in room inventory. By Sayoni Bhaduri

Ramiah Daniels has joined The Lalit Ashok Bangalore as its general manager recently but he already has the pulse of the city and the region. According to him, Bengaluru has seen immense growth in terms of rooms. "Bengaluru will see nearly 1,650 new rooms by the end of this year, most of them under new hotel brands," he says.

Bengaluru's growth, Daniels believes, can be attributed to the number of new brands that are entering the supply space. "The number of five-star rooms coming up is 1,062 while other categories are bringing in an additional 596 rooms to the city," he says. This is despite the fact that there has already been a correction in room rates across the board and a drop of a further five per cent is expected. "Average room rates have been hovering around Rs 7,000 while occupancies have been around 45 per cent on an average," he states.

The situation looks grim with travel going down by 30 per cent. Yet The Lalit Ashok has an advantage: its location. It claims to be the closest five-star hotel to the new airport. But the drop in travel has had a negative impact with the slump in the IT and the BPO segments. Also MICE is suffering due to poor infrastructure, Daniels says, "The city attracts a lot of MICE due to support from the government but inadequate infrastructure is forcing the business to look at Hyderabad." Bengaluru reportedly got only 3,750 room nights this quarter as against 14,500 last year.

The Lalit Ashok way

The hotel itself has managed with an average occupancy of 47 per cent and an ARR of Rs 9,491 while the city average was 51 per cent occupancy with ARR of Rs 11,500. These are the times the industry has to pull up its socks and work hard to create business. The Lalit Ashok too has prepared for the difficult times. Providing value addition to guests is just one of the ways. Daniels also mentions the tactical pricing strategies to bring in FITs. There is also a keen lookout to bring in groups to fill shoulder nights and weekends. He also said that its GDS positioning is also strong.

He adds, "The Bengaluru market has always worked on a ratio of 80:20 where 80 per cent is international travel and 20 per cent is domestic travel. As international travel has reduced drastically our constant focus is on domestic travel and non-IT sector. Since the US and UK market have both been hit by recession, our focus will be on the third biggest market - south east Asia." Within India his aim is to tap into the business clientele from Mumbai, Delhi and NCR.

Apart from this, Daniels also said that having the banqueting space has been a good revenue churner. "We try our best to maximise our yield during big MICE events," he says. The Lalit spa brand Rejuve is also gaining popularity through a membership it allows the locals and guests.

The way ahead

Daniels has sincere appreciation for the efforts the government is making. For instance, he mentions the revision in the taxation system and the efforts to get more MICE business into the city. Ever the practical man, Daniels clearly states that tier II regions like Ahmedabad, Jaipur, Pune and NCR have the brightest prospects. But he adds, "The success story of the Indian hotel industry seconds only to China in Asia Pacific. With the current scenario the way ahead will be focus on sectors like retail, consumer durables, FMCG, telecom, aviation and IT, which maintain growth and contribute to the GDP."