South Strategy

When luxury beckons

Shelley Thayil, director (operations) at Kumarakom Lake Resort, speaks about how the hotel has maintained its positioning as a luxury brand. By Gayatri Vijaykumar

The Kumarakom Lake Resort, winner of accolades such as India's Leading Resort in 2006, 2007 and 2008 awarded by World Travel Awards, has devised strategies to tide through the current turbulent times. Speaking about how the hotel has fared in the first quarter, Shelley Thayil, director operations, Kumarakom Lake Resort, says "We've had an average occupancy of 55 per cent with an ARR of Rs 10,500 during the first quarter of 2009. I would say that the ARR is better than the present industry standards."

It has been more than a year since Paul John Enterprises, the promoter of the Kumarakom Lake Resort, opened its second property The Paul Bangalore, an all-suite luxury hotel in the city. Since its launch, the Bengaluru market, which saw ARRs sky-rocketing over the past few years, has seen a rationalisation. According to Thayil, by the end of the current year, it is predicted that 1,500 new rooms will have come up in Bengaluru alone, helping to bridge the demand supply gap further. The relocation of the airport to the outskirts of the city has affected a few of the players located near the old airport. However, according to Thayil, The Paul Bangalore's location close to the city centre has ensured that it has not been affected.

The Paul way

Efficient sales and marketing becomes important to ensure that a brand survives and remains successful, especially during a downturn. A proper balance between pricing and positioning becomes essential. Apart from other strategies, the tie-up with the Small Luxury Hotels of the World has helped position The Kumarakom Lake Resort higher, explains Thayil. "We have worked at expanding market segments, providing value-adds without sacrificing rates, intense online promotions and activities, etc. We've tried to develop a distinct niche for ourselves and have also tied-up with Small Luxury Hotels of the World. I guess we can say that ours has been a balancing act with price and image without compromising too much on either," he states. In addition, the group also promotes its restaurant locally and sells health club memberships as well. "We also do a lot of cross-selling between Kumarakom Lake Resort and The Paul Bangalore," Thayil adds.

Impeccable service is one of the most defining factors of luxury, and staff training takes paramount importance here. Explaining the company's HR policy, Thayil says, "We avoid trainees as much as possible and focus on further training existing staff to ensure improved efficiency and better service."

The way forward

The slump in the IT sector has affected cities such as Bengaluru and Hyderabad which in turn has affected the hospitality segment. Says Thayil, "Over-dependence on the IT segment isn't good and further avenues to increase tourism to the city must be exploited." In addition, in order to survive the crises internally, costs need to be kept low while operational efficiency is improved and all sales and marketing expenses must be measurable, feels Thayil.

On the tourism side, a lot more has to be done to boost tourism. "The reduction of local taxes was a good move but further and faster development of infrastructure is required especially during a downturn," adds Thayil. He believes that both mid-market and the luxury segments will grow, but according to Thayil, affordable luxury will be the next 'in' thing.