YOUR CHECKLIST WHILE PLANNING A HOSPITALITY PROPERTY
By Harvinder Sikka, MD, Sikka Group India is home to a huge mix of cultures and landscapes. This is a fodder in itself to make sure that the interest of people visiting the country is never diminishing. Hospitality is an important aspect when...
By Harvinder Sikka, MD, Sikka Group
India is home to a huge mix of cultures and landscapes. This is a fodder in itself to make sure that the interest of people visiting the country is never diminishing. Hospitality is an important aspect when the overall infrastructure of a country is considered. Let’s have a look at the key aspects which are important when planning any step forward towards acquiring or constructing a hospitality property. Before moving ahead, let’s be very clear that although everything in hospitality is tangible, still the end results are defined by the quality of services rendered.
Location of the property can be gauged on various aspects and parameters basis the kind of development. If we are looking at a full fledged property, it’s got to be strategically located. Agree or not but any property which is strategically located would have the cushion of automatic acceptance. Connectivity should always be a major aspect while looking into hospitality properties. In addition to all this, the accessibility of the property from railway station and airports also holds key in boosting the prospects of the property as these are the two common ways used by tourists to commute in a vast country like India.
Demographics is the most important aspect which cannot be sidelined even the slightest while evaluating a hospitality property because at the end it is the population which would define how well the venture turns out to be. This way, you need to be well aware of factors such as age, race, gender, economic status, level of education, income level and employment, among others. We all know that in India, tourism defines hospitality in a big way and keeping track of the above will ensure that your property does a decent business even in the off seasons as well. Segmenting a population into demographics allows you to assess the size of the potential catchment area and see whether the services on offer are reaching your most important customers. Moreover, you should be inclined towards setting up the brand as a corporate destination because season or no season, business travel is prevalent throughout the year. You can also look at tie up options with big corporate houses and MNCs which will enable maintain minimum occupancy levels throughout the year.
Themes play a very vital role in maintaining the uniqueness of a property especially in hospitality. More than that, you should be cautious that the name assigned to it resembles in the theme as well. Any property which carries a tag of being a class hospitality property would sure need to have a decent enough theme to support it’s class. A classy theme goes a great way in creating a recall value for the brand and hence encouraging people to revisit you again.
Pricing strategy needs to be very apt and that is the reason it is one of the trickiest parts of the hospitality business. If you are very lowly priced, you will not be able to survive in the market and if you are very highly priced, your competitors are bound to eat up your business. One must not forget that even though the structures and the deliverables are all tangible, the final charges are being made for the services offered. So you can see that unlike other industries and sectors, hospitality is very much service driven. Also, if you get into tie ups with corporate houses and MNCs, you will need to give them alluring rates so that the business does not suffer. In this model, you might earn a little less on all occupancies but the eventual return would be more in all aspects.
Accommodation and food are two basic aspects but there’s much more to it than just these. To highlight a few, you need to have classy bars, exotic nightclubs and pubs. In addition to that, you should also have convention centres and banquets to have options for people looking at business meets and events. The varied product mix you offer, more are the chances of you becoming a one stop destination for people in the region because they will have that thought process of being able to find everything of their hospitality concern in your property.
Hospitality is a very tricky trade and if understood well, can reap huge benefits for you but equally there are chances of people faltering at the wrong juncture and incurring huge losses in the process.