Hoteliers bring F&B, Salon services in focus as room revenues remain dull

Ashish Kulshrestha | The Clear Picture

The Indian Hospitality industry is focusing on increasing its non-room revenues to provide a cushion to their battered business even as they expect room revenues to pick with rising vaccination numbers in the coming fiscal. Companies such as Tata Group owned-Indian Hotels, ITC Hotels, Chalet are firming up plans to expand their food and beverage business, salon and spa services to benefit from the opening up of the economy even as room rates are likely to take longer to improve.

The IHCL, apart from owning Taj Group of Hotels, also operates multi-cuisine restaurant Anuka, micro brewery 7Rivers Brewing Company, JIVA brand of spas and Niu and Nau salons. In July 2019, it announced the relaunch of The Chambers- its exclusive business club and also rolled out its delivery service called Qmin.

ITC Hotels too launched its food delivery service, Tiffin Tales by Gourmet Couch, to offer a curated selection of mindfully prepared dishes. Chalet Hotels is focusing on working with the operators to create a compelling F&B offering at all their outlets as well as through food deliveries via channels like Marriott on Wheels, Swiggy and Zomato.

According to the company's Q4 conference call, it is focusing on scaling up under the umbrella brand of expressions.

"So Qmin is today operational at 14 cities. Chambers has 2000 members and we want to take it to 4,000 members because we are also adding and increasing the size of Chambers. 7Rivers has had a very successful launch and we've been able to – in a span of few months, been able to do a revenue of 4.5 crores. And we plan to scale this up as we mentioned before to 10 to 15 microbreweries over the next five years. Jiva as a spa business has today 70 plus spas. A new one now is now in three locations," said Puneet Chhatwal, Chief Executive Officer, IHCL.

Achin Khanna, MRICS Managing Partner, Strategic Advisory, Hospitality Consulting firm Hotelivate in its 2021 report titled Indian Hospitality The Stats and & Pulse Report Fy2021 said, "We do expect the ADR (Average Daily Rate) recovery to take longer than the occupancy bounce-back and the overall erosion in room rates across urban markets shall remain a challenge for the next 24 to 36 months".

This is likely to bring more focus on boosting non-room revenues for hoteliers and food and beverage, which constitutes roughly 25-30% of a hotel's revenue, will constitute a large proportion of it followed by salon and spas.