Hoteliers use downtime to give a facelift to hotels

Ashish Kulshrestha | The Clear Picture

The Indian hospitality industry has been extensively going for renovation of their prime properties across the country to make use of the downtime offered by the Coronavirus pandemic. Companies such as Indian Hotels Company Limited (IHCL), a Tata company, Chalet Hotels and GRT Hotels and Resorts are among the hoteliers who have renovated their prime properties over the last two years.

While Chalet Hotels undertook the lobby renovation of Renaissance Mumbai Convention Centre in January 2021, GRT Hotels & Resorts embarked on an ambitious renovation and expansion of its Radisson Blu GRT property in Chennai in March 2021. IHCL in November 2020 announced the opening of The Connaught, a hotel under its SeleQtions brand, in New Delhi after a thorough renovation.

A renovation project in the hotel industry aims to improve the guest experience, increase resilience, and manage the individual hotel room renovation cost.

Sanjay Sethi, Managing Director, Chalet hotels said in the company’s investor concall transcript, “The lobby renovation at Renaissance Mumbai Convention Centre has been completed and the new lobby has been operational since January 2021. We have had excellent feedback on the renovated lobby. The balance renovation of the hotel will be undertaken over the next few months”.

According to Statista.com, the average occupancy level of the Indian hospitality industry nose dived from 65.4% in FY20 to 33.8% in FY21.

During the week ending 30 May (2021), Mumbai saw the country’s highest occupancy level (43.2%) among STR-defined markets, which was 60% of the comparable week in 2019, said hospitality industry focused data analytics firm STR in a June 2021 press release. It also said that the occupancy levels in Chennai and Gujarat stood at 38.3% and 32.2% respectively during the same time period. STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry.

As occupancies dipped owing to the pandemic-induced pandemic and the subsequent slowdown in business, hoteliers utilised this as an opportunity to undertake renovations which in a regular scenario would have meant blocking off a section of the hotel and losing on business.

In response to an investor query on the Girdhar Sanjeevi, Executive Vice-President and Chief Financial Officer at IHCL said, “ This year (2021) of course, this (hotel in US) banquet opening may not happen because of the renovation of the ballroom there and that's a good position also because banquet, without an adequate level of business, we will lose money. We would not open the banquet so that the cost doesn’t increase so (we) will not do that because of the position that we are taking and the renovations that are happening”.

Internationally as well, hoteliers have been renovating properties across the globe. For instance, Marriott has been undertaking renovations at The Ritz-Carlton, Moscow, The Ritz-Carlton, Grand Cayman and The Ritz-Carlton, Naples, all expected to reveal major renovations in 2022.