Any time of year, you can find it here... that’s the new hospitality buzz in town
With six weeks to go for her to tie the knot, Jhumpa Bhattacharya is at her wit’s end. She has found a suitable boy for herself, the right mix of peach, lavender and fuchsia for the wardrobe, that perfect tune for the bridal waltz and the perfect destination for the honeymoon. So, what’s she in a tizzy about' What Jhumpa hadn’t factored into her wedding planner was the complete lack of accommodation options for relatives coming into chock-a-block Calcutta in the first week of January. Every hotel or club she called had just two words of regret to offer: “Sorry Ma’am”.
The 27-year-old bride in a bind is not the first — and definitely not the last — to be left in the lurch by the “winter rush” phenomenon in the city’s star hotels. It’s common knowledge now that rooms are rare in peak season in this metro of new momentum, but given the way this year has gone in the hospitality industry, is there really an off season at all'
“There is no lean season in the five-star hotel industry in Calcutta anymore,” declares Ranvir Bhandari, area manager (east) & general manager, ITC Sonar Bangla Sheraton & Towers. Bhandari feels a crying need for more star rooms in the city, predicting an addition of 1,000-1,200 rooms in the next four years and another 1,200-1,500 in the four years thereafter.
This seems to reflect a “sense of arrival” and the buoyancy of an industry that is fast approaching the light at the end of the tunnel. There was a time when a 30 per cent occupancy at The Oberoi Grand with its 200-odd rooms would mean hospitality in Calcutta was doing “very well”. The index has surged and even the 1,000-plus five-star rooms in the city at present aren’t enough to meet the flourishing demand.
While all existing star players are either pondering expansion within present precincts or eyeing a second property, the city is also gearing up to welcome at least six new hotels with international brands in the next three to four years. “Calcutta will have six to eight new five-star luxury hotels, most of them to become operational within 2009-2010. This is an indicator that the economy is on the fast track,” observes Abhijit Das, regional director of property consultants Trammell Crow Meghraj.
Their stars, our space
Shristi Infrastructure Development Corporation Ltd has announced a “250-to-300 room” five-star hotel in New Town, Rajarhat, in partnership with the InterContinental Hotels Group (IHG), expected to be ready to receive guests from 2008. “Our objective is to create a truly world-class hotel complex, which would buoy the image of the city,” says Hemant Kanoria, director, Shristi Infrastructure.
Outstation real estate giants have now caught the Calcutta drift. Emaar-MGF Land Pvt Ltd made the biggest splash by quoting a never-before price of Rs 213 crore for a 6.24-acre plot on the EM Bypass near ITC Sonar Bangla to build a luxury hotel. “Our commitment to Calcutta is strong and our hotel will introduce a novel concept in the hospitality sector,” promises Shravan Gupta, executive vice-chairman & managing director of Emaar-MGF.
Two other upcountry majors, Unitech and DLF, are bringing in big-ticket international hospitality partners. Bengal Unitech Universal’s tie-up with the Marriott Group will create a 250-room Marriott Courtyard inside its IT park Infospace in Rajarhat. The five-star property is slated to be ready by October 2008. Bengal Unitech Universal (Unitech plus NRI Prasoon Mukherjee’s Universal Success Group) will do another five-star hotel, a four-star property and service apartments inside its 100-acre convention centre, also in Rajarhat. DLF is, apparently, planning its Bypass hotel with the Hilton Group.
Demand and supply
Taljinder Singh, general manager, Taj Bengal, while agreeing there won’t be a shortfall of business for star hotels in the short term, warns of oversupply in the Rajarhat belt. “I don’t think with all these brands coming in, it’ll be easy for hotels to hit large-scale profitability immediately. Besides, the IT boom may not be in sync with the ground reality.”
Harsh Neotia, managing director of Bengal-Ambuja, shares Singh’s apprehension of an overbuilt capacity in the New Town spine. “True, there’s a lot of optimism in the air, but I think there’ll be an initial tough period in Rajarhat. And the three factors of cost, service and location will be the key.” Bengal-Ambuja is developing a three/four-star hotel atop City Centre II in Rajarhat. The 140 to 150-room hotel coming up next to its Ujjwala condo complex, is expected to be ready by mid-2008.
In this rat race for rooms, a sobering note is sounded by Amitabh Rai, general manager of The Oberoi Grand, who doesn’t see any real boom happening before 2010. Rai feels another 150 rooms should be enough to sustain the demand in the next two years, even though the group is looking towards the Bypass/Rajarhat corridor for a second property.
“We still lag way behind even Delhi, forget Bangalore, and business in Calcutta is still pretty much winter-driven. In summer, Calcutta’s average occupancy would be 65-70 per cent, as opposed to 85 per cent for Delhi. Again, Calcutta’s ARR (average room rent) was Rs 5,500 in the current financial year, against Rs 12,000 for Delhi,” points out Rai.
But the bullet has already been fired after exhaustive feasibility studies and the industry is on the fast track, counters Bhandari, whose Bypass hospitality address boasts an “average length of stay of 3.6 days against the industry standard of 2.3 days”. No wonder it is planning to expand capacity.
“Of course, as a primary prerequisite, infrastructure must keep pace, since we don’t want to become another Bangalore. While Singapore and Bangkok are still regarded as benchmarks in terms of best practices in the hospitality industry, in another eight years, Calcutta can become a centre like that because supply creates demand,” feels Bhandari.
Taj’s Singh sees opportunity in the three-star, three-star plus or budget segment. “The city clearly lacks good-quality branded hotels in the second and third rungs. We have Ginger in that segment, where the room must be priced around Rs 1,000,” he observes. The budget boom is seconded by Trammell Crow Meghraj. “We need to add a significant number of rooms in the three-star category and the organised budget category, since this segment will witness high demand soon,” says Das.
Gung-ho and gap
Glut-gloom or gung-ho on guests' A glance at the room-rollout roadmap throws up more crests than troughs. The Oberoi Grand itself plans to reopen its Chowringhee Wing, non-operational for over a decade, with 24 “exclusive” suites. Hyatt Regency, Calcutta, which brought in the first international brand, is confident supply will create demand. “The city needs more hotel rooms and conference facilities...The future for our industry and Calcutta is looking good,” smiles general manager Timothy Bruce.
The restoration of Great Eastern by The Bharat Group of Hotels through a collaboration between Architects 61 of Singapore, involved in the restoration of the Raffles and Fullerton Hotels of the island nation, and Dulal Mukherjee & Associates is another beacon of buoyancy. The re-commissioned Grand Great Eastern hotel will have 244 rooms.
Even Lady Ranu Mukherjee’s residence on Camac Street is being converted into a hotel, say realty sources.
The only gap between promise and delivery could be the software. “All the three Ps — people, product and processes — would determine survival and growth, but people would be the key. Since there’s a perennial shortage of trained manpower in this industry, it’s important for the leading hotels to take the initiative and roll out training programmes to feed the boom,” stresses Bhandari.