An increased focus on domestic tourism is expected to drive the growth of the midscale segment in India’s lodging industry, as the country further eases domestic travel restrictions, according to a HVS report.
As India enters the fourth stage of the government’s phased reopening, dubbed Unlock 4.0, it is expected that domestic leisure and business travel across the country will gradually recover.
With safety being the key concern among post-pandemic travellers, Indian domestic tourists will pivot to “branded products” as they are perceived to be “safe”, said the report.
At the same time, it added, the ongoing economic headwinds are likely to drive the already value-driven customer seeking a full-service hotel more towards the midscale hotels.
Akash Datta, HVS senior vice president – consulting and valuation, and Dipti Mohan, senior manager – research with HVS South Asia, expect that a growing number of experiential travel-seekers will flock to fledgling leisure destinations in the country, where developing and managing a midscale hotel offers better value proposition.
The growth of this segment will also be fuelled by the rising demand from business travellers, driven by companies’ need to cut costs. Development of industrial corridors in the country has also resulted in increased captive demand for quality midscale hotels around highways, said the report.
Though supply growth is expected to be slower across segments in the current scenario, mid-market hotels will still be a more viable proposition as they require lower investments and can be developed on smaller land parcels, which has often been the limitation in the country for development of large format hotels.
Additionally, midscale hotels, unlike their upscale and luxury counterparts, have a higher ability to offer flexi-pricing and still be profitable due to lower operational costs.
Datta and Mohan said that the learnings from Covid will help future midscale hotels align to a more efficiently built product as contactless needs will lead to smaller public spaces, fewer restaurants and enhanced technology – all of which will help in reducing the capital costs, while increasing revenue generating areas like rooms and providing better returns on investment.
The key deterrents for the growth of this segment have been the high land and construction costs combined with high interest and short loan tenures, which make hotel projects unviable in India, said the report.
To help domestic tourism reach its full potential in India, it added, the government should facilitate the development of midscale hotels by allocating well located, fully zoned land parcels at viable prices or long-term leases.
According to the report, the midscale segment has become the largest sub-segment among the branded hotel supply in India, accounting for approximately 43 per cent of the total supply in the country in 2019.
Singapore-based travel startup Tastech has launched an online booking platform called Atastay featuring a curated collection of luxury hotels across South-east Asia.
Most of the hotels listed on the website have been visited and verified by local senior travel specialists to match luxury travellers with the most unique and localised hotel experiences, according to a press statement.
“There are too many five-star hotels on other online booking platforms. Users who are still looking to plan special holidays such as a honeymoon or that annual family vacation may need to spend quite some time on research (including reading up on numerous hotel reviews) to find the right destination and accommodation,” said Takaya Tomose, founder and CEO of Tastech.
“Atastay carefully curates and conducts these stressful and mundane researches to guarantee that your stay will be special. In fact, during our many site visits in preparation for the launch of Atastay, we have discovered so many unique boutique and well-operated family-friendly hotels in Singapore facing visibly less human traffic during this (Covid) period, and we find it a pity.”
On Tastech’s decision to launch a luxury hotel booking site amid these challenging times, its sales and marketing manager Traven Koo told TTG Asia that the team saw a silver lining of opportunity as the pandemic triggered greater demand for luxury products like private chartered planes and high-end accommodation.
Atastay is a combination of the words ‘atas’, a local slang which means high-class, and ‘stay’. All properties on the platform come with an “Atastay Rating”, which grades hotels on a five-point scale, based on cleanliness, location, service, rooms and facilities. Hotel facilities, in-room amenities, room types, F&B options as well as services are also listed under each property.
Koo said that besides the aforementioned selection criteria, featured hotels have been selected for the uniqueness of the stay experience, such as the hotel layout, quality of room finishing, and views from the room. Atastay’s catalogue will be expanded gradually, and the company will continually refine these selections based on customer feedback and its local surveillance, he added.
Another main feature of Atastay is its rewards programme called Atas Points, where registered users earn points that can be converted into cash rebates to offset future purchases. Koo said that an affiliate programme is also in the pipeline where members will enjoy a wide array of benefits at participating restaurants and brands. As well, Atastay members can unlock monthly exclusive offers which could range from dining experiences and deals on luxury goods to prize draws.
More information is available on www.atastay.com. The site is also available in different languages for Vietnamese, Indonesian and Thailand travellers.