Certain obstacles have cropped up in the Hotel Industry In India, like a big change in the regular demography, hotel room oversupply, untapped potential pocket sin tourism – all turning this market into a competitive one.
The market did get some boost in the form of investments being pushed in, but that was somewhere from 2005 to 2010. Was this enough, and what’s happening now? One thing’s for sure is that the industry at large is headed toward a very big change.
One factor that has remained constant is the funding - private equity, schemes, subsidies – all meant to better hotel construction and tourism. In spite of this, advancement has been unimpressive.
In a nutshell, that big change we’re talking about is the competition created by the shared economy model, experiential hospitality and too many hotel rooms being supplied by names like Oyo, Air BnB and the like.
Building on that last point of oversupply – it comes at a time when overall demand seems to be slowing, and while the average tourist can book a cheap room quickly, big hotels are struggling to keep up with these rock-bottom rates provided by smaller, affordable hotels. Affordablerates per room have attracted new players as well.
In response, established hotels launched new venues inTier I and Tier-II cities. They failed, others are bringing in low yields while most are now up for sale. These ventures had suffered due to overall reduced overnight stays, low occupancy rates and couldn’t float well inside a market that’s price-conscious.
Coming to the next issue is competition, or new competition rather, from innovative offerings that cater to the digitally-conscious. Such as CouchSurfing, Oyo Rooms andAirbnb. They’ve got 3 critical USPs; one is that they have turned the Indian hotel scene into a global playground. The other differentiating point is the way their services have been packaged – focusing heavily on things like location, convenience, and pricing, even allowing the tourist to customize these as per their liking.
That’s just the kind of personalization that that regular hotel can’t deliver on.The third USP is that they appeal to young travelers who are looking for suitable budgets and better access to local, new experiences.