The increase in living standards and disposable income in India has boosted bleisure and experiential travel, and the leisure segment is poised to take full advantage and eat away at the traditional three-day meeting.
REPORT FROM INDIA—“Bleisure” travel finally has reached India.
Even in this nation of superlatives in terms of architecture, cuisine, landscape and wildlife, experiential travel also is on the rise. Indian hoteliers are quickly adapting to this movement in extended weekend getaways, sources said.
“Research shows that business travelers who spend between 3,000 Indian rupees ($42) to 5,000 rupees ($70) are willing to spend 15% to 20% more to enjoy an extended weekend and extended holidays,” said Rattan Keswani, deputy managing director of Lemon Tree Hotels and director of Carnation Hotels. “Hospitality majors are sharpening their focus on the growing leisure segment and looking to add resorts to their portfolio.”
Sanaya Jijina, senior associate of strategic advisory at business advisory Hotelivate, said established, branded hotels in leisure locations in India have been able to drive higher average daily rates in comparison to their urban counterparts.
“The leisure segment in India is growing. … While these markets have traditionally been seasonal in nature, this trend has been changing over the last few years,” Jijina said. “Typical leisure locations across India have witnessed significant growth.”
Jijina added that leisure markets such as Bekal, Goa, Kovalam, Manali, Ranthambore, Udaipur and Varkala have done well.
“We have done several feasibility studies across leisure locations in India and find this segment to be extremely lucrative for investment,” Jijina said.
Rajat Gupta, director of national sales for India, Bangladesh and Sri Lanka at Best Western Hotels & Resorts, said he has calculated the leisure market to comprise approximately 35% of all demand in India.
“In the leisure category, the split between domestic travelers and corporate is almost equal,” he said. “The corporate and (meetings, incentives, conventions and expositions) sector is seeing growth. Many (corporate groups) are holding their conferences in destinations. Earlier if a venue was booked for three days, they used to have meetings and conferences on all the three days. Now the conferences happen for a day, the remaining two days are to sit back and relax.”
Sources said the growth in bleisure business is a result of the increase in the spending power of the upper middle-class segment and its willingness to spend on travel holidays. Short-break holidays also have become extremely popular, whereas before most travel was conducted during school holidays and back to families’ hometowns.
“The easiest option is to plan a quick getaway to a nearby resort,” Keswani said. “We have seen that destinations (that) are within driving distance or a short flight away from major metropolitan centers and tier-1 cities attract leisure customers. It is for this reason that our properties in Manesar, Jaipur, Chandigarh and Dehradun are doing very well. Pricing is driven by the market, the balance of demand and supply in the economy and midscale segments.”
But this increased demand does not mean ADR is going through the roof. New supply throughout India has made pricing much more competitive.
“We are unable to get the kind of room rates that we were getting earlie,” Keswani said. “For example, in Jaipur five years ago we could get 6,000 rupees ($83.98) per night, (but) today it is only 4,500 rupees ($62.99).
He said certain chain scales are thriving more than others.
“The number of rooms has gone up, whether for owned properties or managed ones, (and) the mantra is always location, location and location,” Keswani he said. “If we perceive there is existing demand or reasonable surety of future demand, we look for an opportunity to build, lease or manage. It is important to keep in mind that it is difficult for midscale brands to create a destination. This is the forte of luxury and deluxe hotel brands.”
Goa is one Indian destination that appears to have benefited significantly, Gupta said, although he acknowledged more competition comes from international destinations.
“This year Goa has done phenomenally well; it has become a 365-day destination,” he said. “All properties there have had a good run with good room rates, but with flight costs in the domestic sector going up, it is cheaper to travel overseas. For the New Year, Thailand was the destination for the Indian traveler. With the government giving visas on arrival, Bangkok has been the go-to place.”
Jijina said this increasing focus on leisure hotels has inevitably led to a rise in experiential travel.
“Hotels are offering carefully curated experiences to their guests, which also enables them to charge a certain premium for their services,” she said. “Boutique, unbranded hotels are extremely popular across leisure locations in India.”
Sources said marketing and initiatives in Indian experiential travel are different from those for the average corporate traveler.
“What we have seen is that most travelers just want to sit back and relax, use the spa or gym, eat out, maybe shop or sightsee,” Gupta said. “In some places like Himachal Pradesh, adventure sports (and) treks are done by enthusiasts, for which we tie up with a local operator.”
Keswani said leisure hotels have quickly realized it is important to give clients something unique.
“Our hotel at Tarudhan is pet-friendly, has kids’ activity zones and is adjacent to a golf course, while the one in (Jim Corbett National Park) offers local Kumaoni cuisine, activity areas, a spa and assistance for game-park visits,” he said. “The one in Katra … is near a place of worship, so our kitchens open early, as does the spa, to offer food and relaxation. We also have three properties coming up near Rishikesh, one which will have its own ghat (ceremonial bathing pool). The Tiger experience is marketed around our properties near the national parks.”