Indian Travel and Leisure on a roll. Ipsos Hong Kong

Transcription

1 1 Indian Travel and Leisure on a roll

2 A Quick Overview of India 2 Source: IncredibleIndia!; WTTC; Technopak Analysis

3 A quick overview of the hospitality growth in India Increasing trend of hotels room supply and demand The hotels room supply in India is projected to increase by 29% from 2011 to F 2014F 2013F 2012F India Hotels Occupancy Rate (%) Hotels occupancy rate is expected to increase by 31% in F 2013 F 2014 F 2015 F Source: HVS Whitepaper Report March 2012; Indian Tourism Statistics Report 2010

4 A quick overview of the hospitality growth in India Low room inventory in India compared with the region 4 Average Room Inventory by Region* for 2010/11 Room Inventory in APAC* for 2010/11 India India Beijing Asia Pacific Tokyo Shanghai Global Hong Kong Singapore 0 20,000 40,000 60,000 80, , , ,000 Note: * Include major branded hotel rooms Source: HVS Whitepaper Report March 2012; Indian Tourism Statistics Report 2010

5 5 A quick overview of the hospitality growth in India MIDSCALE is poised for the strongest growth

6 6 With nearly 740 million domestic trips happening primarily in the business and MICE segment, there is an enormous opportunity for the mid- scale brand. Source: The Hindu Business Line

7 7 Another aspect is that the average number of days spent on business travel in India is about 27 days. And no one brand owns this space. Source: The Hindu Business Line

8 Business travelers usually stay in different hotels depending on the locations rather than travelling by brand but branded hotels are trying to change that: 8 Plans 75 hotels in 3 years (from 15 today to 90 in 2015) Plans to open 47 hotels by 2016 The goal is to operate 150 hotels by 2020 >80% will be under the Holiday Inn/ Holiday Inn Express UK- based budget hotel chain Have a plan to set up 90 hotels in India Increase its presence with 25 hotels in India by 2016 under Double Tree 34 hotels in 2012 with 24 hotels in the pipeline With 8 out of 9 Starwood brands flying their flag in India Source: IndiaTimes, HotelNewsNow.com, The Hindu Business Line

9 Most major hospitality brands are targeting at Tier II and Tier III cities such as Jaipur, Pune and Ahmedabad, etc. in midscale segment. 9 Existing Room Supply across Major Indian Cities 2011/12 25,000 21,729 20,000 15,000 12,052 10,697 10,000 5,000-7,713 5,672 4,904 4,797 3,858 3,782 3,054 1,975 1,787 1, Source: HVS Research

10 10 With so much development on a roll in India and the huge potential and growth in the next 5 the industry managing expectations and connecting with them?

11 Indian culture is all about hospitality- we expect high standards of service, attention & customization 11 Male, Leisure Traveler, Delhi/ Bangalore

12 12 Strong hospitality culture atithi satkar, accommodation options regardless of tariffs. Prevalence of domestic help in higher SEC (SEC B+) & many are used to being served, especially males.

13 The current level of satisfaction with HOTELS in general in India is = 84% (Range: 79% - 95%) 15 Satisfaction Level of Customer Service Hotels 84% Industry in India Automotive 72% Mobile Network Providers 71% Retail Banking 74% Airline 77% 92% 90% 88% 86% 84% 82% 80% 91% Level of Satisfaction with Hotels by Country 89% 87% 84% Philippines Singapore Japan India This is a high level of satisfaction relative to other industries. However, much lower than that in other countries. There is still room of improvement in service level of hospitality in India. Source: Ipsos KMS 2011; Marspvt.net; Marketmatrix.com

14 From our social listening tools, we learn 16 From 5-Star Hotels Expectation Attentive Staff Current Experience $ Fresh Breakfast Price of Internet Accommodation Many Facilities Quick Check- in Room Quality

15 From our social listening tools, we learn 17 From 4-Star Hotels Expectation Attentive Staff Current Experience $ Food Selection Price of Internet Clean Room Bathroom Warm Greeting Expensive Food $

16 From our social listening tools, we learn 18 From 3-Star Hotels Expectation Helpful Staff Current Experience Breakfast 24- hr Room Service Bathroom Accommodation Hidden Charges $ Noisy

17 19 With lots of room for improvement and challenging environment, WE REALLY NEED TO UNDESTAND WHAT IS IMPORTANT! To do this, we have the IDEAL CUSTOMER EXPERIENCE (ICE)

18 Ideal Customer Experience (ICE) is one of our key tools 20 Simplified Version of ICE Map Customer Touch Point Lobby Reception Sleep/ Work Breakfast Check- out Staff Bring bags to room Deliver Room Service Deliver Food Billing

19 Another area of growth that we observed is the rise of the 21 India has an average of 2.8 loyalty cards, avid shoppers have 4-5 (well below US average of 18 memberships per household) 42% of Indians have participated in loyalty program program in future

20 22 Banks Airlines Retails Automobile Oil Loyalty Program Name Freedom Rewardz Jet Privilege Payback AutoCard Petro Bonus fuel card programme Company State Bank Group Jet Airways Airlines Food Bazaar Maruti Suzuki BPCL +100 million members 2 million members 12 million members 2 million members

21 Brands & Loyalty Programme All hotels have loyalty programme for rewarding and retaining their customers. Except for Shangri La Hotels, loyalty programmes are also available for corporate functions. Between the personal and professional loyalty programmes, only Hyatt and Marriot are not offering points swapping. Hotel Group Loyalty Programme Loyalty Programme for Business Use Priority Club Meeting Rewards Gold Passport Planner Rewards Starwood Preferred Planner Hilton Hhonors Event Bonus Programme A Club Meeting Planner Marriott Rewards Programme points swap 23 N/A NIL N/A NIL Executive Travel Value Plan (ETVP) N/A

22 Hotel Coverage 24 4,100 hotels in countries. Marriott and Hilton have more than 3,000 hotels across the world. Indian brands - Taj Hotels Resorts and Palaces and ITC Hotels have about 90 hotels in the world. Shangri- la has the smallest amount of hotels globally with around 70. Number of Hotels worldwide Number of Countries covered Hotel Loyalty Programme

23 Hotel Brands 25 Variety of hotel brands serves different needs of event scales and types. Marriott and Accor are leading the way of providing a wide spectrum of hotels and have 15 hotel brands across the world. IHG owns only 7 hotel brands to fulfill different segments and needs of customers, however, the brand identities are well differentiated to serve various purposes. Hotel Group

24 Number of Members 26 - known loyalty programme worldwide. As a first runner- up, Starwood has 41 million members, a considerable gap compared to IHG which has 52 millions. Hotels in India TAJ and ITC Hotels have the smallest pool of customers participating in the loyalty programme. There is much room to explore in this aspect Hotel Loyalty Programme

25 27 intensity relationships with the customers

26 Building from a functional base to an emotional connection 28 Emotional Connection Become indispensable Create excitement Engender pride Build trust Functional Base Create uniqueness Deliver with clarity Deliver with ease Provide fulfilment of needs

27 How to create high intensity relationships Be Different! Design Sensory, Excellence, Innovation 2. Be Consistent! Consistency 3. Make the Product the Hero of Your Brand! Authenticity, Storytelling 4. Show that You Care! Care

28 1. Be different - Design 30

29 1. Be different - Sensory Excellence 31 Smell Hearing Vision Touch Taste 31

30 1. Be different - Innovation 32

31 2. Be consistent 33 Environment / ambiance People Spoken word Written word

32 2. Be consistent 34

33 3. Make the product the hero - Authenticity 35 35

34 3. Make the product the hero - Storytelling 36 It is two centuries now that moleskin has been the legendary notebook of European artists and intellectuals, from Van Gogh to Henri Matisse to Ernest Hemingway again pass from one pocket to another to continue the adventure blank pages are ready to tell the story

35 4. Show that you Care 37

36 The platforms working together 38

37 39 The Challenges 1. modes 2. Make sure your product experience is unique 3. Deliver it consistently 4. Make the product your hero 5. Evaluate the heartbreakers

38 Have some fun! 40 connecting with your targeted customers in India & Whatever you DO, do it BETTER!

39 41 APPENDIX

40 Travel Habits 42 Business- Domestic Leisure-Domestic Business- International Leisure- International Brands Stayed and Rates paid (USD) for that brand Maharani Palace: USD Galaxy:USD160 Odeon:USD 120 Best Western: USD Ginger: USD Supreme:USD 170 Keys: USD Monarch: USD 130 Centaur:USD 160 Regent palace: USD 150 Clarks: USD 170 Ginger: USD Manali Inn:USD150 Country Club: USD 125 Country Inn: USD Aegis: USD Park In: USD Park Plaza: USD Royal: USD Kodai International: USD 170 Iron horse, Wokingham Garden Hotel, Holiday Inn Express, Ramada International, Fairmont USD Furama River Front, Regent Malin, Albert, Grand Hotel, Raphael Hotel Paris, The President, Park Street, Dynasty, Raffle hotel Dubai, Fairmont, Holiday Inn, Holiday Inn Express USD Grand suite: USD 170 Castle: USD 165 Countries/ places visited Mumbai, Delhi, Jaipur, Bangalore, Chennai, Hyderabad Goa, Mussourie, Manali, Nainital, Kashmir, Shirdi, Hyderabad, Ooty, Katra (Jammu), Kodaikanal Singapore, Dubai Singapore, Dubai, Hongkong, Mauritius

41 Travelers' Choice Drivers 43 More Important Less Important Business Travelers Location Safety cued by location, property, security arrangements (women) Brand name (women) Cleanliness Prompt room service, warm staff Wi fi and business centre Space for business talks Bell boys/attendants Tariff Complimentary breakfast (expected) Leisure City Travelers Prompt, warm, friendly service Restaurant and food services Cleanliness Other recreational activities like swimming pool, games Good ambience Location Safety cued by location, property, security arrangements Prompt room service, warm staff Bell boys/attendants (taken for granted) Leisure Resort Travelers Location Good ambience Full service restaurant Brand name seen to imply well known & therefore trustworthy & safe - important for females while for males it did not emerge as the key driver of choice Safety emerged as a bigger concern among females, especially travelling alone on business

42 Verbatims from consumers 44 Business Leisure (City) Leisure (Resort) peers(delhi) The stay experience reflects the hotels performance on needs to be large (Del, Mum, Jaipur) clean bed linen, towels, curtains, washrooms First aid facility- may be a 24 hour medical shop- (Bangalore males/ Delhi Females) places, in the lap of nature, close to shopping malls & restaurants (females) Play area for kids, gaming

43 Market and Consumer Understanding High expectations in terms of facilities and services 45

44 Market and Consumer Understanding Loyalty programmes more meaningful for business travels than for leisure trips 46 Loyalty programmes not seen as very important, as consumers experiment with different hotels depending on travel destination (especially on leisure) Perceived to be more meaningful in case of business travel ( especially for self- owned businesses) as it implies a better deal Awareness LOYALTY PROGRAMMES: Membership Taj Inner Circle Hyatt Gold Passport Shangrila Best Western Rewards Taj Inner Circle Hyatt Gold Passport Shangrila Best Western Reward Marriot Rewards Priority Club Rewards Choice Privilege

45 Hotel Partners 47 Giving a holistic enjoyable journey to customers is the key role of hotel partners. Therefore, most hotels are having partner ships with airlines and retails such as, car rental, cruise, restaurants, etc. to benefit members. Airline partners offer mileage conversion while merchandise partners offer discount or rental/services/free meals with points exchange. Hilton and IHG have the largest group of business partners with around 50 airlines and 13 retails, which could give great convenience, flexibility and alternatives for members to maximize the points usage. Number of Airline Partners Number of Merchandise Partners Hotel Loyalty Programme

46 Who are our customers? - Traits and Faces of Target Consumer Across Markets 48 Potential for the mid scale hotels to appeal to travelers of the following traits 1. Status conscious (Delhi), strivers, pragmatic and sociable (great hosts!) 2. Value conscious are always on the look out for the best bargain 3. Ordinary people working hard to strike a balance in their materialistic and emotional pursuits 4. Attitude towards travel: Discerning, service conscious traveler Wants to be treated as special 5. Attitude towards budget: Value seeking, Budget Conscious 6. Travel type: Business City leisure, Resort leisure 7. Demographic Profile Skew males, Skew younger travelers (less than 35 years old) Self employed- owning small business rather than corporate 8. Corporate View: Seen for business and corporate travelers

47 49