Implementation of a European Boutique Hotel concept in India

Abstract

[EN] According to the World Tourism Organization (UNWTO, 2015), international tourist arrivals globally increased from 809mn in 2005 to 1,133mn in 2014 clocking a compounded annual growth rate (CAGR) of 3.81%. This was driven mostly by emerging economies which grew at 4.57% compared to the advanced economies which grew slower, at 3.20%. Asia and the Pacific region grew at an astounding 6.14% during the same period, of which India was among the leading countries with a CAGR of 7.76%. Another research conducted by the World Travel & Tourism Council (UNTWO, 2015), reports that the Travel & Tourism industry generated 10% of global Gross Domestic Product (GDP) in 2014. Compared to this, India has hardly 6.7% of its GDP contributed from the Travel & Tourism industry. This shows the under penetration of Travel and Tourism sector in India. The World Bank recently predicted in its “Global Economic Prospects” report (World Bank Group, 2017) that compared with other major emerging economies, India will grow at 7.7% by 2019. That would make it one of the fastest-growing developing-country economies. A booming economy, with rapidly growing international tourist arrivals and an underpenetrated tourism sector makes India a lucrative market for hospitality sector investments. India is currently in the middle of a rapid transition. The economy has opened up to global investors, with various sectors allowing for up to 100% Foreign Direct Investment (including Hotels). However, the hospitality industry is still dominated by unorganized businesses run by inexperienced local entrepreneurs who are not able to cater to the needs of International guests, used to more sophisticated services. Presence of numerous international hotel chains does cater to this segment but it comes at a premium price. International guests have little option when it comes to choosing a hotel. A majority of guests do not choose a 5 Star hotel for luxury services, they do so because the services which they consider basic and not available in a standard Indian hotel. Basic services according to developed countries like hygiene, sanitized washrooms, food quality controls, employee etiquettes, safety standards etc. are rarely followed in a standard Indian hospitality establishment. Therefore, International guests are forced to opt for 5-star accommodation, which not only is expensive but also available in few selected locations. The rapid growth in India is leading to an emerging middle class of young citizens who are wealthier and have higher education. Majority of these young Indians are now used to visit developed countries and have been exposed to much higher quality standards. They also face similar issues like international guests when selecting a hotel in India. This is well reflected in the thousands of reviews mentioned on famous International travel and hotel booking websites. The project will propose implementation of a European Boutique Hotel concept (EBH) in India. This will seek to fill the gap in the market for a high quality hotel without the bells and whistles of a 5 star but at the same time fulfilling the needs of an International guest. These weaknesses in the Indian hospitality sector will shape the strengths of the boutique hotel: • A small establishment with about 50 rooms, far from the concept of a huge building with crowded and noisy environment. It will allow to offer personalized attention to clients, a quieter ambiance and attention to details. • Hygiene as the most important and basic strength. It is the main concern of international and wealthy guests, as most of the hotels do not accomplish the basic international safety standards. It is going to be monitored and controlled step by step with a strict SOP (Standard Operating Procedure) on every employee, not only housekeeping department. • Politeness and control of staff behavior over the guests. In India, behavior of nationals towards foreigners is in some way intimidating, as most of the workers have not been exposed to other nationalities. The higher management will be European and the staff will be trained on customer service according to international standards. • Modernity: In India there is no focus on latest architectural design, so most of the standard hotels do not appreciate decoration as a service to be taken care of. The hotel will be focused on simplicity and practicality however it will also provide a pleasing ambience to guests. • B2C marketing. The hotel will also be focused on social networking and direct client interaction, highly depending on online positioning. The small size of the hotel will enable it to be flexible with respect to changes in guests' preferences.