Despite a sense of overall stability, a steady growth in infra and a booming aviation market, Hyderabad had failed to attract big-ticket global events, argued Veer Vijay Singh, Managing Director and CEO, Trance Hotels. The MICE segment was overwhelmingly dependent on the domestic market and HICCs inability to court events befitting its stature had dampened business prospects in the city of Nizams.
The promise of Hyderabad as a global MICE destination was yet far from being realised. HICCs (Hyderabad International Convention Centre) inefficiency in attracting global events and conventions befitting its stature had dimmed business prospects, in the MICE segment, in Hyderabad, the veteran hotelier said. “HICC is not getting the conferences it was built for. It was envisaged with the idea of hosting big-ticket events, bilateral summits, and the likes. None of it is happening,” he said, adding that the venue was mostly hosting lavish wedding functions. He shared that HICCs idea of hosting a hundred days of large events and conferencing, in a year, was not materializing.
“Overall, there is a lot of stability. Infrastructural development in terms of roads and metro has happened, but it is not what we had seen during the times of the erstwhile CM Chandrababu Naidu,” Veer Vijay Singh noted. The middle-class taking to the air route had kept the airlines busy and the quality of life and experiences had grown steadily. He suggested that despite currently being under a caretaker government and imminent political uncertainty, the market sentiment had remained positive. He, however, added that tourism and hospitality were not being promoted “as the olden days.”
He mentioned that the city of Nizams, currently the capital of Telangana and de jure capital of Andhra Pradesh, had failed to attract any major sporting event, like in the past, further hurting the hotel industry. “The city has so many sporting greats. It is so unfortunate that we do not have any major sporting events any more. Events like Afro-Asian Games. Such events are a big draw and attract a lot of attention,” he explained. He pointed out that while the city was home to numerous major global companies, Hyderabad had not courted many corporate conferences.
In the current business environment, as much as 80 per cent of Hyderabad’s MICE market was being fuelled by the domestic numbers and only a meagre 20 per cent or so was contributed by the international segment, he shared with us.
He mentioned that the international inbound into the city had traditionally remained “weak” and the trend had continued unabated. Reflecting on the reason for the city’s not so impressive show in courting international visitations, he reasoned that the image of the country, as a whole, had taken a beating with irresponsible media reports and over-exposure. “While I completely believe in a free and democratic media, they must also understand their duty, failing which creates a negative perception of the country in the minds of travellers,” he asserted. He said that it was unfortunate that he had not seen many single woman travellers coming into the country, and the city, referring to the impact of the media outcry around women safety in India.
There were other concerns. While hotel occupancies had registered an upswing in the city, average room rates had taken a beating. According to Veer Vijay Singh, the rate anomaly was created by five-star hotels, charging a sum barely north of the hundred-dollar mark, forcing hotels in the lower segments to adjust rates accordingly. “It has a cascading effect. It, also, has to do with the fact that five-star and four-star segments have a much stronger inventory,” he detailed.
Aside from dealing with the rate conundrum, hotels in the city were also grappling with an ever-increasing cost of raw material and workforce, he suggested. Making a note of the business coming in from the OTA route, he shared that “a commission of 15-25 per cent” was further squeezing profit margins.
Occupancy rates in the Hyderabad market had hovered around 64-65 per cent in the star category hotels, he told us, mentioning that “it was a nice development.”
Veer Vijay Singh’s own venture Trance Hotels was under a steady but cautious expansion mode. The hotelier confessed that he did not want to bite more than he could chew and was assessing opportunities but “taking it slow.” Interestingly, the company was eying its international debut with three properties in Bhutan. He added that much was in the pipeline but refrained from divulging more details.
The company currently operated three properties – two in Hyderabad and one in Ahmedabad. “Nimba Nature Cure Village by Trance Hotels, Park Continental Hotel by Trance Hotels and Trance Greenfields Resorts and Convention Centre are the three properties currently under our operation. We are doing well in terms of occupancies,” he detailed.
The hotel group had signed three more properties, we were told. A hotel in Lonavala was slated to be launched in a year and a half’s time, while a heritage property near Jaipur, in Jhilai, was also expected to come up soon. The third property was close to the Runn of Kutch, he shared.
On the road ahead for Hyderabad, he noted that the ‘Incredible India 2.0’ campaign had failed to create an adequate buzz in global markets. MoTs numbers on international footfalls had indicated a healthy growth but the development had scantly reflected on pure tourism numbers, he reflected. “There must be a buzz around the city which is sadly missing,” he explained. He advocated a concerted effort, noting that the hotel industry needed to take a lead, with an able support from state and central government, for the city to truly attain its rightful position as a destination for MICE activities.