From signature bath amenities to customized picnics, hospitality brands eye alternate revenue streams

The hospitality sector, among the hardest hit during the pandemic, is inching its way to recovery on the back of non-core businesses such as homestays, gourmet home delivery, laundry services and even ‘picnics’. “The quarterly growth in RevPAR (revenue per available room) of Q3 FY22 (October-December) over Q2 was about 40%,” says Jaideep Dang, MD, hotels and hospitality group, South Asia, JLL.

The hospitality segment saw substantial recovery in 2021 after the second wave, he adds, as “brand extensions” generate new revenue streams, when RevPAR had dropped considerably. “While several hotels hopped onto food delivery platforms, many sold their signature bath amenities, tableware and bedding through their brand websites and applications,” he says.

As per the Federation of Hotel & Restaurant Associations of India (FHRAI), the Indian hotel industry suffered a blow of over $ 17.81 billion in revenue in FY21, as a result of which hotel chains quickly had to identify new growth routes.

Spreading their wings

Indian Hotels Company (IHCL), that is home to brands Taj Hotels and Ginger, focussed on driving revenues from businesses that were launched in the last couple of years. Qmin, its food delivery brand, is now in 20 cities since its launch in mid-2020 while its homestay brand, amã Stays & Trails, has scaled up to over 75 premium bungalows to cater to the need for safe vacation experiences.

Hospitality chain Leela Palaces, Hotels and Resorts has also expanded its services. “We introduced offerings catering to our guests’ needs, including staycations, family-oriented packages and corporate work-from-hotel offers,” says Anuraag Bhatnagar, COO, The Leela Palaces, Hotels and Resorts. It also unveiled its signature fragrance, Tishya by The Leela, along with a collection of bath amenities curated for its properties. While the new product line can be experienced exclusively at Leela’s hotels, it plans to introduce a retail line soon.

Oberoi Hotels and Resorts, too, launched a ‘work from anywhere’ offering last year, allowing guests to work from its locations. The package includes meals, wifi, meeting room access, laundry, printer and copier use.

Quite a picnic

For Sterling Holiday Resorts, shares Vikram Lalvani, COO, resort operations and customer experience management, Sterling Holidays, the brand diversified its services and introduced the Sterling Subuthi Spas across its properties as well as the Sterling Local Restobar in seven of its resorts.

In terms of revenue, Lalvani says these bring in incremental contributions to the business, with the restobars adding an estimated `6-7 lakh each month per location. With an eye on the summer season, the company has recently launched Sterling Picnics. “This new offering will enable people to enjoy a customized, day-long picnic at our properties even if they are not staying with us. Given that most people have not been able to enjoy summer getaways in the past two years, we expect to see traction, “he says, adding that between April and June this year, he expects revenues to be 25-30% higher than the summer of 2019.

Despite the cost challenges in introducing new businesses, Mandeep S Lamba, president (South Asia), HVS Anarock, says that hospitality brands have seen good traction from these new verticals. He adds that Qmin has recorded a GMV of `58 crore in the first nine months of the current fiscal, while ITC Hotels has seen positive traction from its food delivery (Gourmet Couch) and laundry (Lavanderia) services.

“Having understood the potential of ancillary revenues in growing the topline, hoteliers should now take advantage of the vast untapped potential,” Lamba says.

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