Business Travel News - September 8, 2008 - (Page 18)

LODGING India’s Hotel Demand Spurs Leela Growth Onno Poortier, president of the India-based Leela Palaces, Hotels & Resorts—along with the hotel group’s recently appointed area director for Western India, Indrajeet Banerjee—recently spoke with Business Travel News hotel editor Michael B. Baker about growing corporate travel buyer interest in the group’s hotels, the strength of the Indian travel market and the goal to develop a pan-Indian hotel presence in the next four years. BTN: Does India continue to be a booming business travel market? Indrajeet Banerjee: We have massive growth in terms of international travel. Recently the world tourism board recognized India as the number-one country in terms of prospects of growth in tourists as well as business travel. The United States is one of the largest feeder ONE-ON-ONE countries to India. The boom started from Silicon Valley into the southern part of India, Bangalore. We don’t see that upswing anymore. The boom has stabilized. A lot of the Silicon Valley business has moved into neighboring states, and some has moved to Western India, areas like Pune. From a sales and marketing view, the top 15 global accounts of the United States require for the Indian market more than 100,000 room nights a year. The U.S. market is that big. Tourist business revenue in India is $100 billion. By 2018, it’s expected to be $373 billion. BTN: What sort of growth have you seen in terms of corporate travel agreements in the past few years? Banerjee: Our business out of request-for-proposals contracts we have seen for the group just in the past year has grown over 300 per- cent. Three years back, if you look at the group, it possibly had 15 RFPs. Today, the group had more than 200. Onno Poortier: We get high-level executives. At Bangalore, we had Bill Gates, for example. Those people are staying in the hotel because of the industry there. IBM has about 80,000 room nights for our hotel in Bangalore. There are a lot of things happening in that part of the world. BTN: What has spurred growth? Banerjee: Our relationship with the businesses is helping us a lot in recognition of Leela as a brand. We’ve spread our wings with most of the global consortia of the United States and all the big agencies, like Carlson Wagonlit and HRG. We are working extensively with the global distribution service providers throughout the world, doing special ad campaigns. Overall, India is on a ONNO POORTIER, PRESIDENT OF LEELA PALACES, HOTELS AND RESORTS great upswing, and most of the international brands are looking at building there because of world tourism prospects. Poortier: For Asia, it is quite new to have these sorts of corporate agreements. We also have a contract Continued on page 20 HRG Hotel Survey Shows U.S. Rates Leveling, Elsewhere Strong BY MICHAEL B. BAKER Hotel rates for corporate travelers leveled off in North America for the first half of 2008, while other regions—particularly Eastern Europe and Asia/Pacific—continued to show strong rate hikes, according to six-month hotel surveys recently released by HRG. The surveys, based on industry intelligence and actual room nights booked and rates paid by HRG clients in the United Kingdom during the first half of the year, showed double-digit percentage increases in a number of U.S. markets, including Atlanta, Boston and Dallas. Overall, however, North America has been the first region to see rates begin to level off, and HRG said to expect larger decreases in the second half of 2008, as hotels increasingly begin to open up corporate rate availability. While New York remained the most expensive North American city, with an average rate of $358.98 per night, it remained stable compared with the same period in 2007. Rates also were flat in Los Angeles and even went down in Houston and San Francisco, according to the reports. In Canada, rates were up by 12 percent in Vancouver and by 23 percent in Calgary, which HRG attributed to lack of supply in the face of high demand from the oil sector. New York’s stability also reflected a shake-up in terms of the most expensive cities worldwide, HRG reported. While it remained in the top 10 overall, it dropped to eighth place, compared with second place in 2007, and it was the only North American city to appear on the list. HOTEL RATE CHANGE, FIRST HALF OF 2008 COMPARED WITH 2007 Calgary Vancouver Atlanta Boston Dallas Los Angeles New York San Francisco Houston -2% -3% -5 0 5 10 15 20 25 23% 12% 11% 10% 10% 0% 0% Source: HRG “We are increasingly seeing rates level off in certain markets as they adjust pricing structures to meet market expectations,” according to Margaret Bowler, HRG’s director of global hotel re- lations. “This has been noted in London, where rate growth slowed significantly in the second quarter, and in New York, where growth dropped from 6 percent to zero. In this instance, we expect to see a shift in pricing strategies as hotels streamline corporate packages and increasingly strip out extras with less hotels upselling executive rooms, corporate packages or in-room bar pricing deals to make rates appear more attractive.” Regionally, Eastern Europe, with rates up by 22 percent, and Asia/Pacific, with rates up 20 percent, saw the largest year-over-year growth. HRG saw the rates largely stemming from lack of supply and developer focus on the luxury market. Moscow remained the most expensive city globally, according to HRG. Average rates increased by 25 percent from 2007. Mumbai was second, with rates up 37 percent from 2007. It also was the second-highest increase of any city, topped only by Berlin, which saw rates soar by 39 percent in the first half of 2008. Most cities, however, saw much higher growth in the first than the second quarter. One exception was Johannesburg, South Africa, which saw rates increase by 26 percent in the first quarter and by 23 percent in the second. “There’s huge growth there,” Bowler said. “It’s lack of supply. Rates have doubled in the last couple of years.” ■ mbaker@btnonline.com ■ 18 Monday, September 8, 2008 www.BTNonline.com Business Travel News http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - September 8, 2008

Business Travel News - September 8, 2008
Contents
Inside Track
Profiles In Travel Management
BTN Research
Aviation
Meetings Today
Lodging
Asia/Pacific
Washington Wire

Business Travel News - September 8, 2008