Taking 2019 as a base year, luxury hotel brand Leela has increased room rates by almost 18% through 2022, said Anuraag Bhatnagar, chief operating officer of Leela Palaces, Hotels & Resorts, at CNBC-TV18. Another 14% rise is on the cards.
Now is the time to reset rates as COVID-19 has taught us many lessons, said Chief Operating Officer (COO) of The Leela Palaces, Hotels & Resorts Anuraag Bhatnagar.
“When I look at luxury properties and luxury assets, I really believe there’s a lot of room for the value we offer and the quality of assets we have,” he said.
Earlier this week, Managing Director and CEO of Indian Hotels Company Ltd (IHCL) Puneet Chhatwal said the company wanted compare its hotel rates to global levels. “We need to benchmark the rates of trophy assets against those in the West,” he said, adding that to get this kind of quality, location and views, India must have the ability to charge higher rates, and the industry needs to think about it collectively in brotherhood.
Bhatnagar said CNBCTV18.com that relative to the rest of the world, South Asia was subdued in terms of rate positioning and he felt it was time to reset rates now. However, he said it should be kept in mind that the price increase corresponds to the services, the offers and has a value proposition. “We don’t want to be seen as opportunistic, but we want to deliver value,” he said.
Bhatnagar said “Atiti Devo Bhava” is part of the core DNA of Leela Hotels. “Service comes from the soul and we have more leeway to increase our rates,” he said.
Leela Palaces, Hotels & Resorts has 12 properties under its umbrella. Among them, four properties are wholly owned by them, one is a joint venture and seven properties are managed by them.
Average room rates and occupancy rates
Talking about average room rates, Bhatnagar said taking 2019 as the base year, Leela Hotels has increased its rates by nearly 18% through 2022. entire portfolio and we are looking at bringing our growth in 2019 to nearly 31% on average,” he said.
Bhatnagar believed that the services, products and experiences offered by Leela can play on the aspirations of travelers. “To me, it can’t just be an algorithm or a year-over-year exercise to raise rates. I think rates have to be a factor in creating that aspiration and generating that demand so that people aspire to stay, are willing to pay that price because they see the value in the overall supply,” he said.
Currently, Leela Hotels’ offers a range of services such as Tishya, its fragrance program, and Aujasya, its wellness program, among others.
Bhatnagar, who took over as COO just three months before the COVID-19 pandemic hit India, said that for this year the group’s revenue is expected to increase by more than 26% compared to 2019, despite the fact that Omicron ruined the start of 2022.
“And not just rooms and occupancy, we’ve also seen great progress in the food and beverage segment, from footfall to our restaurants to adoption of our banquets as well as our hotels as wedding destinations,” he said.
He added that on the retail side, there has been an increase in staycations and domestic business. “We’ve seen city hotels turn into weekend resorts. So overall, I think the occupation is already back. Rates are higher than in 2019. And we expect this momentum to continue deep into and beyond 2023,” he said.
Currently, Leela has three hotels in the works, which are in various stages of pre-opening. Two of them are in Kerala – The Leela Kovalam and Leela Ashtamudi.
“Right now, we’re going through different stages of improvements and upgrades, just to make sure they’re the true representation of the Leela brand,” he said.
Bhatnagar said they also have a pipeline of hotels they are reviewing right now. “Our strategic intent is yes, we are definitely using capital to expand our growth and our market footprint,” he said.
He said they were considering the Gulf Cooperation Council (GCC) and the Middle East, the Maldives and also central London. “These are preliminary discussions, but over the next 12 to 15 months we should have details,” he said.
International bookings on the rise
Outbound travel is up 6-10% month-on-month in recent months, he said. “About 45% of our direct bookings and websites are now international. It’s a mix of business and leisure, with more of the former,” he said.
He said the United States remained a big market for them, followed by the United Kingdom and the GCC. “So right now we’re seeing a six to eight percent growth rate in business year over year. We have global events that Leela partners with, like the G20 summit towards the end of this year So we’re optimistic that the numbers will really pick up,” he said.
Leela had hired 1,400 associates in 2021 with the launch of three new hotels. It has a three-level recruitment strategy:
Bhatnagar said the company is also focusing on greater diversity and inclusion both at the executive level and at other levels.
(Edited by : Shoma Bhattacharjee)
First post: STI