Hospitality sector gains on rising MICE events
HYDERABAD: The Indian hospitality industry rode impressive growth rates over the last couple of years on the back of increasing number of meetings, incentives, conferences and exhibitions (MICE) across several Indian cities.
Industry experts and analysts attribute increasing MICE events, including investor summits, to an improved economic sentiment amidst growing competition among states to score better ratings in ease of doing business and attract investments. These have directly boosted average room occupancies and returns.
For example, Hyderabad International Convention Centre (HICC), India's largest convention centre managed by AccorHotels, had hosted more than 800 events in 2016, averaging more than 2 parallel events daily. its highest in a decade.
"MICE contribution to our revenues improved by over 14 per cent in 2016 largely on the back of increasing number of government events and weddings," said Arif Patel, vice-president (sales, marketing, distribution & loyalty), AccorHotels India.
Novotel Ahmedabad, part of AccorHotels, saw its average room rates shooting up to Rs 22,000 as against the Rs 10,000-12,000 during winters, thanks to Vibrant Gujarat Summit held in January. 2016 saw many investor summits organised by states like Madhya Pradesh and Odisha along with Incredible India Investors' Summit.This year, January saw Gujarat, West Bengal and Andhra Pradesh organising their largest investor summits.
"While an investor summit is generally a 2-3 day event, several senior executives start trickling into the city from a week ahead the event which shoots up the occupancies," said Achin Khanna, MD, consulting and valuation practice at global hospitality services consultancy HVS South Asia.
Amid volatile global economic environment, India is one of the better performing economies, largely on relatively strong investor sentiment, domestic absorption and falling oil prices, says HVS.
While occupancies shoot up to 85-90 per cent during such events as against the 60-65 per cent on regular days, average room rates improved from Rs 7,500-Rs 5,000 per night.
"We saw an improvement of 5-6 per cent in ARRs on a monthly basis propelled by events of just 4-5 days that also significantly boosted our food and beverage revenues," said Patel of AccorHotels.
Many large corporates are now looking at building large and medium convention centres across the country. Mukesh Ambani's Reliance Industries is constructing a nearly 7 million sq ft exhibition-cum-convention centre at Bandra-Kurla Complex (BKC) in Mumbai.
This facility, which also houses residential and retail complexes, is expected to be operational by the end of 2017.
"These developments have mainly come on the back of an improved economic scenario and the growing competition among the states to attract investments through the smart cities initiative," said Khanna of HVS.
Industry experts and analysts attribute increasing MICE events, including investor summits, to an improved economic sentiment amidst growing competition among states to score better ratings in ease of doing business and attract investments. These have directly boosted average room occupancies and returns.
For example, Hyderabad International Convention Centre (HICC), India's largest convention centre managed by AccorHotels, had hosted more than 800 events in 2016, averaging more than 2 parallel events daily. its highest in a decade.
"MICE contribution to our revenues improved by over 14 per cent in 2016 largely on the back of increasing number of government events and weddings," said Arif Patel, vice-president (sales, marketing, distribution & loyalty), AccorHotels India.
Novotel Ahmedabad, part of AccorHotels, saw its average room rates shooting up to Rs 22,000 as against the Rs 10,000-12,000 during winters, thanks to Vibrant Gujarat Summit held in January. 2016 saw many investor summits organised by states like Madhya Pradesh and Odisha along with Incredible India Investors' Summit.This year, January saw Gujarat, West Bengal and Andhra Pradesh organising their largest investor summits.
"While an investor summit is generally a 2-3 day event, several senior executives start trickling into the city from a week ahead the event which shoots up the occupancies," said Achin Khanna, MD, consulting and valuation practice at global hospitality services consultancy HVS South Asia.
Amid volatile global economic environment, India is one of the better performing economies, largely on relatively strong investor sentiment, domestic absorption and falling oil prices, says HVS.
While occupancies shoot up to 85-90 per cent during such events as against the 60-65 per cent on regular days, average room rates improved from Rs 7,500-Rs 5,000 per night.
"We saw an improvement of 5-6 per cent in ARRs on a monthly basis propelled by events of just 4-5 days that also significantly boosted our food and beverage revenues," said Patel of AccorHotels.
Many large corporates are now looking at building large and medium convention centres across the country. Mukesh Ambani's Reliance Industries is constructing a nearly 7 million sq ft exhibition-cum-convention centre at Bandra-Kurla Complex (BKC) in Mumbai.
This facility, which also houses residential and retail complexes, is expected to be operational by the end of 2017.
"These developments have mainly come on the back of an improved economic scenario and the growing competition among the states to attract investments through the smart cities initiative," said Khanna of HVS.
