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An avalanche in last minute business travellers

January 23, 2017

Eco(1), Environment(23), Hospitality(15), Hotels(12), India(72),

There’s a lot to be said for being in the right place at the right time; especially if the findings of the influential OYO’s 2016 Hospitality Survey are even broadly correct, because most business travellers on the subcontinent book their hotel accommodation on impulse with little or no forward planning: “last minute decision” being the top reason for bookings according to the survey with a surprising 61% of those polled saying they had made their booking within 24 hours of checking in. It is hard to plan for impulsiveness on that scale; you just have to be in the right place at the right time.

But that’s obviously not the whole story, because the OYO Survey also comes up with the utterly unsurprising finding that despite this avalanche of last-minute bookings, business travellers’ expectations in terms of service delivery, facilities and all round experience are still broadly non-negotiable: Wi-Fi, Breakfast and Eco-Environment are the three biggest priorities for guests.  And with the current deficit in available hotel rooms across the subcontinent (something which we have previously had cause to comment on), this is surely the single biggest factor which will drive future trends in the sector.

Investment in high quality, reliable hotel stock is likely to become more and more important as this stock deficit is made up (as it surely must be) and as more and more suppliers compete for a fundamentally impulsive, last minute customer traffic. Not many business travellers will go back to a bad hotel, no matter how impulsive their original booking decision might have been.

And think about the third of those “non-negotiable” expectations again: Eco Environment. Domestic and international business travellers are increasingly looking for an eco-friendly hotel environment, and that’s something which just can’t be ignored. It might well be extremely difficult to plan for customer footfall which is so impulsive and unplanned, but at least the eco credentials of the hotel can be thought about and planned in advance.  We may well be coming close to the time when, no matter how good the hotel might otherwise be, a low eco-friendly rating will become another reason not to book a return stay.

The OYO Survey said nothing about the value business travellers place on background music as part of a hotel’s all round service experience, but no doubt that can matter too so it was interesting to hear about a decision of the Delhi High Court  made on 23rd December (don’t lawyers have homes to go to at Christmas?). The Court issued an injunction against three Music Licensing Bodies (PPL, IPRS and Novex) preventing them from charging royalties on the music which is played in public areas of hotels throughout India, and whilst not in the overall scheme of things an enormous amount in themselves these royalty fees can add up to be a significant expense across a chain’s operations.

The Event and Entertainment Management Association of India (EEMA) has been waging what it described to the Court in Delhi as “a long, slow but constant legal battle” against the “exploitation by the registered copyright societies who charge royalties for music played”; very little of these royalties, it seems, find their way to the performing artists and EEMA persuaded the Court that the individual music licensing bodies had become nothing more than “an organised syndicate”.

With its dark suggestion of Cosa Nostra, that might be overstating matters a little and who knows whether the injunction will survive a further challenge from the affected bodies, but it is certainly an expense saved; something perhaps to be added to next quarter’s planning budget to capture that transient tide of last minute bookings?

Red Ribbon CEO, Suchit Punnose said:

I think we have all long suspected that the key booking decision was more often a matter of impulse than long-term planning, but this latest Survey result bears that out in the most striking way imaginable. As the article says, all the evidence points now to an increasingly impulsive and transient customer footfall, but to my mind this only highlights still further the need to deal in the most concerted manner with what the survey calls “non-negotiable expectations”; in particular the eco-credentials of the hotel and the customer environment because we can plan for those.

That is why I am very confident that the hotels and hospitality facilities that we are involved in here at Red Ribbon will not only continue to capture footfall but return bookings as well! This survey supports our view that hotel brands can add value by reducing the environmental impact of hospitality and by reinforcing local economies and can achieve this without compromising the quality of service.

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