Shower Thoughts on Indian Hospitality Industry
By: Wadhwani Yash
Tags: Travel, Hotel, Millennials, Hospitality, Real Estate

I have been watching close-quarters how the Indian hospitality industry has been shaping up over the last half-decade. I know this might not be long enough to pass commentary on the subject, but, I suppose there is no time like the present.

Hospitality in India brings a great many institutions to mind. The likes of Taj, Oberoi and ITC have been at the forefront of this industry for a number of years. Then came a wave of international brands like Carlson, Mariott, Hyatt and Hilton with a level of standardization not seen in the industry before. What followed suit was a bunch of homegrown entrepreneurs taking this cookie-cutter approach along with Indian management to create efficient and profitable mid-segment Indian hotels, the likes of Lemon Tree, Royal Orchid and Sarovar to name a few.

Hospitality in India was always thought of as a grand affair on the lines of the Taj Mahal Palace the very embodiment of ‘Tajness’. Splurge, Whisk, Wine and Dine were the verbs associated with hotels. The boomers who could afford these pleasures would rave about it in their social circles. Travel became a status symbol and the so-called marque 5 stars its crowning glory(Taj).

The ones that were not so lucky to be born with silver soon went to mid-segment and upper mid-segment hotels. These were designed in a way to reflect opulence but at a value that was justifiable for the avg joe born towards the fag end of the boomer generation. The focus would invariably be on packing in more stuff than doing it more creatively. The rooms would not be the biggest but, would use so-called premium looking or mimicking the upper/upper-upscale segment interiors albeit in a smaller room.

With the turn of the century, millennials became the single largest demographic segment in India. With our(India’s) avg age in the late twenties as of 2021 millennials have become the decision-makers, chief bread earners and the largest cohort in terms of participation in the workforce. Hence the people with the most amount to spend collectively are millennials. In per capita terms it might still be Boomers, but millennials are by far the biggest segment in terms of volume.

Millennials as a generation have been focusing on things over experiences, this is a generation that emphasises the now than the future. This is reflected in the homeownership data as well. People are delaying home-buying decisions and are comfortable living on rent through their twenties for the flexibility in terms of location. Millennials often switch more jobs in their twenties than any other generation before them. The former could also be attributed to the fact that post the 2008 crisis millennials do not consider job security as a major concern.

How does this affect the hospitality industry one may ask? millennials prioritize experiences over things. They value things to do over materialistic opulence, while on a vacation they might spend more time outside their accommodation or rooms and more in the community spaces and outdoors. Millennials spend more time and hence more money on experiential stuff such and F&B, sightseeing, cultural and day tours, adventure sports, nightlife etc.

What that translates to is that the hospitality companies now are looking/or should look to squeeze out their room cost(per key cost) and invest more on the things to do side of the business, what seems to be still lacking is a sense of community building around the hospitality industry. Millennials often travel in smaller groups, in pairs or even solo. The Internet has given us access to information in ways earlier generations did not have. We can explore, plan and book travel through our smartphones, which has enabled us to travel more.

What started as a generational shift is starting to influence the product and interior design of our hotels. Spaces are increasingly becoming more minimalistic and with the usage of a couple of colours and an accent colour that breaks the monotony. Take the example of Bloomrooms, they use a standard white colour to make smaller spaces a bit more hospitable and floor cladding to a lighter shade of oak along with canary yellow to break the monotony.

Millennial centric products and communities have become the need of the hour, what the hospitality companies will soon realize that a differentiating factor would be the customer engagement and not plush interiors, or grand lobbies or add on services. In India, we should take a leaf out of European hospitality industry trends. In major metro areas in Europe space is judiciously utilized and the focus is on creating community spaces.

When I think of the above one example comes to mind, Live Zoku which has aced the product-market fit for this generation of millennial travellers. Having a presence in Amsterdam, Copenhagen and Vienna, Zoku aims to create an immersive experience for people looking to do more with their stays. It has a cafe, a pub, a community space, a fitness studio, co-working spaces and co-living spaces for long stayers. As the distinction between first(home), second(workplace) and third(between work and home)place in our life becomes blurry, there emerges a hybrid of Co-working and Co-Living space fuelled by the digital economy aka the gig economy, digital nomadism and WFH/Workations due to Covid-19 pandemic.

As things move towards this hybrid model, so does the need for community engagement elements to breathe life into these repurposed real estate projects. It might not be the aesthetically pleasing, or the most clearly defined model. But, it is effective, efficient in terms of product design and solves a real-world problem along with being engaging.

We do see a lot of backpacker hostel chains the likes of Zostel and goStops taking on the workation challenge and trying to achieve product-market fit. What I feel most lacking is a sense of community which I feel is best achieved by a chain of European hostels called Hostel One. Consistently top-rated hostels on Hostelworld and other OTA platforms. They are engaging their patrons with family-style dinners rather than piling on complimentary breakfast with a boring buffet spread. The dinner is family-style with everyone at the dinner table at 9, one dish for everyone served piping hot, freshly prepared resonates a feeling of being at home away from home. I am, definitely not suggesting that this socialistic construct is for everyone out there, But, it is a departure from a market that has been consistently producing undifferentiated products or marginally differentiated products.

This could be a blue ocean for a lot of hospitality franchises looking to build customer loyalty. Disrupting the value curve, carving a niche for themselves in an increasingly crowded market.