HOTELIER INDIA QUESTIONNAIRE

Que - 1 After being buoyed by pent-up travel demand following the second wave, how badly has the hospitality industry been affected by the third wave, in the immediate term, in percentage terms? What has been the experience of Leisure Hotels Group during this interim?

Vibhas Prasad We found that during the third wave, the revenues fell by 70% in the first week of January 2022, but recovered by 20% the following week.

During the 1st lockdown in 2020, the entire Hospitality industry faced a shut down for almost three months, starting from the end of March 2020 till early June 2020. While we were allowed to open our properties in Himachal, Uttarakhand and Uttar Pradesh from June 2020 onwards, there were restrictions to enter the state whereby tourists needed a RT-PCR test to cross the border. Due to these onerous conditions, there was virtually no travel till September 2020.

As a result, H1 2020 was an absolute washout. Business started to revive in October 2020 and there was a surge in “Leisure Travel” and we had robust bookings with firming up of rates across almost all our leisure destinations. We ended the financial year with only a 40% erosion in top lines in spite of being shut for 6 months.

We were seeing similar trends before we were caught unawares by the second wave. Since a majority of the Group’s (LHG) properties are in Uttarakhand & Himachal Pradesh, the first quarter of every financial year (AMJ) becomes the most important quarter due to summer holiday travel demand. We lost two crucial months (April - May 2021) of the first quarter of summer travel due to COVID. After the decline of the second wave, we restarted business from a low base all over again. Business revived from Q2 onwards in 2021 all the way till the end of the year with festive New Year celebrations till the third wave rocked the party.

Seeing the current trends, it seems that travelers are once again putting off “Leisure Travel” till the third wave passes on by. With the holiday season on and the vaccination campaign in full gear, we anticipate that demand will be robust in the following weeks/months as soon as this wave abates.

Guests have not lost their inhibitions; rather, hotels have to gear up to provide a stress-free holiday by implementing appropriate safety measures.

Que - 2 You had stated that your hotels did 45% occupancy in any given year during the JAS quarter, but they registered 60% during this three-month period in 2021. So how did this increased occupancy reflect in terms of RevPAR during this month? Has this matrix declined since January, relatively? Please elaborate.

Vibhas Prasad Yes, RevPAR increased proportionally in the month of JAS 2021. However, we have seen a sharp decline in Occupancies and RevPAR, due to the current third wave.

Que - 3 Over the past couple of years, many hoteliers have slashed rates instead of holding them. How will this strategy affect them once rebound begins?

Mukund Prasad For us in leisure destinations like Naintal, Corbett, Dharamshala & Rishikesh, domestic tourism has recorded a substantial recovery in 2021. And we expect this surge to continue through H1 (until June 2022); however, H2 is expected to return to normal business trends, allowing for pricing correction.

Que - 4 When the demand for travel returns en masse, how will you reintroduce your brand to existing and potential travelers by communicating how they can maximize their value of stay at your properties?

Vibhas Prasad We have already experienced the traveler demand cycles post the 1st and 2nd unlock-down in 2020 and 2021. What we see is that this travel demand is determined more by proximity from the source market and the destination characteristics are determined by Hill, Forest, Beach or by the River. The destination needs to offer experiences for activities, excursions and sightseeing within a cocoon of safety, away from the city pollution and stress of communicable infections.

Along with offering safe distances with private accommodation, the ambience should include open spaces amidst nature for guests to move around after being confined to their homes and offices.

The brand promise is built around easy accessibility, curated experiences, value for money and above all a well appointed resort which is sanitized with stringent safety protocols. It is around the above key factors that we build our brand promise and our destination USP’s with clear communication on these fronts which are easy for the traveler to relate with.

Que - 5 Are you seeing a trend where guests are seeking longer stays? If yes, then what is the average by which the duration of stays has increased in the past couple of years?

Vibhas Prasad The group has seen a similar trend of 2-3 night stays at the majority of our resorts, given the primary source markets are within driving distance. During the lockdowns, we saw 5% of bookings averaging stays of 7-10 nights in a few of our properties, particularly in villa’s/cottages.

Que - 6 How is your hotel chain leveraging tech tools to enable dynamic pricing and event repricing multiple times a day to quickly react to what's going on in the marketplace?

Vibhas Prasad In today's digital first economy, technology is playing a key role in hospitality companies' understanding of dynamic pricing as a key driver of growth and success. All our hotels have already adopted these new-age revenue management technologies to automate various processes to sell their inventory most optimally.

Our journey using such processes started more than a decade and a half ago when we were looking to put our entire inventory online and sellable to direct guests. We used to price our inventory based on three seasons; summer high, monsoon low and winter shoulder.

We were able to identify a partner for all things e-commerce in a company, Simplotel, for us to create a website, optimize search results to be found online, have a search engine and a payment gateway all linked to a channel manager (Axis Rooms) and to our reservations network (CRS with Hotelogix).

The online travel booking movement saw the evolution of OTA’s which were able to consolidate more than 60% of the accommodation market share for which we needed a channel manager and a RMS tool (AiOSell) to ensure that our inventory is priced right depending upon demand and supply (like occupancy, day of the week, competition, lead time, last-minute timing and market demand).

By creating our own seamless tech stack, we are able to offer dynamic pricing so as to be able to pick off the demand optimally as it comes. These tools typically use machine learning-based algorithms to forecast dynamic pricing based on inventory allocation and revenue management on a day to day management that results in maximizing revenues due to use of AI & Data Analytics.

Que - 7 The traveler demographic has undergone a massive change with guests seeking more experiential destinations coupled with personalized services. Since all hoteliers are targeting this demographic, how has Leisure Hotels Group expanded its marketing funnels with differentiated offerings to appeal to this clientele? How are you also rehauling your existing services to match their evolved needs?

Mukund Prasad The group will use a "full-funnel" marketing strategy that blends both brand awareness and performance marketing. The group will also continue to use omni-channel marketing to provide guests with a personalized and seamless experience during their stays.

The Leisure Hotels Group has been in the business of creating guest experiences in our resort destinations for well over two decades. This has remained our forte, centric to our customer demographic. The experience has been built around activities, entertainment, the dining experience and local flavors keeping these in sync with the ambience and locale.

Our selection of destinations is completely in sync with the guest expectation of having upscale and luxury resorts within drivable distance, located in serene and natural environs, free from pollution. The resorts offer open areas for guests to comfortably move around while maintaining their social bubble and this is what we take to the market.

We have been overhauling public areas and other existing outlets besides adding fresh inventory across multiple destinations for tailor-made experiences to both new and repeat clientele.

Que - 8 Are these guests more inclined towards international brands with standard branding or are they willing to explore newer properties? Please elaborate on this answer and also answer how Leisure Hotels Group is meeting this need.

Mukund Prasad There has been a massive change in travel preferences, with individuals favoring health and well-being, paying greater attention to local communities, local experiences, and a growing interest in off-the-beaten-path adventures.

Given that international travel is still unsafe and options are limited, travelers are opting for shorter vacations within driving distance. However, once the restriction on regular foreign passenger flights is lifted, substantial outbound travel is expected.

LHG ensures top-notch safety and hygienic standards for our customers, as well as authentic experiences customized to the travelers.

Que - 9 Have you revamped your company’s F&B program with customer-centric menus? Please elaborate. Also why are these more sustainable than traditional buffets?

Mukund Prasad Through COVID we have been re-inventing our F&B Experiences with an investment on creating new Al-Fresco Deck outlets with Unique Menus.

However, we must also understand that while guests are conscious of the situation, no one wants a diluted experience in dining. An elaborate spread & multiple choices are still expected which we have re-thought with well spaced layouts both Indoors and Outdoors complete with Live Counters & Mobile Carts which come together with the Kitchens to offer variety & choice.

Live Interactive counters for guests in resorts allow personalisation as well as freshly prepared dishes allows for outdoor experiential meals in contactless surroundings.

Que - 10 Most hotels used to limit their event spaces to conference rooms and banquets. What are some innovative ways to use all their spaces, especially the outdoors? How has Leisure Hotels Group reimagined its non-guest room spaces to sell it in a more creative way?

Mukund Prasad At Leisure Hotels Group, delivering the old-fashioned style of award-winning and full-hearted services is at the core of our customer delight experience, we have always maintained outdoor spaces as an integral part of our Resorts & Hotels.

This is where guests like to unwind and relax. Gardens, Decks for dining, Terraced areas all have a charm of their own. We like to keep our guests out of their rooms so that they can enjoy the destination, the weather and the sights while on holiday.

To do this our entertainment & recreation activities are planned around such spaces. Hi Tea in the evening besides major meals allow for counters scattered in the open areas so that guests can enjoy the openness.

Bonfires and Live Musical evenings are hosted in outdoor areas like Patios and Verandahs even when weather does not permit events in open lawns.

In some properties we have taken to converting extra Restaurants to smaller party venues and vice versa depending upon the demand and traffic of guests.

Que - 11 What is your brand’s current footprint in India? Of these, how many are part of a management model and how many are owned by the company. What is your company’s project pipeline through 2023, and how many will be owned/managed?

Vibhas Prasad At Leisure Hotels Group, we have been able to make our mark as a major player in North India’s hospitality sector. Our portfolio of smart hotels, boutique resorts, luxury Villa’s & bespoke camps, incorporate beautiful properties across tourist & scenic destinations offering leisure, adventure, wellness, wilderness & spiritual experiences.

Since the time of the first venture at Nainital – The Naini Retreat in September 1989, the group has had the opportunity to serve the largest number of tourists in Himachal, Uttarakhand & U.P at much sought after locations i.e. Nainital, Corbett National Park, Haridwar, Rishikesh, Ramgarh, Bareilly, Kausali, Dharamshala etc.

Out of 29 properties,
Managed - 9
Owned - 20

• Leased (Given): 2 Club Mahindra
• Management (Given): 2 Taj Hotels

Product Pipeline - Bhimtal / Nainital / Corbett Park / Mussoorie / Naukuchiatal/ Jaipur
Further elaborated in Que 16

Que - 12 You had planned to open a hostel in Rishikesh, which would mark your company’s foray into the co-accommodation sector. While this was shelved during the pandemic, do you plan to revisit this business model? Please elaborate on the reasons for your answer.

Vibhas Prasad After meeting with success with our first Upper-Upscale Resort in Rishikesh, Aloha on the Ganges, several years ago, we as a group decided to expand in the holy heritage city with a new upscale hybrid ‘youthstel’ under the brand "The Hideaway Bedzzz" in the first quarter of 2020. While the project was delayed slightly due to the onset of Covid, we were able to open with rave reviews.

The uniqueness of the Hotel lies in its offering great value for money and a smart stay experience. We offer both a budget and a premium accommodation within the same Hotel Premises. The Hideaway Bedzzz is conceptualised to offer affordable & casual comfort amidst a vibrant & lively backdrop which is the Ethos of each and every Bedzzz property.

The Bedzzz model offers a professional and colourful atmosphere for like-minded couples, or single travelers looking for experiences in the heart of these destinations. Apart from comfortable rooms & premium dorms, the hotel also offers an interesting rooftop lounge. The Lounge is a great place to unwind with an array of recreational options including Live Music, Indoor Games, Library, Large Screen Entertainment and more. Our Bedzzz properties offer a Signature Rooftop Dining experience with music at the “Travel Diaries Cafe” which is unique to its model across all destinations.

We have since taken the concept to one of India’s oldest living cities, Varanasi with the launch of The Hideaway Bedzz (Varanasi) in October, 2021 with plans to expand to other cities on the cards.

Que - 13 In the current volatile environment where there is a lot of ambiguity and where an employee is doubling up for different roles, what kind of groundwork is Leisure Hotels Group laying down for teams to weather the stress that VUCA creates? What are some tangible measures that it has taken to offer them the comfort and stability they need currently?

Mukund Prasad We have always been conscious about their employees since the very beginning. It was on account of this that the group continued to maintain & support its Manpower through the COVID onslaught both at work and at Home. On account of this the team has not felt any uncertainty and we have not seen any volatility on the Manpower thankfully, Employment security and mental assurance was paramount during these periods

Additional responsibility and Multi-skilling has been at the forefront of Manpower management during the last 2 years across all properties. Teams have been focused on managing their Health and fitness during this period. Healthy Food and Immunity Boosters have become a part of the daily curriculum at the units. Staff Activities and Team building has been an important element at play. Multi Skilling has allowed our teams to expand their professional horizons and explore areas not associated with before. Our team leaders are connected with the Staff members even when they are at Home. Regular Communication channels with staff and Families are maintain to ascertain their wellbeing and to offer assistance where necessary.

Que - 14 Did Leisure Hotels Group have to lay off employees due to COVID? Please elaborate on the number of employees in your workforce.

Mukund Prasad We believe that franchise is very important. We do not impair the internal culture of the organizatiize it at the expense of our culture, teamwork and the integrity of our people.

The biggest asset of our chain is our human asset who put in tremendous work, enthusiasm, energy and spirit to achieve and excel. The Group regards its loyal and experienced staff to be its most important asset. Significant efforts are being made into staff training, career development, staff well-being and staff communications, taking account of local culture and traditions as far as possible. As a result, the Group enjoys strong loyalty from its staff with many very long-serving members.

Even during the Covid crisis we were able to look after our more than 1,000 colleagues as human capital across the group and didn't furlough our assets. However, there were some months wherein we were forced to offer pay cuts to meet our financial liabilities and obligations.on for extra profitability. We would like to maximize our business, but we would not like to maxim.

Que -15 How is your company planning its labor capacity to avoid repeating the staffing crisis that the industry experienced last year? What are some decisions that you are taking about labor sources, overtime and engaging contract labor?

Mukund Prasad As mentioned earlier, since we maintained our workforce through COVID, we did not face a staff crisis across our destinations. We have been conscious about recruiting new staff in our units though to ensure that we do not face an overabundance of people during a slowdown. The same consciousness extends to any Contracts with 3rd party vendors wherein we avoid excess staffing as they also bear any brunt of a slowdown.

Manpower across all units is done within Sanction budgets depending on the size of property and volume of Business. There is no hard and fast rule. Multi-skilling local recruitment allows us to keep Nos. well in hand.

Since we have multiple units we are able to deploy / depute manpower where the requirement comes up thereby maintaining a group wide balance

Que - 16 What are some of the other plans on your to-do list for this year?

Vibhas Prasad We have been in the Hospitality business for more than three decades. Initially, the model was to build & operate for ourselves. Over the last three decades, the group is now trying for an “asset right” model wherein the group has built and leased hotels & resorts for the Mahindra Group in Naukuchiatal & Corbett National Park, built & given a Resort on management contract basis to Taj Hotels in Corbett National Park and another one in Haridwar.

LHG is the largest Hotel Chain operating in Uttarakhand for the last three decades. As pioneers in the field of hospitality in Uttarakhand, The Group has been able to set standards & drive quality by offering good facilities & services to its guests. The individual resorts & camps typically offer between twenty to sixty rooms, ensuring that all guests get very warm & personalized services.

The group has been focusing on leisure destinations in Uttarakhand, Goa & Himachal Pradesh across bespoke villas, boutique resorts, luxury camps and smart business hotels.

For the other hotels that the company does not own, it is expanding through the Management route by taking third party properties on management contracts. This hybrid strategy is currently helping the company with its expansion plans.

We are the pioneers in offering Hospitality at Char Dham. With Rishikesh, Haridwar and now Varanasi we are also looking at more assets across spiritual destinations and circuits.

A new start-up within our fold, The Hideaway Bedzz is on an asset light model where the company will tie up with developers / franchisee’s under the ‘youthstel’ vertical.

We have a three pronged approach towards business development. One is through building our own hotels and another is through management contracts of third party properties in strategic locations. We currently have two properties with Club Mahindra and two with Taj Hotels in addition two more are currently being built.

We want to consolidate the business currently under COVID and will get back on the growth trajectory in the next few months. We are also expanding the mixed use, alternative accommodation vertical, wherein we build vacation homes to sell and then rent them back as part of the integrated hospitality estate.

Some of the properties under development this year;

Management

• Transition of The Hideaway (Grt NOIDA) into Ginger Hotel (Feb 2022)
• Upscale Resort, Bhimtal (Uttarakhand) by March 2022
• Luxury Resort, Rajasthan by April 2022
• Luxury Boutique Resort, Mussoorie by December 2022

Owned

• Upper Upscale Resort, The Earl’s Court in Nainital by October 2022
• Luxury Wildlife Resort – Jamoon Corbett Park by October 2022
• Luxury Lakefront Resort, Naukuchiatal by November 2022
• Transition of The Naini Retreat (Nainital) into IHCL SeleQtions

​​“The essence of Hospitality'', we believe lies in the true Indian tradition of Atithi Devo Bhavo – “Guest is God”. It is such philosophy and thought that has inspired us to consider guest satisfaction as supreme and has gone a long way in shaping our motto.

The group also has other interests in sugar manufacturing, real estate & agriculture and also expanding in the crafts spirit business this year with a distillery.