Indian hotels found a revenue generator in F&B service last year as guests increased consumption and interest in banquet operations, a new study revealed.
Food and beverage (F&B) banquets are common in 5-star hotels in Asian countries but the new study by STR and Horwarth HTL revealed that consumption and popularity increased even in 4-star and lower category hotels.
According to TTG Asia, the report revealed that F&B banquet services contributed 42.3 percent of hotel revenue in India. STR's Central & South Asia Business Development Manager, Vidhi Godiawala explained that the increase in middle-class Indians and "the impact of F&B consumption as an overall contributor to hotels revenues" helped boost overall hotel performance in the country.
The study also suggested that F&B service has a reasonable revenue potential in industries outside urban areas as lower-tier hotels also saw significant progress in profits through the service.
In hotels that feature up to 50 rooms, profits from F&B operations accounted for 37.8 percent of total revenue despite a slightly low figure in terms of foreign guests visiting the country. Tourism numbers did not increase largely last year but experts suggest that the figures point to India as a very affordable destination for travelers.
The report was based on responses from 475 hotels that make up a total of 36,029 rooms. The results showed that India's hotels have potential in growing their base internationally to cater to global demands, especially in the food and beverage sector.
Aside from F&B operations, the study also focused on Indian hotels' leisure sect. According to Hotel News Resource, the report said leisure represented around 41.5 percent of the country's overall demand share. This means there is significant space for growth and development in this particular industry.
Godiawala noted that domestic travelers provide the hotel industry's F&B segment with strong demand and resilient growth. On the other hand, he pointed out that the industry's GOP levels need to improve further.
Meanwhile, the Global Luxury Hotel Market 2018 report indicated that Indian and Southeast Asian hotels are expected to grow market shares in the coming years. While Indian hotel chains did not make it to the top five list of luxury hotels that took up a huge percentage in global market terms, India is considered a fast-growing region in terms of growth.
The Indian Hotels Company Ltd., in particular, is seen as a key player in boosting the local market, especially after it announced the launch of "Ama Trails & Stays," the country's first branded product in the Indian market.
