Clinton's Visit To India Generates Economic Optimism
<B>Clinton's Visit To India Generates Economic Optimism</B>
By Neelam Mathews
Bill Clinton's visit to India, the first by a U.S. president in the past 22 years, and the subsequent signing of agreements worth $3 billion was an indication of a substantial shift in U.S. policy. Despite some criticism as to the importance of the visit, travel management companies looking at the development with prudence said this is a sign of better times to come.
It may be some time before the significance of the visit seeps in, but there is optimism that business travel will grow between the world's most powerful democracy and the world's most populous one. Major deals concluded from Clinton's visit to India included Hughes Network Systems signing a $70 million contract--the world's largest--for VSATs, Motorola's MoU to develop a local multipoint distribution system for wireless broadband access and Enron Corp.'s agreement to supply natural gas to its Indian partner.
William Daley, U.S. commerce secretary, said the United States was India's largest trading partner and "these agreements demonstrate the positive impact that U.S. technology, expertise and world-class equipment will have on the development of India's infrastructure and overall economy. The United States will do everything necessary to bring the power of prosperity to the doorstep of world markets like India."
Pratima Vasan, the manager of communications at Delhi's Welcomgroup Maurya Sheraton hotel--where Clinton stayed--said, "the visit has opened doors for U.S. business visits to India. It has helped to prove that appropriate infrastructure exists in India. Our main challenge was to torpedo the mindset about India that nothing works. Once 170 people were checked in within half an hour of arrival, our work was half done." Vasan added that the Maurya Sheraton scores as a top business hotel for international travelers because of its knowledge-based skills, international branding, British Sword of Honor for safety and strict hygiene standards.
Carlson Wagonlit Travel country manager of sales and marketing Malvinder Rikhy said that "American corporates visiting India wanted brand familiarity of hotels and travel management companies, low prices, high value and technology." Carlson recently signed a 50-50 joint venture with Ind Travels, one of the largest corporate travel management companies in India that recorded a turnover of $50 million last year. Rikhy added that with the additional business expected from U.S. multinationals in 2000 as a result of its visibility, Carlson expected business to increase by an additional 50 percent.
Airfares in India also are expected to increase this year as a result of high demand and limited supply of seats. While analysts said this will not affect the already negotiated rates with corporates, negotiated hotel prices are expected to be reduced by 15 percent following a recent change in hotel rates tax structure and an increase in room supply.
Business hotels, such as the Fortune Park brand of the ITC Welcomgroup, are on a major expansion spree with 22 new properties expected to be put under management control by the end of 2001. The hotel chain is planning to introduce Fortune Inns under the two-star category. These hotels will be strategically located in small industrial towns.
Fortune Hotels, a brand created by ITC Hotels for three- and four-star segments, will launch seven new properties by year-end. With this expansion, the chain plans to add 2,000 more rooms by the end of 2001. Fortune Hotels managing director Ravi Suri said the properties had between 80 and100 rooms, would be midprice tourist destinations and were being targeted towards business travelers. The room tariffs vary between US$23 and US$60.
The expansion plan by Fortune Hotels is an emerging trend in the Indian hotel industry to concentrate on the three- and four-star segments to attract a higher number of business travelers. To cater to these segments, such hotel chains as the Oberoi group have set up Trident hotels; Taj has the Residency chain; Radisson has Country Inn and Suites; Holiday Inn has some properties in the four-star segment; and Best Western has mega plans for taking management control of budget hotels. Carlson's Rikhy anticipated that American corporations, after their initial acquaintance with India, will view price-conscious, growth-oriented, no-frills, technology-savvy brands like The Trident properties as favored hotels.
With corporations increasingly looking at retreats away from metros for brainstorming sessions, hotels close to Delhi, such as The Radisson, now are tapping the mid-manager segment. The new super-luxury segment, which includes the Rafael Hotel group's first property, the spa-hotel Ananda in the Himalayas ($275 per room), promises its guests a "lifestyle evaluation."
The $330 per room Oberoi resort, Rajvilas, also is beginning to get its share of VVIPs. The Oberoi Hotels & Resorts vice president of business development Ragini Chopra said, "Set over 32 acres, with only 72 rooms, Rajvilas is a quiet luxury hotel, offering a high degree of personalized attention to each guest and privacy--essential perquisites of guests for complete relaxation.