Indian hoteliers seek new revenue taking F&B off-site
Indian hoteliers seek new revenue taking F&B off-site
15 AUGUST 2019 7:55 AM

Hoteliers in India are devising new, innovative ways of taking their successful property restaurants to a wider audiences, but warn that quality must be maintained.

REPORT FROM INDIA—Indian fine dining traditionally has been associated with in-house hotel restaurants, but that is changing, according to sources.

Hoteliers now are taking their award-winning restaurants or their menus to guests and non-guests in a host of different formats.

In a report from the National Restaurants Association of India, the current market size of the food-service industry in India is $61 billion, a figure that is growing 9% annually and due to reach $86 billion by 2023.

Anuj Kejriwal, managing director and CEO of the retail division of real-estate ownership and consultancy company Anarock, said “there is high growth potential in the restaurant business today, provided that restaurants are in the right locations and attract the right customers.”

“Despite prevailing high rentals in some of the busiest hubs, some fine-dining places do phenomenal business simply because they have their strategies right and tap into the desired clientele,” he said.

It can be hard to pass up the revenue potential of taking F&B off property.

“By taking their brands into a standalone model, these hotels will tap into a far wider audience than they could possibly do within the confines of their hotel premises, as fine-dining restaurants are in high demand today,” Kejriwal added.

One example of this thinking comes from executives at the Hyatt Regency, Delhi.

Its director of marketing and communications Parinita Samanta said since 2008 the hotel has had a successful Chinese restaurant called The China Kitchen, staffed with Chinese, but she and her colleagues saw it was missing out on a sizable percentage of guests and diners.

“We realized the restaurant is patronized by the 35-plus crowd, who are brand loyalists. They will travel the extra mile for their kind of food. The food was such a success that we thought making it more accessible and affordable to a place would be a great idea. It is the millennials who we wanted to target for our brand of fine dining,” Samanta said.

The Hyatt decided to launch TCK by The China Kitchen, which debuted in Delhi’s Cyber Hub in Gurgaon.

Kejriwal said he expects more hotels to follow suit.

“The clientele (that) patronizes 5-star hotels is limited,” he said. “This does not hold true for fine-dining restaurants in prominent areas, where even youngsters who have just started earning aspire to go. The success of the restaurant will not only depend on its food quality but also on its location and the audience-type living in and around the area.”

Samanta said her research has shown millennials who are fickle, not brand loyal and look for good value.

“They have the spending power,” Samanta said.

Musing models
The business model of this trend, sources added, might morph in several different directions, such as standalones, takeouts, franchisees, hiving restaurants into separate divisions and partnerships with investment companies.

Keshav Suri, executive director of the Lalit Suri Hospitality Group, said as with many things in life, change is the only constant.

“We need to keep reinventing ourselves to stay relevant in today’s market. From stand-alone, restaurant chains to food-truck companies, they are all a step in that direction. You will see many more such innovative ideas,” he said.

Suri said the whole trend to capitalize on in-house hotel restaurants started with takeout brand Kitchens of India, part of company ITC, formerly the India Tobacco Company, and propelled by the phenomenal success of ITC’s Bukhara and Dum Pukht restaurants.

The legendary Bukhara has set up pop-up restaurants in such hotels as London’s Sheraton Park Tower, now the Park Tower Knightsbridge, a Luxury Collection Hotel.

Another example is Indian firm The Claridges that has two hotels in India and started a restaurant chain Dhaba by Claridges out of its in-house Dhaba restaurant.

Suri’s Lalit hotel chain has expanded its Baluchi restaurant brand across its estate and also started a food-truck division, which he says is the first from a 5-star chain.

“We started our first food truck in 2014 in New Delhi and received an overwhelming response. … The trucks participate in festivals and events and also go to different cities. It is a growing trend, and we are proud to have pioneered it,” Suri said, noting one of the trucks serves Mexican dishes, the ingredients for which can be hard to find in India.

The quality of these standalone restaurants must be of similar standing to the originals, otherwise those original restaurants might lose reputation, sources said.

“Since the USP is food, there is great emphasis to maintain the flavors of the original,” Kejriwal added.

“If the quality of the food and the restaurant’s ambience don’t match the parent outlet in the hotel, it can have negative repercussions on the entire chain," Samanta added.

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