Odisha's hotels eye tie-ups with luxury brands to attract foreign tourists

A three-fold increase in the number of hotel rooms in the state by 2025 will require a capital expenditure of Rs 14.5 bn

In its efforts to increase international tourist footfall, the Odisha tourism department is engaging key state-based hoteliers to tap the franchise business model with flagship brands like Hilton Group, Sheraton Hotels and Resorts, Radisson Hotels, Taj Group and Starwood. 

Collaboration with hospitality brands of repute could help showcase Odisha as a global tourism destination. 

Recently, the state tourism department impressed upon state-based hospitality majors the need to collaborate with flagship hotel brands. Odisha has a dismal record in attracting international brands and collaborations secured by a local hotelier could overcome this handicap. "The key reason why we are unable to pull high-end international tourists is the lack of enough five-star hotels. We have suggested to local hoteliers to explore collaborations with hospitality brands of international repute like Radisson or Novotel so that they can get franchisees to operate," a government official said. 

Leading hotel groups in the state are open to the concept.

"Collaborating with international brands likes Marriott, Starwood, Hilton Group, Sheraton Hotels and Indian brands like Taj Group, Trident will ease the marketing process as these global players have properties worldwide. Odisha's hotels will get visibility and accessibility to the global market through franchisee model," said J K Mohanty, the chairman of the Hotel and Restaurant Association of Odisha (HRAO) and the chairman & managing director of city-based Swosti Group. 

There could be two models for a tie-up -- marketing and management franchisees.

"If we get marketing franchise model with a best international brand, we will be happy to collaborate," Mohanty added.

Debashis Patnaik, director, The Crown, a Bhubaneswar-based hotel, also expressed his willingness for collaborating with international brands. 

According to the Odisha tourism website, the state has about 13 star-category hotels with an inventory of 1,200 rooms. Out of the total star-category hotels, only two properties -- Mayfair Lagoon and Hotel Trident -- are in the five-star deluxe category and the balance are below them. 

To accommodate the increased flow of tourists by 2025, Odisha needs to ramp up its hotel room capacity three-fold at an estimated investment of Rs 14.5 billion through public-private participation, said a study report. 

Odisha has 9,791 tourists per category hotel room, which is higher than the national average of 7,357, according to India Tourism Statistics. This implies that the state has a dearth of category hotel rooms.  

"During 2013-14, the net flow of tourist spending has grown by 117 per cent, contributed majorly by domestic tourists (growth of 120 per cent), while the number of tourists has grown by only eight per cent. This implies increased length of stay, higher spending per tourist arrivals and substantiates the demand for luxury and category hotel rooms in the state," read a report prepared jointly by KPMG and state-owned Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol). 

Tourism is one of the six focus sectors identified by the Odisha government for attracting new investments.   

"Considering an average of 5,000 tourists served per category hotel room, the number of category hotel rooms should be 5,000, an increase of close to 4,000 category rooms. In order to bring down the average hotel room occupancy rate to 60 per cent, the number of hotel beds have to be beefed up to 270,000 by 2025, a three-fold increase in the number of hotel beds," added the report on the Odisha Industrial Development Plan 2025.