The rise of the Millennials in India is changing the face of the business travel and forcing hoteliers to refocus their efforts to tap this increasingly wealthy and mobile market.
Take Gayatri Gupta. The Pune-based, 34-year old spends two weeks per month in New Delhi for her job.
"My hotel has become a second home. Hotel staff from the bell captain to the concierge know my name, favorite foods and choice of music. I also get a loyalty discount and a room with the best view," the independent soft skills trainer said.
Gupta said her expenditure on business stay is down 60-70 percent.
"Five to seven years ago, it was impossible to get a hotel room in Gurgaon (Delhi's new commercial hub) below $300. Today I can get a clean, modern, well-designed room in a new hotel for $80-$120 a night."
India's $135 billion tourism and hospitality industry is in the throes of a change. While rosy projections for a $418.9 billion market by 2022 led hoteliers to increase room capacity, an economic downturn over the past 5 years has dampened reality. Slowing economic growth over the past 5 years, soaring inflation, weak demand and high supply has shifted pricing power to the buyer.
It has also shifted hoteliers' focus from the leisure traveler to the more resilient business travel market. According to the Global Business Travel Association, India was the world's 10th largest business travel market in 2013, up from 24th in 2000.
"More people across the organizational hierarchy are travelling. Better air connectivity to second-tier towns means new demand is cropping across different price points and age groups," said Akshay Kulkarni, Regional Director, Cushman & Wakefield Hospitality.
A new breed of business traveler
No longer is the typical hotel customer a middle-aged executive clad in a pin-stripped suit. Instead, he is a blue-jeans wearing executive with an informal and casual air, most likely to be in his thirties. With over 150 million Indians belonging to the Millennial category (born between 1980-2000), it's a coveted catch for the hotel industry.
This category also has a very large number of female professionals, like Gupta. Women account for 41.6 percent of those enrolled in higher education and are entering the professional hierarchy in a big way. Further, they already account for an estimated 30 percent of the economically active workforce and nearly 25 percent of domestic business travelers.
"Self-assured, optimistic, globally connected and curious, the Millenials are poised to take the hotel industry by storm," Ernst &Young said in a 2014 report on Global Hospitality.
New product and service offerings