News: Luxury hotels target corporate office clients to tide over the Covid-19 crisis-23/06/2020
Updated On: June 23, 2020
Luxury hotels target corporate office clients to tide over the Covid-19 crisis
Toyota is currently negotiating with Marriott and Novotel for office space in Mumbai and Kolkata and also for similar packages in Bengaluru.
CHENNAI: Luxury hotels are targeting corporate office clients as a means to tide over the Covid-crisis, which has brought both business and leisure travel to a standstill. Hotel brands — including Marriott, Novotel and Ibis — are tapping big corporate names in an effort to raise rental income.
On offer are banquets, rooms, business centres and other space to be used as office premises along with security, Wi-Fi, housekeeping, sanitation as well as food & beverage. But the biggest draw is the affordable rent, flexi-mortgages for 3-6 months as well as 1-2 years. And no demand for a lock-in period or down payment.
Toyota is currently negotiating with Marriott and Novotel for office space in Mumbai and Kolkata and also for similar packages in Bengaluru.
“We are negotiating with Toyota among other automobile companies as well as IT companies. Typically, project-led businesses that require spaces for shorter duration have shown interest in this concept. Companies are not interested in long-term rent contracts — they are looking for flexible 3-6 months or 1-2 year contracts with no lock-in periods, which is why they find these packages interesting,” said Parul Thakur, senior area director, sales & distribution, south Asia, Marriott International.
The hotels are customising their packages to target the business focus of their respective geographies. “We are surrounded by the startups and flexi-office culture, which is flourishing across the tech industry. Currently, our Chennai hotels are only focusing on flexi-rentals, that is 3 months, 6 months, or 11 months of rented banquet spaces,” said Rohan Sable, GM delegate-Novotel & Ibis Chennai OMR/ Novotel Chennai SIPCOT.
Corporates say these luxury office offers from hotels are 40% cheaper with add-ons thrown in. Just relocating 3-4 regional offices to hotel premises has helped save one corporate client a staggering Rs 50 lakh per month. And then there are the add-ons.
“We are negotiating rental agreements with hotel brands for our regional offices in multiple locations,” said Naveen Soni, senior vice president, sales and service, Toyota Kirloskar Motor said.
“A round of tea/coffee is generally part of the agreement. Apart from that, we offer attractive discounts on various other hotel services. We are well equipped to provide all cleaning and sanitation services and will do temperature checks at the entrance of the hotel. Face masks and thermometers will be readily available for guests on request,” said Sandeep Johri, general manager, Novotel Kolkata Hotel & Residences.
Nor is the trend restricted only to the creamy corporate layer in metro markets. Take Ibis which is offering this hotel-office service across all 13 cities where its 19 hotels are operational including tier-2 and -3 cities.
“We are offering alternate office space solutions with all the amenities of a traditional office setup and more tailored to meet the needs of businesses of all sizes — from entrepreneurs to small startups to corporates,” said Sylvain Laroche, director of operations – Ibis/Ibis Styles India. Dittoed Marriott’s Thakur, “We are scouting in tier-2 & -3 cities with our mid-budget segment properties as well.”
The office relocation option comes at a time when corporates including Eicher have announced that they are shutting down some regional offices as field staff work from home. For hotels this is a lifeline for survival.
“The current environment has led to leisure travel hitting an all-time low. We have proactively also approached corporates to explore short- and long-term rental agreements with them,” said Johri of Novotel Kolkata.
