The midscale hotel segment was the hardest-hit by the recession, and while both budget and luxury have a number of new rooms planned for 2014, midscale hotels only represent 4 per cent of new developments in the pipeline.
Offering standard services such as website and booking engine development, the Ideal Hotels platform also presents hotels with an opportunity to feature in preferred agreements with travel management companies, helping them increase loyalty from business customers.
Rahul Arora, director at Luxury Hotels Group, told BigHospitality: “One of the big reasons why the midscale sector suffers the most in a recession is that it targets one of the most transient traveller type. If you’re a budget traveller, the recession doesn’t affect you, and in fact cheaper opportunities increase for you, and when you’re a luxury traveller in the 5-star segment, the recession doesn’t affect you either. It is the 3 and 4-star category that suffered the most, also because they target a lot of the corporate market and business travellers.
“To counteract the effect of the growth of the budget and luxury markets, the midscale segment can increase the loyalty side of things by having preferred agreements and consortiums in place, so that you are one of the first venues to be booked for corporate reservations. We have preferred agreements with a lot of consortiums and travel buyers and travel management companies – much more than what independent hotels are used to. With that type of agreement loyalty is a lot higher than without it.”
Based in London with offices in Dubai and Delhi, Luxury Hotels Group hopes to attract independent unbranded hotels with its flexible offer and representation in the Middle East and Asia – two increasingly important markets for the UK hospitality sector.
“We promote flexibility, and very much encourage hotels to drive business through their own channels, lowering costs – which is something that hotels really want. Because of the flexibility that we offer we give them an ad hoc service as such, in which they can take however many services from us as they need to,” added Arora.
He explained that Luxury Hotels Group was originally founded to give marketing support to independent hotels in the 5-star segment, but that after working in that market for a while, the company noticed a lack of services tailored for the midscale sector.
“This is how the idea came up, and we launched it at ATM in Dubai last week, to get that up and running especially for the target market. With Ideal we are targeting contemporary hotels that are looking for an extra marketing push by being able to leverage what we have to offer in terms of software solutions, representation, distribution and revenue management – skillsets that they may not necessarily have.”