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F1 stakeholders adopt the 'wait and watch'
Much against expectations of immediate dividends, the Indian F1 Grand Prix may not actually turn out to be such a hot property for the hospitality sector. The hype surrounding the event and the expected footfalls notwithstanding, hotels around the Formula 1 circuit here are a nervous lot. A single big-ticket event may not be enough to sustain business through the year at a time when the business itself is new and the economy in turmoil.
While bookings remain chock-a-block around the race weekend, it is relatively dull over other parts of the year and this has left hotel managers anxious. Distance from the national capital also means that lucrative business and high-profile travellers do not travel to this part of the region that often.
"We cannot depend on only one event, " Suraj Kumar Jha, general manager of the Radisson Blu Hotel in Greater Noida, says. The hotel, that came up at the time of the race's first edition last year, has 175 rooms that are fully booked ahead of the race.
Jha says that the buzz surrounding the event has come down over the last one year. "But this is only natural, " he says, sounding cautiously optimistic.
So is it really so bad? "A correct hotel product with proper positioning through detailed market study and evaluation can benefit from the races, " says Anshuman Magazine, CMD of CB Richard Ellis South Asia, one of the top real-estate consultants.
Magazine shares Jha's "cautiously optimistic" forecast about Greater Noida's potential as the next big hub for hospitality. The area needs more such events to add value for hoteliers, he says. "The race track can be utilised for other events that in turn bring in occupancy for hotels in the area, " says Magazine. "One such event alone may not be able to sustain rapid hotel development in the Noida region. "
The palpable mood among the stakeholders and analysts is that one needs to be in there for the long haul and not expect immediate results.
Akshay Kulkarni, executive director (South Asia) at consultancy Cushman & Wakefield, says it is only natural for the business to take time before picking up. "This is part and parcel of any development. If you look at any major project, you will find that there is always a time differential of 2-3 years. "
Additional sporting events at the track as well as development of other prized properties around the area, like the proposed night safari park, will add value to the area. Tourism, especially after the opening of the Agra expressway, will also be another attraction.
"The mid-to-long-term impact on the surrounding hotels in particular and the region in general will remain positive as leisure tourism tends to extend the stay period. Guests and visitors tend to linger on or combine other areas of visitation around the same region along with the F1 race event, " says Magazine.
And since F1 is pre-dominantly an international event, it brings visitors from all across the world, many of whom do not mind venturing out before or after the race weekend. The Jaypee Greens Golf and Spa Resort at Greater Noida offers helicopter rides from their property to the Jaypee Palace Hotel in Agra for visitors interested in seeing the Taj Mahal.
Tour operators, closely allied to the hospitality industry, are also trying to build business around the event. Tour operator SOTC's business has got a leg up due to the event. The Kuoni India company has set up SOTC Sports, a special division to deal with the additional demand around the racing event. "There has been a substantial increase in the number of tour bookings as sports travel is significantly on the rise in India, " says Vishal Suri, deputy chief operating officer (Tour Operating) at Kuoni India.
"While the race last year was observed like a big carnival because of the novelty factor, this year we see genuine fans opting for Grand Prix packages," he adds.
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