Hospitality industry dole out Rs 821 cr commission

Bangalore, July 9: The burgeoning hospitality sector in India is perhaps least automated, despite the country gloating the world over that it was the top destination for sourcing IT.

According to a study there were approximately 75,000 rooms in the organised hospitality industry which had not been automated for reasons of cost of technology and the relevance of the technology.

The sector was doling out a commission of Rs 821 crore as it heavily depended mainly on intermediaries for room bookings.

Globally the sector paid around US Dollars 35 billion as commission annually.

To enable the sector get better organised room bookings and enable customers get accommodation at atleast 20 per cent cheaper than the current rates, a Bangalore based start up "Saastra Software" has come out with an evolutionary software to automate and make efficient the ecosystem of hospitality and travel business.

The software, Saastra is 100 per cent web based that provided the business model in the hospitality and travel domains, which had primarily remained uncharged during the last 25 years, Mr Vishnu Murali Konduru, founder Managing Director of the Company told UNI.

Mr Konduru said the architecture of Saastra made it possible for the owners to expose their automated inventory directly to the consumers, eliminating the need for third party intermediaries.

Consumers also had an added comfort of booking directly from the source, without any doubts and uncertainties that could arise from booking through intermediaries. For the Hospitality sector Saastra automated internal business processes such as Reservations, guest service operation, corporate client management and additionally it provided reporting services.

The software could also be used by service apartments and home stays, besides those facilities in the unorganised sector to be automated and provide better accessibility to consumers.

Mr Konduru said already 23 customers had opted for the software, which would be formally launched in August. Efforts were also on to distribute it in nine geographies across the world. In fact, the demand for the software was much more in other countries. He said ''we estimate that Indian hotels (that pay commissions to intermediaries) spend over Rs 821 crore (US Dollar 205 million) in the year 2006.'' This was from a base of 2,000 hotels, with an average daily room rent of Rs 3,000 on an all-India basis, with 50 bookings a day. ''These figures are on the lower end of their potential ranges and the real figures, if surveyed professionally, could be surely higher,'' he added.

Mr Konduru said the minimum capital expenditure that hospitality business in India could save in terms of automation would be Rs five lakh, if they chose to use the Saastra solution. This was the figure for a 75-room property. The minimum annual commission that a 75-room property, with an average daily room rent of Rs 3,000, would pay intermediaries was Rs 21 lakh.

He said US Dollar 800 billion was the size of the Hospitality business globally in 2006. MICE (Meetings, Incentives, Conferences and Expositions), which constituted 40 per cent of this segment, was around US Dollar 300 billion.

Saastra addressed the needs of accommodation in hotels, resorts, service apartments, home stays, clubs and hostels, besides company owned guest houses and MICE. MICE economy had paid attention to only hotels-based conference and meeting rooms and organised conference and convention segments.

Saastra not only automated these organised MICE facilities, but also made it possible for the unorganised facilities such as sports stadia, auditorium, exhibition grounds and theatres to join the MICE economy and earn increased revenues and profits.

The users of Saastra need not spend anything on infrastructure as Saastra, the web-based solution, could be downloaded.

Mr Konduru said ''Saastra brings together the sub-system islands of property management, distribution and sales front end on to a single ecosystem platform. This simple but powerful model makes it possible for owners to achieve dramatic reduction in cost of doing business and pass on the benefit of these reduced cost to consumers''.

UNI