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A leading luxury hotel chain known for its speciality restaurants is now rethinking whether it wants to get foreign chefs any more, while Marriott International has already told local vendors to match the quality of international food items like cheese. The idea is to cut on huge import bills.
The expensive wine cellars and Scotch collections have become even more so — thanks to the rupee’s exchange-rate woes since May this year.
The import cost for the food and beverage section, which normally ranges from four per cent to 15 per cent of hotels’ total cost, depending on star rating and speciality restaurants available, has jumped 7-10 per cent over the past three months.
“Hotels are now becoming more cautious. Costs are increasing in terms of payroll, raw material, power and fuel. Imports have to be cut as profit margins are getting squeezed,” says Veer Vijay Singh, chief operating officer, Vivanta by Taj. The hotel will soon take a view on increasing the prices and its list of imported items. It is also taking steps to deal with this challenge in other ways, such as by using Indian staff, instead of expats.
“We are gauging the circumstances. In many areas, we cannot compromise on quality and authenticity. But some of the imports can be cut. So these things need to be worked out,” Singh adds.
Hotels are also avoiding importing expensive kitchen equipment like grills, refrigerators, etc, and substituting those, instead, with “equally good” Indian technologies. At the same time, all companies are trying to make the most of their supplier and contractor relationships — to get the best deals.
“We have started focusing on our inventory management. We are buying frequently and only as much as required. We also have interactive kitchens which reduces food wastage,” says Rajan Bahadur, chief operating officer of The Grand, Vasant Kunj, New Delhi.
Food items account for a major chunk of what a hotel imports on a daily basis. From Amsterdam cheese to German sausages, pastas, olive oil, special sauces and even items of guest amenities in the room are, at times, sourced from abroad. “In some cases, we are talking to our vendors. We are considering every element of import and looking at ways to compare those with local produce, and switching over wherever possible. Quality remains the prime focus,” says Rajeev Menon, area vice-president for South Asia and Australia, Marriott International.
Most companies feel the rupee’s recent depreciation against the dollar and a rising inflation rate have posed a double whammy. “Hotels are visiting every operational cost head. Taking steps like minimising recruitment, promoting internally at a lower cost, reducing power consumption and deferring plans of upgrade,” says Patu Keswani, managing director, Lemon Tree Hotels.
GO INDIAN
- Equipment: Technical equipment like fridge, grills and refrigerators being sourced domestically
- Supplies: Vendors for food supply being asked to match global standards
- Chefs: Recruitment of foreign chefs being reconsidered
- Amenities: Luxury bath amenities in 5-star hotels also causing a dent
- Pricing: Hotels likely to go for a price revision in their menus
