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“Rising food costs, liquor sourcing issue dog hotels”: Marine Plaza GM
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Saturday, 25 October, 2014, 08 : 00 AM [IST]
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Akshay Kalbag, Mumbai
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fiogf49gjkf0d The problems most hotels in the city, including the South Mumbai property Hotel Marine Plaza, are suffering include the rising costs of food, manpower, heat, light and power; the increase in competition, and the shift in business space.
Before laying the aforementioned issues threadbare, Sanjeev Shekhar, the hotel’s general manager, stated, “Properties that have permits to serve liquor encounter the issue of sourcing.”
High costs of food
He said, “The costs of all consumables have increased by at least 30 per cent over the last year. And of course, the patron is unwilling to bear the whole burden. So each of the restaurants in the hotel has to take the slack. Consequently, the margins are affected.”
Liquor sourcing
Shekhar stated that the excise department had laid down a complicated set of regulations, which prohibit the supply of alcoholic beverages from overseas for at least three months every year.
“The increase in the price of liquor - a result of the various kinds of duties levied on it - is unrealistic. Patrons seem to be trading down all the time. Being a five-star hotel isn’t beneficial anymore, because people are looking for cheaper alternatives,” he added.
Other issues
High manpower costs
“Trained staff is not easy to get, and the cost of training new staff is very high. It is a known fact that the rate of minimum wages has been is increasing substantially every year, and in some instances, even a couple of times a year,” Shekhar said.
“Moreover, of late, there are numerous opportunities for employment. Coupled with this is the fact that inventory has gone up manifold. Hence, the demands of potential employees are high,” he added.
High heat, light and power costs
“Despite efforts to lower the electricity units year-on-year (and the partial success at doing so), the unit rate keeps rising, and negates savings. The air-conditioner is the main culprit. As the building ages, the cost of the AC rises, owing to old and inefficient equipment,” Shekhar said.
Increase in competition
“Stand-alone restaurants open all the time. They have a better ambiance, and keep up with the latest trends. Although the lifespan of these eateries is just one or two years, they capture the imagination of the people, at least temporarily,” he added.
“This forces the restaurants at hotels to refurbish at shorter intervals, which eats into their profits. The decreasing consumer loyalty, and the propensity of the fragmented market to offer lower prices do become challenges as well,” Shekhar said.
Shift in location
“Unfortunately, the main feeder market for Hotel Marine Plaza - namely the South Mumbai business precinct of Nariman Point - has been emptying out towards the north of late,” he added.
“The suburbs of Bandra Kurla Complex (BKC), Andheri and Malad are emerging business hubs. This has a direct (and of course, adverse) impact on our business,” Shekhar stated.
Overcoming the challenges
He said that Hotel Marine Plaza - which has three restaurants (The Oriental Blossom [a Chinese restaurant]; Geoffrey’s [a bar], and The Bayview [a coffee shop]) - was doing its best to overcome the challenges.
“Our pricing is very attractive, and we undertake promotional activities regularly. The executive chef at The Oriental Blossom is currently in Singapore, where he would be learning new recipes. Geoffrey’s now has a smoking area,” Shekhar added.
“As far as The Bayview is concerned, we have come up with changes in our buffet menu. Moreover, we are not open only for snacks, but also for breakfast, lunch and dinner,” he said.
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