Indian IT firms pose threat to hospitality industry
By siliconindia   |   Thursday, 13 November 2008, 16:43 IST   |    10 Comments
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Indian IT firms pose threat to hospitality industry
Bangalore: IT and ITeS companies in India are also the biggest hospitality players in the country. The need of accommodating their clients and visitors luxuriously and decently is prompting several IT majors to maintain their own accommodation facilities, reported The Times of India. While Infosys Technologies has a country wide room inventory of 13000, Wipro has 500 rooms across three of its facilities in Bangalore. A little part of these rooms are meant for trainees - Infosys allots less than 40 percent of its rooms to its trainees- a lion's share of those facilities are meant for visitors and are of a quality that compete with luxury hotels. TCS, Satyam, HCL, IBM, Accenture, and HP too have their own or outsourced accommodation arrangements for their clients and and employees traveling for site visits. These options save a huge amount of money for these companies as arranging accommodations for their clients in big hotels is highly expensive. For instance, Wipro gets about 500 visitors a day. And also 6000 employees of the company travel every day between various facilities of the company. It would have incurred a big amount if the company did not have their own accommodation. According to TV Mohandas Pai, HR head Infosys, "A hotel room night costs $150, and it will cost us $25000 to put up 175 foreign visitors. That is around $10 million for a year. And to put up 6000 employees, it will cost Rs 1.5 crore a day. So even a 50 percent saving in this is big for us." While Infosys charges Rs 1250 per night for their rooms while Wipro takes Rs 1000. However this is adversely affecting the hospitality sector as Bangalore alone has 1200 to 1300 rooms of IT and ITeS companies that directly compete with higher-end hotels. And this company facilities, that have 100 percent occupancy, has grown by 20 percent over last year. This happens at a time when hotel occupancies are down by 55 to 60 percent.

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