Global Hotel Chains Eye Indian Market

Global hospitality group Accor on Wednesday announced the launch of its luxury brand Raffles in India with the signing of 2 properties, one each in Jaipur and Udaipur in Rajasthan. Accor is looking to add 24 hotels in India in the next 3 years and adding around 4,000-5,000 people to its workforce.

Accor is not alone, leading international hotel chains like Marriott, Starwood, Carlson Rezidor, InterContinental Hotel— are on an expansion mode in India. All of them are scaling up their operations, possibly at a faster rate the national hotel chains, and increasing the number of properties in the country. And that’s not without a reason. The demand for hotel rooms is expected to increase between 12 percent and 15 percent at least over the next few years, while supply will expand at a slower pace. And that’s the trigger, analysts said. Accor’s expansion plan is just a case in point.

"Currently, we have 51 hotels in India having around 10,000 workforces across all our properties. With the expansion to 75 properties, we are expecting to add another 4,000-5,000 people to our workforce in the next 3 years," said Accor chairman and CEO Sebastien Bazin. Accor currently has 4,800 hotels with 300,000 workforces across the world.

The rollout of Accor’s expansion plan coincided with that of another leading global hospitality chain-Radisson Hotel Group. Radisson group also said that the group had lined up plans to double its portfolio of hotels in India to 200 by 2022. It has 94 properties operational with 49 in the pipeline at present.

“India is a very important market for us. It is the biggest single country within our portfolio... There is a lot of growth in India. It is a very high growth potential market," said Radisson Hotel Group President- Asia Pacific, Katerina Giannouka.

Accor chairman, on his parts, said: "India represents only 1 of our total portfolio now, which is way too small. After the pipeline, it will go up to 2.4 percent, which will be getting better. We should grow bigger in India. Globally we have 38 brands and we are looking at opportunities and the right partners to bring in more brands including Banyan Tree, Mama Shelter, Delano, Mondrian, Tribe among a few in next 2-4 years."

Significantly, while the majority of its expansion in India will be with its mid-scale and economy brands like Novotel and ibis, the hospitality group is also planning to expand its luxury and lifestyle brands in the country. Raffles brand, for instance, is a hallmark of luxury and sublime service.

Radisson Hotel Group South Asia Managing Director and Vice President of Operations Zubin Saxena also said that India is a mid-market growth story and the company is focusing on mid-scale and upscale segments. He said that the company would look at logical extensions, hub and spoke model, synergising its portfolio.

The company is present in more than 60 locations, with over 10,500 keys in operation and another 6,000 in the pipeline, which they aim to double by 2022. Half of the properties are in tier II and tier III cities.

“The fundamentals are strong in India. The demand is always trying to outpace supply and the demand will continue to grow,” said Saxena.

Nasdaq-listed leading global hotel chain Marriott International has also recently thrown open Courtyard by Marriott Siliguri, the 17th ‘Courtyard by Marriott’ branded property to open in South Asia and the first in the East of India outside of Kolkata.