‘Timelines for hotel projects in India longer than other countries’

New Delhi: Hospitality firm IHG Hotels & Resorts, which runs brands like Holiday Inn, Holiday Inn Express, Crowne Plaza, Hotel Indigo, InterContinental, and Staybridge Suites, is looking to open more of its brands in India as the hotels industry sees a revival in demand in FY23.

The company said the sustained economic activity and GDP growth will drive travel and tourism across the board here, and it is strengthening its focus on the Indian market on the belief that the resultant infrastructure development from the economic stability is going to result in a proliferation of hotels.

Kenneth Macpherson, IHG Hotels' chief executive officer told Mint that he is optimistic about India as the GDP growth has had an impact on the improved disposable income and the general growth in the domestic economy.

“India is one of our priority markets. As we have seen in the last year or so, the demand for hotels is outstripping supply and this is a market we need to be thinking about now and double down on the investments that we’re making here and the plans that we’ve got to build India for the long term,” said Macpherson.

He said the time frame for hotel project constructions from the time they are initiated, to when they are finished and when the assets open up has a longer timeframe than other markets he looks at. But he said these challenges were very similar to other high-growth markets.

In 2021, the company had told Mint that it would bring the Regent, Kimpton, Vignette Collections and Voco brands to India but so far only two Voco hotels --an upscale lifestyle brand-- have been signed here. It now has 43 hotels under five brands in the country, adding four hotels since December 2021 to its India portfolio. These two hotels will be in Jim Corbett, Uttarakhand and Gurugram.

On being asked about a slower growth rate in the region, as compared to its counterparts like Marriott, Wyndham, he said the company’s growth rate from 2016 to the end of 2022 in terms of operating hotels was about 10% a year in terms of number of hotels and 11% a year in terms of number of rooms, giving it about 7500 rooms in the country. 

“Our desire is to bring those brands to India but we will want them to be absolutely in the right locations and markets for the right customer segment. But we feel this is a sustainable growth. As compared to our counterparts, we are actually closing the gap and are growing faster than them in terms of operating properties,” he added.

According to industry estimates, India has about 1.5 lakh branded rooms in the starred hotels category.

From a performance point of view, the company said it has surpassed 2019 levels in terms of its operating performance at almost all its properties here and that the hotels are starting to see the early return of domestic corporate business and some level of international corporate traffic as well. The company expects a sharp increase in the average daily rate -- a metric used to measure a hotel’s rate performance -- at a faster pace than the occupancies.

“We have a good growth cemented in the next three years across the brand segments with it being cemented in the mainstream essentials, the Holiday Inn family of brands,” he said.