Hotel chain Marriott International Inc., which is starting a major integration programme after its acquisition of Starwood Hotels and Resorts, said it would look at bringing more global brands from the combined entity to India to raise its market share in the domestic hospitality sector.
Last year, the US-based hotel firm acquired Starwood Hotels for $13 billion, making it the largest hotel chain in the world with over 5,800 properties in more than 110 countries.
Following the acquisition, Marriott, with around 18,500 rooms in India, overtook the Taj Hotels, Resorts and Palaces to become the country’s largest hotel company. It currently operates 84 hotels under 15 brands including Ritz Carlton, JW Marriott and Courtyard by Marriott across 19 cities. The company plans to open around 17 new properties, taking the total number to around 100 by the end of the year.
In an interview, Marriott International’s chief operating officer Asia Pacific (excluding Greater China), Rajeev Menon said the company is currently studying the market to bring its millennials- focused global lifestyle brand Moxy Hotels to India, apart from looking for opportunities to introduce other brands as well. Globally, Marriott operates 30 hotel brands.
Launched in 2014, Moxy Hotels is a lifestyle hotel brand created by Marriott targeting younger customers. This month, it will open a Moxy hotel at Bandung in Indonesia, its first in Asia. Tokyo and Osaka in Japan are next in line.
“Our existing brands in India are very well-positioned. They drive considerable premium but there are opportunities in certain segments where we would consider bringing new brands. For example, in the moderately priced space in the lifestyle segment, we are looking at bringing Moxy, but we got to make sure that we get the right deal before we make those announcements,” Menon said.
He said Marriott is in the early stages of doing research on the possibility of bringing the brand to India and is already in discussions with hotel partners for the purpose.
“I see opportunity with regard to addition of a number of brands, but it has to be viable for us to bring that brand...The brand (Moxy) is starting to get traction in Asia and we believe that India also has the opportunity but we need to design something that fits in the Indian context, which could mean some marginal changes. We are working our way through it,” Menon said.
The company is currently in the middle of integrating both organizations. It has restructured its leadership teams post the acquisition and is currently focused on integrating the systems and loyalty programmes of Marriott and Starwood. Menon said the three main objectives through the integration exercise, which is likely to take over two and half years, are to bring resources close to the ground, make sure the best talents from both the houses lead the organization and minimize disruption.
“ Through hotels that we are operating in the combined entity, we want to drive more market share premiums. We already drive a very strong market share premium. We want to see that move up,” he said.
“Markets are expanding. So, hotels bring in more brands purely to grow their business,” said Mandeep Lamba, managing director (hotels and hospitality group-India), JLL India, a property consultant. “There are many rationales for bringing brands. One of them is, operators want to have brands for every possible market... Also, our tier II and III cities are getting active. Especially in Tier III cities, sometimes you can’t put bigger brands. Therefore, operators want to put some of their more affordable brands,” he said.