New Delhi: India is one of the highest growth markets globally of Hilton Hotels and Resorts, said Navjit Ahluwalia, country head, Hilton India, which runs 17 hotels in the country. The firm wants to expand its portfolio at the right locations, he said.
“We will be doubling our portfolio in the next three years, focusing on key cities and upping our resort portfolio. We look at India not as a race but as a marathon where we’re just at the beginning. Our aim is to have high recall for brand Hilton for investors who are building new hotels," he said.
Ahluwalia, who has headed Marriot International, Oberoi Hotels and hospitality consultancy HVS during his three-decade-long career, talks about Hilton’s growth plans, key innovations and how the Indian traveller is evolving. Edited excerpts:
Asia Pacific (APAC), including India, is your fastest growing market. What are the key drivers?
The Asia-Pacific market has registered fastest year-on-year growth for us despite having fewer hotels. This is primarily because there are large economies in APAC that are growing at a fast pace. In markets like China and India, people are travelling across the world. China is the second largest lodging market globally after the US, and, over time, India will become the third largest, possibly in the next 10 years, because of our population and the growing middle class.
We have registered double digit growth in India in terms of revenue per available room (RevPAR), which is the strongest in five years. This is because the number of hotels in India is less. Thus, as the demand is growing, we are peaking in terms of occupancy, and this is driving the increase in our RevPAR.
How has the 28% goods and services tax (GST) for hotels with room rentals above ₹ 5,000 compared with the 20% in pre-GST era impacted your business?
GST has affected all hotel firms, thus ultimately it is not good for the industry. Travel and tourism is the largest employer in the service sector, and it hires people with minimal qualifications. Therefore, the hospitality sector should be a low-tax industry encouraging more investment. It has affected us, but the demand has not gone down. We are believed to be living in the golden age for travel, with more Indians taking breaks and holidays. GST has brought uniformity and transparency on room rates but the tax should have been lower.
Today millennials are seeking unique, personalised experiences. What are you doing to attract them to your hotels?
We know one size does not fit all, and that is why we have a variety of brands. Our new hotel brand Hilton Tru is targeted at millennials. It is an affordable design and experience-led brand, which is doing well in the US. Given India’s rising young population, we are looking to bring the brand to the country. Our Waldorf Astoria and Conrad brands are luxury-led, while Hilton is meetings-led.
Are the more personalized concepts such as Airbnb an increasing threat to hotels?
People are looking for different kinds of holiday experiences. Guest houses have been around for decades, but that does not mean hotels are not doing well. So, Airbnb has not taken anything away from us as they play in a different space. Not everybody who uses an Airbnb uses a hotel, and it also depends on the need of the traveller. If one is travelling with a big family group, they might prefer to live in an Airbnb. I believe the two models co-exist.
What are some of the new innovations you are working on?
We have an innovation lab at the Hilton headquarters in Mclean, Virginia, which constantly studies hospitality trends. Digital keys and connected rooms are two digital innovations introduced in our hotels. Our patrons can use their smartphones to open their rooms. Through an app, guests can order room service and even adjust lighting in the room. They can use their Netflix account to watch movies on television. The objective is to offer personalized experience.
What are the key consumer trends in the hospitality industry?
Earlier, families took one vacation a year. Summer break meant going to grandparent’s house. This is changing, with many Indians not only taking domestic but also international vacations. Indians are also taking mini breaks; so, on long weekends, hotels are sold out. In fact, people are also becoming adventurous—a sector where the growth is exploding.