Hotel chains, both domestic and global, have been looking for expansion in India's tier II towns for a while now. These locations are leisure getaway destinations which act as satellites to larger cities
NEW DELHI: Hospitality chain Hyatt said it plans to open over 20 new properties in India over the next three years, of which some will be managed by Hyatt and for others, it will enter into franchise agreements where it licenses the brand.
The hospitality firm's India portfolio comprises 32 hotels across eight brands - Andaz, Alila, Park Hyatt, Grand Hyatt, Hyatt Regency, Hyatt, Hyatt Centric, and Hyatt Place.
"We entered India in 1982 and kept our property count to five or six hotels until 2005. In the next three years we are looking to open over 20 hotels which will take our overall presence to over 50 hotels. It will open up new markets, expand our footprint in leisure destinations and bridge key gaps in larger markets," said Dhruva Rathore, vice president real estate & development- India, Hyatt.
Of the 20, the company said it will open three Hyatt Centric properties in the next two years. In Delhi, The Piccadily Hotel will be rebranded as Hyatt Centric while Chandigarh and Bengaluru see the premium and upscale brand introduced with 150 to 200 keys.
The remaining properties will be opened under the company's sub-brands Hyatt Regency and Hyatt Place. These will be evenly distributed between leisure destinations such as Kasauli, Kerala, Udaipur, and business destinations such as Bangalore and Delhi. These hotels will be intimate, small-scale properties ranging from 100 to 200 keys.
"The size of a hotel is a function of the customer segment travelling there. Some of these leisure destinations will be frequented by families, couples and small groups. We don't need big inventory or banquets. Jaipur, for instance, is an exception where we expect people to travel in large groups for weddings or corporate purposes so the upcoming Grand Hyatt will be a 200 keys property," said Rathore.
Hotel chains, both domestic and global, have been looking for expansion in India's tier II towns for a while now. These locations are leisure getaway destinations which act as satellites to larger cities, and also serve business travellers, given the growth coming from non-metros, said Rajat Mahajan, partner, Deloitte India.
He said covid-19 led to some interesting trends with respect to holiday homes, leisure outings and has triggered a big long-term change towards cleanliness, sanitation and hygiene across the country, which may aid the expansion rationale. “This might be the right timing for industry players to make the expansion move, given there is a significant availability of hospitality properties in small towns as the valuations are favourable for both land acquisition and buy-outs in the range of ₹50-100 crore," he added.
For Hyatt, the expansion will include opening up brand Hyatt Place in secondary and tertiary western and southern markets, led by growth of industrial cities such as Vadodara, Kolhapur, Trivandrum, Aurangabad and Vijaywada. "These destinations map the states that are driving India's economy such as Gujarat, Maharashtra, Karnataka and Tamil Nadu," Rathore said.
Hyatt said demand coming from these markets is a function of urbanisation, connectivity and economic growth.
"Our brand Regency is also expected to do well in secondary cities which are affluent and have the spending capacity especially in the wedding segment. We have achieved similar success in cities such as Lucknow and Chandigarh," Rathore added.