Home / Companies / News /  ‘Timelines for hotel projects in India longer than elsewhere’

New Delhi: A hospitality firm IHG Hotels & Resorts is optimistic about India given that its growing economy has raised disposable incomes in the country. The company that runs Holiday Inn, Holiday Inn Express, Crowne Plaza, Hotel Indigo, InterContinental and Staybridge Suites is sharpening its focus on the country, expecting its ongoing infrastructure development will result in a proliferation of hotels.

IHG’s renewed focus on rising travel and tourism in India comes at a time the country’s hospitality sector has clocked a record peformance in FY23.

“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," Kenneth Macpherson, IHG’s chief executive officer for Europe, Middle East, Asia and Africa (EMEAA) said in an interview.

However, the duration of hotel project construction—from the time they are initiated, to when they are finished and the assets open up—is longer in India than other EMEAA markets, Macpherson said, adding that these challenges, though, are quite similar to those in other high-growth markets.

In 2021, a top IHG executive had told Mint in an interview that the company would bring its Regent, Kimpton, Vignette Collections and Voco brands to India; however, so far, only two hotels of Voco—an upscale lifestyle brand—have been signed here, which will come up at Uttarakhand’s Jim Corbett Park, and Gurugram. IHG now has 43 hotels under five brands in the country, adding four hotels since December 2021 to its India portfolio.

On being asked about the company’s slower growth in the region compared with rivals such as Marriott and Wyndham, Macpherson said IHG’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 7,500 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," he added. According to industry estimates, India has about 150,000 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 in India, 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 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.

In the next two-three years, the company plans to add another 52 hotels in South-West Asia, of which 42 hotels will be added to its portfolio in India. At a global level, in the second quarter of 2022, its total revenue in India exceeded 2019 levels with occupancy levels up from 60% in Q1 to close to 75% in Q2 this year.

Varuni Khosla
Varuni Khosla is a journalist with close to 14 years of experience in writing business news stories for mainstream newspaper companies like Mint and The Economic Times. She reports and writes on luxury and lifestyle brands, hospitality and tourism news, the business of sports, the business of advertising and marketing and alcohol brands.
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