Hotel Management — March 2012
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Indian hoteliers face Western challenge
India has long been a provincial country, but its growing middle class and heightened demand for a variety of hotel product is spurring top U.S. brands to plant their flags
International Report – The Park Hotels in India has roots that date back a century. Today its 11 upscale hotels stretch from Goa to New Delhi as it now turns its attention to opening hotels in tier-one and tier-two markets.
Likewise, Taj Hotels, Resorts & Palaces has a storied Indian history. Incorporated by the founder of the Tata Group, Jamsetji Tata, the company opened its first property, The Taj Mahal Palace Hotel, in Bombay (now Mumbai), in 1903.
According to HVS’ 2011 “Hotels in India Trends & Opportunities,” as of August 2011, Taj Hotels boasts the highest supply of rooms in India, at just over 10,000. The Park Hotels, meanwhile, is farther down the spectrum with around 1,000 rooms.
Priya Paul is chairperson of Apeejay Surrendra Park Hotels. While she notices the advancement of international brands in India, she still feels that domestic Indian brands carry an advantage.
“Many international brands have entered the Indian market and many still seek to enter,” she said. “Obviously, the domestic brands already have a hold nationally and their understanding of the Indian market is higher. We understand the market in terms of the spending power of both domestic and international customers. We have a huge loyalty base.”
u.s. brands
But there’s no doubt the playing field is going to get even more crowded.
According to HVS, Starwood Hotels & Resorts Worldwide already has close to 7,000 rooms in India (second of any operator in India), and that number is sure to balloon. The company plans to open nearly 20 more hotels in India by 2015, said Simon Turner, president of global development for Starwood Hotels & Resorts.
Starwood, which currently operates 33 hotels in India, is well established in the region, with a legacy that dates back to 1973.
“India’s economic growth and the rise of its middle class have generated a keen appetite for high-caliber global brands,” Turner said.
Three W hotels will open in India beginning in 2015 (W Mumbai, W Retreat & Spa Goa and W Nida, Delhi NCR). Starwood’s St. Regis brand will enter India in 2016 with The St. Regis Noida, Delhi NCR.
Starwood’s select-service brands are also proliferating in secondary and tertiary markets, as is its Luxury Collection brand, which Turner said will have 10 hotels by the end of 2012, “making it the brand’s second largest market behind only the U.S.,” he said.
intimate knowledge
While domestic brands are girding up and international brands are moving in, one hotel company, with Indian roots, that until now has been U.S.-focused, is looking to make a splash in India.
Vikram Chatwal Hotels and its management arm Hampshire Hotels and Resorts, which manages brands under the Dream, Time, Night and Chatwal names, plans to launch 52 hotels in India in the next five years, under the Dream and Night brands. The aim is to operate 100 hotels in India within the next 10 years in partnership with Wyndham Hotel Group, which it has a franchise agreement with.
The group has already broken ground on two projects, a Dream hotel in Goa and a Night hotel in Chennai.
“We are looking to break ground on up to five additional projects in New Delhi, Mumbai, Bangalore, Hyderabad, Calcutta, Jaipur and Udaipur within the next three to six months,” said Sant Singh Chatwal, chairman and CEO of Vikram Chatwal Hotels.
Chatwal is convinced that his brands will succeed not only on their reputation, but also due to his heritage and know-how. “The current landscape in India does not hold an abundance of competition in our area of expertise,” he said. “There is a lack in the market for [our] particular style of hotel.
“Both my heritage and the intense need in the marketplace have played a huge role in the decision to undergo this aggressive expansion,” he said. “Our success in India stems from my internal knowledge of the Indian marketplace. It gives us an insider edge that sets us apart from other U.S. operators.”
China’s secondary cities have first-class potential
Many of China’s secondary cities—places not first on the list of recognizable cities to most of us—have upwards of five or six million residents. It’s only a matter of time before Chengdu, Xiamen, Tianjing, Ningbo and Nanjing (to name a few) are competing on the global scale with the likes of Shanghai and Beijing.
Hotel developers are taking note of these so-called secondary cities: STR Global tracked more than 315,000 rooms across 22 of China’s secondary cities (those with fewer than 10 million inhabitants) and reported higher year-over-year revenue per available room growth than the national average.
According to the data, the Chinese pipeline until 2014 will show growth across all secondary cities, with Sanya taking the lead at plus-50 percent, Xiamen coming in at plus-25 percent, Suzhou at plus-11 percent, Xian at plus-12 percent and Hangzhou at 9 percent.
Indian hoteliers face Western challenge
India has long been a provincial country, but its growing middle class and heightened demand for a variety of hotel product is spurring top U.S. brands to plant their flags
International Report – The Park Hotels in India has roots that date back a century. Today its 11 upscale hotels stretch from Goa to New Delhi as it now turns its attention to opening hotels in tier-one and tier-two markets.
Likewise, Taj Hotels, Resorts & Palaces has a storied Indian history. Incorporated by the founder of the Tata Group, Jamsetji Tata, the company opened its first property, The Taj Mahal Palace Hotel, in Bombay (now Mumbai), in 1903.
According to HVS’ 2011 “Hotels in India Trends & Opportunities,” as of August 2011, Taj Hotels boasts the highest supply of rooms in India, at just over 10,000. The Park Hotels, meanwhile, is farther down the spectrum with around 1,000 rooms.
Priya Paul is chairperson of Apeejay Surrendra Park Hotels. While she notices the advancement of international brands in India, she still feels that domestic Indian brands carry an advantage.
“Many international brands have entered the Indian market and many still seek to enter,” she said. “Obviously, the domestic brands already have a hold nationally and their understanding of the Indian market is higher. We understand the market in terms of the spending power of both domestic and international customers. We have a huge loyalty base.”
u.s. brands
But there’s no doubt the playing field is going to get even more crowded.
According to HVS, Starwood Hotels & Resorts Worldwide already has close to 7,000 rooms in India (second of any operator in India), and that number is sure to balloon. The company plans to open nearly 20 more hotels in India by 2015, said Simon Turner, president of global development for Starwood Hotels & Resorts.
Starwood, which currently operates 33 hotels in India, is well established in the region, with a legacy that dates back to 1973.
“India’s economic growth and the rise of its middle class have generated a keen appetite for high-caliber global brands,” Turner said.
Three W hotels will open in India beginning in 2015 (W Mumbai, W Retreat & Spa Goa and W Nida, Delhi NCR). Starwood’s St. Regis brand will enter India in 2016 with The St. Regis Noida, Delhi NCR.
Starwood’s select-service brands are also proliferating in secondary and tertiary markets, as is its Luxury Collection brand, which Turner said will have 10 hotels by the end of 2012, “making it the brand’s second largest market behind only the U.S.,” he said.
intimate knowledge
While domestic brands are girding up and international brands are moving in, one hotel company, with Indian roots, that until now has been U.S.-focused, is looking to make a splash in India.
Vikram Chatwal Hotels and its management arm Hampshire Hotels and Resorts, which manages brands under the Dream, Time, Night and Chatwal names, plans to launch 52 hotels in India in the next five years, under the Dream and Night brands. The aim is to operate 100 hotels in India within the next 10 years in partnership with Wyndham Hotel Group, which it has a franchise agreement with.
The group has already broken ground on two projects, a Dream hotel in Goa and a Night hotel in Chennai.
“We are looking to break ground on up to five additional projects in New Delhi, Mumbai, Bangalore, Hyderabad, Calcutta, Jaipur and Udaipur within the next three to six months,” said Sant Singh Chatwal, chairman and CEO of Vikram Chatwal Hotels.
Chatwal is convinced that his brands will succeed not only on their reputation, but also due to his heritage and know-how. “The current landscape in India does not hold an abundance of competition in our area of expertise,” he said. “There is a lack in the market for [our] particular style of hotel.
“Both my heritage and the intense need in the marketplace have played a huge role in the decision to undergo this aggressive expansion,” he said. “Our success in India stems from my internal knowledge of the Indian marketplace. It gives us an insider edge that sets us apart from other U.S. operators.”
China’s secondary cities have first-class potential
Many of China’s secondary cities—places not first on the list of recognizable cities to most of us—have upwards of five or six million residents. It’s only a matter of time before Chengdu, Xiamen, Tianjing, Ningbo and Nanjing (to name a few) are competing on the global scale with the likes of Shanghai and Beijing.
Hotel developers are taking note of these so-called secondary cities: STR Global tracked more than 315,000 rooms across 22 of China’s secondary cities (those with fewer than 10 million inhabitants) and reported higher year-over-year revenue per available room growth than the national average.
According to the data, the Chinese pipeline until 2014 will show growth across all secondary cities, with Sanya taking the lead at plus-50 percent, Xiamen coming in at plus-25 percent, Suzhou at plus-11 percent, Xian at plus-12 percent and Hangzhou at 9 percent.
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