Hyatt set to expand India footprint by 70% in 2 yrs
Hyatt Hotels Corporation plans to expand its footprint in India by over 70 per cent by 2023 as it seeks to make the most of the resurgence seen in the hospitality sector after a lacklustre 18 months, said the company’s senior executive.
Notwithstanding the pandemic and the impact it has had on hotel operations, large hospitality chains in India, including Indian Hotels, ITC Hotels, East India Hotels, Marriott International, among others, have been signing up new hotels and adding to the number of keys, particularly in the leisure category that has seen a bounce-back of late on account of ‘revenge travel’.
“India is the fourth highest represented county in our global development pipeline. There is a lot of interest in this market,” says Peter Fulton, group president for Eame/southwest Asia.
India, as a market, has been resilient. The occupancies have been good, pointed out Fulton, adding, “Unlike other markets, as soon there is an issue here, people drop rates to stimulate demand. That doesn’t help.” The swift devastation brought on by the second wave brought an already crippled hospitality industry to its knees. Occupancy plummeted. But revival thankfully is on the move, adds Fulton. Hyatt’s average occupancy across the country is over 50 per cent. He expects it to improve further in the months to come.
The American hotel operator - that manages and franchises hotels - has charted an expansion plan, even as operations at its flagship hotels in Mumbai and Delhi remain affected owing to the financial crunch facing Asian Hotels (West and North respectively) its asset owners.
The Hyatt Regency in Mumbai has been shut since June 7 as Asian Hotels (West) failed to pay salaries. Fulton says Hyatt is in constant dialogue with the owners and is hoping to resolve the issue in a few months.
Hyatt Delhi, too, is facing problems. Hyatt is a management company providing services through its reservation network and sales and other channels to individual hotels it manages and charges a fee for the same. Hyatt had to suspend reservations for Hyatt Regency Delhi on its booking systems as it hadn’t received a fee for the services it offered from the asset owners “over a fairly extended period of time”, says Fulton. While the hotel still operates, it’s not taking bookings on its systems yet.
“It's an unfortunate circumstance and we're working very closely with the owners as we negotiate the way forward and are hoping that Hyatt Regency Delhi will be back on the distribution platform soon. I have worked there in the late 90s/early 2000s,” says Fulton.
As part of the expansion plan, Hyatt will enter 12 new markets and add over 3,800 keys to its existing 7,000-plus keys and a portfolio of 31 Hyatt-branded hotels across eight distinct brands in the country. This will take the number of Hyattbranded hotels in India to more than 50 by the end of 2023. A third of the expansion will take place in leisure destinations that have seen a bounce-back, says Fulton. The trend, he points out, is in line with most of the other regions he oversees.
According to Nandivardhan Jain, chief executive officer at Noesis Capital Advisors, very few greenfield projects have come up. Quite a few international brands have come up with conversion-friendly formats. This allows them to expand at a faster pace.
It gives independent hotels and small chains the opportunity to become part of the global Radisson Hotel Group platform and benefit from international exposure, with the freedom to maintain their own unique style and identity.
The trend, he pointed out, is an opportunity for standalone unbranded hotels to become part of a large international hotel chain, gaining from the hotel operators’ vast distribution network with minimum upgrade.
“We expect this to gather momentum as hotel operators get a lot more flexible,” says Jain. This will overall be a win-win for asset owners, brands, guests, and good for the overall ecosystem, he adds.