Companies

‘India is one of our fastest growing markets’

R Ravikumar Chennai | Updated on December 02, 2014 Published on December 02, 2014




Simon F Cooper, the man at the helm of Marriott International’s Asia-Pacific business, visits India more often than any other country in the region. He says India is one of the fastest growing markets for the hotel company. In an interview to BusinessLine, he said Marriott has a pipeline of projects coming up in various cities in the next five years. It currently has 25 hotels with an inventory of more than 6,000 rooms across brands such as Ritz-Carlton, Renaissance, JW Marriott, Marriott Hotels and Resorts, Courtyard by Marriott and Fairfield. Excerpts:

At a time when the hospitality industry here is going through a rough patch, you have launched half-a-dozen hotels in the last one year. How would you rate Marriott’s performance in India?

India is one of the fastest growing markets for us in the world. We have been doing pretty good. Interestingly, close to 65 per cent of our business here comes from domestic travellers. We have 25 properties now, spread across luxury, upscale business class to limited service budget segment. We have another 45 properties with over 9,000 rooms in the pipeline. At least 25 of them will be up and running in the next two years.

But, in general, room rates are bottomed out….

I hope it will improve henceforth. Now there is only one way, up. But, as far as Marriott is concerned, we have been consistently growing year-after-year. Most of our properties register upwards of 20 per cent organic growth — what we call same store sales in the retail industry parlance. Right now, occupancy drives our growth. But over a period, the rates will also get better.

Where does India stand in terms of foreign tourist arrivals?

India received less than seven million foreign tourists in 2013, which is far fewer than other Asian countries such as Thailand and Malaysia.

What according to you are the stumbling blocks for inbound travellers?

There are several reasons. I would say lack of tourism products and your archaic visa regime are the major reasons. There are several beautiful destinations here, such as the Himalayas, Kerala, Goa and some North-Eastern States, where you need to create enough tourism pockets, preferably in the mass market segment.

The number of quality hotel rooms is not adequate. You have only one lakh branded hotel rooms, as compared to two million in China and over five million in the US. If we talk about the visa regime here, I would say India is by far the most difficult country to visit. It remains a major barrier to attract tourists from international feeder markets. Even from the security point of view, there are several countries which are far more secure, but getting a tourist visa to those courtiers is not as difficult. If we consider the global MICE (meetings, incentives, conferencing and exhibitions) market, much smaller countries such as Singapore and Malaysia are doing far better. India’s share of global market is hardly 2 per cent in this segment.

Of course, the new visa rules announced by the Government would go a long way in improving the situation. It will remove the travel barriers to a considerable extent.

Don’t you think Indian hotels are more expensive than their counterparts in neighbouring countries such as Malaysia, Indonesia and Thailand?

Yes, it is. As far as I know, there are three major reasons that make Indian hotels more expensive to stay in. Primarily, to build a hotel here is an exorbitant affair. Land cost is very high. And, we have to build a duplicate system for everything. For example, we have to build a duplicate power system. There is a need to build a parallel system for water. Besides, financial institutions here do not offer loan for beyond 10-12 year term, as against 20-25 year term in any other part of the world. The banking system has to recognise the industry.

Published on December 02, 2014
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