British hotel and restaurant group Whitbread, which owns budget hotel chain Premier Inn and coffee chain Costa, believes India will be a strong economy in the medium term.

Asked about the challenges the hotel industry here is facing, Whitbread CEO, Andy Harrison, said India was a priority market and the company was betting big on the growth of the economy and its fast growing middle class, which will be increasingly looking to stay in mid-market hotels.

The company has invested about Rs 300 crore on building five hotels in the country under its economy brand Premier Inn but will be betting on management contracts for faster expansion as land costs hit the roof, besides the long process involved in acquiring land and building hotels.

“In the future, we would be focusing on partnering with developers, land owners or companies with land banks. We would look at expanding through management contracts,” he said. The company has two operational hotels at Delhi and Bangalore, while three are under construction, while it has long-term plans of running 70-80 hotels.

He said the firm would continue to be open to strategic investments and non-exclusive alliances with developers.

Meanwhile, through its franchisee agreement with Devyani International, the British company plans to increase Costa’s footprint to 300 outlets by 2015-16, from about 100 outlets as of now.

Talking about the tweaks done for its brands in India, Harrisson said the core DNA of Premier Inn offering a bed, a good night’s sleep and quality rooms remains unchanged. The chain has adjusted the food and beverages offering to suit local taste.

Asked about growing competition in the coffee chain segment, Harrison said the entry of new players such as Starbucks would help the category grow.

Meenakshi.v@thehindu.co.in

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