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International hospitality major, IHG Hotels and Resorts is witnessing a demand revival in India, with occupancies picking up to 70 per cent. While occupancies are “at pre-Covid levels”; tariffs are yet to reach the previous high, remaining 15-20 per cent lower than 2019 levels.
India continues to be amongst the fastest growing markets for the hospitality major that manages and owns 6,000 hotels globally.
Revenue per available room (RevPAR) — calculated by multiplying a hotel’s average daily room rate by its occupancy rate or by dividing total room revenue by the total number of rooms available in the period being measured — is expected to improve for the full year 2021, and further in 2022.
Domestic travel increases
According to Sudeep Jain, Managing Director, IHG Hotels & Resorts, South West Asia, domestic travel is currently boosting numbers for the company — which manages 41 properties — across brands like InterContinental, Holiday Inn, Holiday Inn Express and Crowne Plaza.
Corporate travel, although slow, is witnessing a project-driven pick-up.
“Domestic travel, which accounts for 75 per cent of our occupancies, are up. Corporate travel is picking up slowly, but it is driven by project work, that is people travelling for completion of specific projects. International travel is currently driven by NRIs — who are visiting relatives in India — and not international tourists. That is likely to happen in 2023 during the January- March period; the same time around which corporate travel would be up,” he told BusinessLine .
“RevPAR improvement is expected in 2023. But yes, 2022 and 2023 are likely to be the years which see improvement in tariffs, addition of properties, new deals and so on,” Jain added.
Two new properties — one each at Candolim (Goa) and Chandigarh — were added earlier this year; while the Dhaka (Bangladesh) hotel is expected by the end of 2021.
Deals — or signing up for new properties — continue to be “lesser than 2019 levels”. Against 9-10 deals being signed in every pre-Covid year, the company is now signing 5-6 deals. This year, it has made five so far. Hotels will mostly be under management contract or franchisee models.
New properties
With the demand scenario improving and domestic travel back, IHG Hotels & Resorts plans to add at least four of its upscale and luxury brands to the India portfolio. These include Regent, Kimpton, Vignette Collections and Voco.
“In the next two to three years, either one or all four brands will be introduced. There is a growing market, with discerning customers . We feel there is scope for expansion beyond our essential brands — Holiday Inn and Holiday Inn Express,” Jain said.
Incidentally, the company has already signed deals for two of its other global brands — Hotel Indigo, at par with Crowne Plaza, in Mumbai; while a premium Staybridge Suites property is expected to come up in Bengaluru.
Earlier this month, IHG Hotels & Resorts launched the Six Senses Fort Barwara in Ranthambore (Rajasthan), which is its ultra-luxury, boutique offering.
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