Marriott, the world’s largest hotel chain, plans to add 100 properties in India by 2025. Hilton, the third biggest, wants to double the number of hotels in three years. And more international hotel groups are expanding beyond the country’s metros.
French hospitality group Accor is focusing on developing economy- and mid-scale brands primarily in Tier-II and III cities through franchises in a country it deems a key growth market.
For premium brands, the company is focusing on Tier-I and II cities under management contract, with the possibility of considering franchises.
"We have launched Novotel Mumbai and Ibis Thane in FY23 Q1 and have Novotel Jaipur and Ibis-styled properties in the pipeline for Q4,” said Puneet Dhawan, Senior Vice President of Operations, India and South Asia.
Hotels on a swing with 19,000 signings last year and over 7,000 lined up for 2023: Report
“Our latest signing is Fairmont Agra, which is set to welcome guests by 2025. The goal is for Accor to have a presence in India equal to that of China in terms of the number of hotels operated," Dhawan told Moneycontrol.
Singapore-based hospitality chain Ascott's acquisition of global serviced apartment provider Oakwood last year helped it expand in the Indian market.
"In India, with the Oakwood acquisition, Ascott has now six properties (from two earlier) in its current portfolio across the cities of Bangalore, Hyderabad, Pune and Chennai," said Vincent Miccolis, Managing Director of Middle East, Africa, Turkey and India, Ascott Limited.
He added that the company planned to launch four more properties in Gurugram and Goa along with six other new ones across Bangalore, Hyderabad and Vizag, including Citadines Arpora Nagoa in Goa and Citadines Paras Square Gurugram by July and October this year, respectively.
Ascott Ireo City Gurugram along with Oakwood properties will launch in 2025.
During his India visit, Marriott International’s Chief Executive Officer Anthony Capuano said the company was focusing on advancing development in secondary and tertiary markets to attract both business and leisure visitors.
Hilton, world's third largest hotel chain, plans to double India footprint in 3 years
Marriott has launched its brands in locations such as Mussoorie, Pushkar and Shillong where it was the first international brand. It has plans to launch brand Moxy in India with the anticipated openings of Moxy Bengaluru Airport Prestige Tech Cloud and Moxy Mumbai Andheri West in 2024.
Bullish on India
For Hilton, India has the potential to become the third-largest lodging market in the world because it is undersupplied given the population.
Hilton Asia Pacific President Alan Watts told Moneycontrol recently that India has been a key market for international brands, with a huge and lucrative domestic travel market that recorded 700 million trips in 2022.
“India is the opportunity and we have a long view and that view is bullish. It is India's time to shine," he said.
Accor's rosy outlook on the Indian market is based on factors including its growing middle class, improving infrastructure and increasing connectivity, said Dhawan.
Hyatt has been expanding its presence in the Indian market and bullish about its growth prospects for several reasons, including the fact that India is one of the largest and fastest-growing major economies, said Sumit Kumar, General Manager, Hyatt Regency Dehradun.
Kumar added that the Indian travel market was growing exponentially in the post-Covid phase. Being a country with diverse cultures makes it a popular destination for travelers from the United States, Europe and Asia, he said.
Tremendous opportunity
"The Indian economy is thriving, with a young and growing middle-class driving consumption across multiple sectors, including hospitality. This trend has caught the attention of global hotel chains, who are optimistic about the Indian market. Despite having only 170,000 rooms in the branded space, which is less than 17 percent of the total room inventory, there is a tremendous opportunity for growth and investment in the hotel industry, said Nandivardhan Jain, CEO of Noesis, a hospitality consulting and hotel investment advisory.
Jain added that demand for global hotel chains in the Indian market was evident from the fact that many top brands have established full-fledged offices in the country and have a robust supply pipeline to support future growth.
In 2022, hotel companies had 20,000 plus rooms with domestic ones holding a market share of 56 percent and international ones accounting for 44 percent, according to a Noesis analysis.
Indian Hotels Company (IHCL) emerged at the top in terms of expansion with 3,471 rooms signed followed by Marriott with 2,324 and Hyatt with 1,765 rooms.
Last year, more than 150 new hotels opened across India, resulting in a total of 11,000 plus new rooms becoming available for travelers, Jain said.
"The hotel industry in India is expected to continue its growth trajectory, with a projected 10 percent increase in hotel signings and openings in 2023 compared to 2022. The hotel industry in India is expected to continue to attract investments," he said.
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