India remains a ‘shining star around the world’ in terms of growth opportunities for Marriott International, said a top executive at the planet's largest hotel chain by way of number of rooms.
About 80% of the new deals in India are in the luxury and premium space for Marriott, which was a bit different pre-Covid, said Rajeev Menon, president, Asia Pacific excluding China, Marriott International.
“Prior to the pandemic, we were seeing growth in the upscale segment and for brands such as Courtyard and Fairfield by Marriott. We have been in this country for 25 years and we will open our 150th Marriott hotel in Katra next month close to the Vaishno Devi temple. This will be the first five-star hotel in Katra,” Menon said.
“We have signed a new JW Marriott Resort & Spa property for Alibag. Our Ritz Carlton hotel, that we signed in Jaipur a few weeks ago, will be another stunning 250 keys hotel spread over 43 acres of land. We have 80-plus hotels under construction and are comfortably positioned to operate 250 hotels and 50,000 keys in India in the next five years,” he added.
Menon said Marriott remains bullish on the long-term prospects as the Indian economy transitions from being the fifth largest in the next five years to being the third largest economy in the world.
Marriott International has signed 30 deals in South Asia encompassing over 5,000 keys since last year and the year to date so far. Out of 30, 28 deals are for India.
Shawn Hill, chief development officer for Asia Pacific (excluding greater China) at Marriott, said while the company expects to hit all-time high signing records in India this year, it would also like to see a bit more relaxation in the lending environment and some relaxation in terms of the number of permits required to build hotels.
“I think it takes about 100 permits to get a hotel operational here. That’s different from what we see in other markets. The land costs and construction costs are quite high,” he added.
Menon said the company has been pushing for improving the licensing and lending environment and for single-window approvals collectively alongside the industry as well as individually for some time and it is something it needs to continuously work on.
“We have also been talking aggressively about getting infrastructure status for the industry in most states. Because that will help the environment from a lending point of view. I keep getting asked this question: how do we justify rates in India being on a record high?” he said.
“You have to compare this to mature markets in the West, and how loans are given for a long period of time. In India, with high land costs, you are only getting 15 year loans and at best, interest rates are still around 10.5-11%. When you look at the financial model it does become difficult and If your hotel takes four five years to build, it adds to the overall challenge from a financial sustainability point of view,” he added.
Marriott is present in more than 40 Indian cities and has opened new hotels in Gorakhpur, Siliguri and Shillong. It saw a 35% growth in revenue per available room in India last year over 2019 levels and is experiencing double-digit growth this year as well.
By Anumeha Chaturvedi
https://economictimes.indiatimes.com/epaper/delhicapital/2024/apr/08/et-comp/marriott-sees-india-as-a-shining-star-for-growth-opportunities/articleshow/109113579.cms
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