InterContinental Hotels Group (IHG) has been present in India for almost four decades. It has a plan for 41 new projects in India in the next couple of years, to add to the existing 10 properties. This expansion is expected to gather steam in the coming years, Jan Smits, Regional Managing Director, IHG Asia Australasia, tells Atanu Kumar Das in an email interaction. Edited excerpts:
How has the year 2009 been for IHG in India?
The past two years have been full of challenges for Indian hospitality. Despite the slowdown in the economy, IHG is experiencing fast growth in India. The outlook for India’s tourism and hospitality industry remains robust. For IHG, we remain positive and are focused on opening new hotels. Our ambition for India is to build a profitable portfolio of hotels and our pipeline will definitely increase. What gives IHG an added advantage is its Holiday inn brand, which provides a mid-scale full service segment that has the biggest opportunity for growth.
What is your group’s India plan for this calendar year?
A confirmed development pipeline of 41 hotels to be opened over the next couple of years across major metros and secondary cities. We are driving growth through the three brands, each meeting the demand of a different market segment — InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts and Holiday Inn Hotels & Resorts. We are opening Holiday Inn International in Mumbai Airport by the end of this year. Some of our hotels opening in 2010 are Crowne Plaza Bangalore, Crowne Plaza Okhla New Delhi, InterContinental Mayur Vihar (Delhi), Holiday Inn Cochin, Holiday Inn Pune and Holiday Inn Mayur Vihar (Delhi).
How do you view the hospitality market in India?
The Indian hospitality industry is projected to grow at a rate of 8.8 per cent during 2007-16, placing India as the second-fastest growing tourism market in the world. Initiatives like massive investment in hotel infrastructure and open-sky policies made by the government are all aimed at propelling growth in the hospitality sector. India’s hotel pipeline is the second largest in the Asia-Pacific region and the largest after China, making up 23 per cent of the total projects in the region.
How big is the India market for IHG?
India is emerging as a strong source market for IHG. Demand for both domestic trips and outbound travel is expected to increase strongly, due to affordability and changing attitudes among Indian consumers. This benefits our hotels both in India and globally. Even while international business and corporate travel has taken a hit, India has a very strong domestic leisure and corporate market going, which continues to drive the growth rate.
The domestic hospitality sector is expected to see investments of over $11 billion (Rs 50,000 crore) in the next two years, with 40 international brands making their presence in the country in the next few years. Additionally, the upcoming Commonwealth Games 2010, in New Delhi will give a strong impetus to the hospitality sector. New Delhi alone accounts for over 6,000 rooms under construction for the games.
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What initiatives would you like the government to take which helps the hospitality sector?
Rapid improvements in infrastructure can help provide better accessibility and ambience, that in turn leads to more footfall. The Government of India has increased spending on advertising campaigns to reinforce tourism in India including the ‘Incredible India’ and ‘Ahithi Devo Bhava’ campaigns, which is a welcome initiative. At the same time, the government should also focus on promoting India as an ideal MICE (Meetings, Incentive, Conventions and Exhibitions) destination.
The industry faces acute shortage of skilled manpower, with an estimated requirement of 6.5 million professionals. Initiatives in setting up high-calibre educational institutes that offer hotel and hospitality management should be taken up.
Where does India stand for IHG, compared to other Asian countries?
India is an important market. Our strategy is to strongly position each of the IHG brands in the market. IHG is going very aggressive with its development pipeline, given that India is one of the fastest and globalising economies in the world.