People are realising they can't stay locked forever: Sudeep Jain of IHG

In a Q&A, the Southwest Asia MD of the hotel chain says sentiment in the hospitality sector is improving with the reduction in the number of Covid-19 cases and vaccination drive

Sudeep Jain, managing director, Southwest Asia, InterContinental Hotel Group (IHG) tells Shally Seth Mohile that occupancy for the hotel industry has seen significant sequential recovery. The reducing number of Covid infections and positive development around vaccination will boost confidence and help in a faster recovery. Holiday Inn and Holiday Inn Express, midscale brands of the hotel chain will drive the overall growth in the South West Asia. Edited excerpts:

How do you rate the recovery in the hospitality sector? What kind of impact will it have of the ongoing vaccination programme?

Things have been looking up month after month. December was better than November and this month better than last month. The occupancy across our 40 hotels in South West Asia, have been inching up. We were close to 50 per cent in December.

But the rates (average daily rates) have more or less remained the same. The positive news on the reducing number of Covid-19 cases and vaccination has helped improve sentiments.  People are realizing they cannot be locked out for ever and the appetite to go out is going up as compared to six months ago.

The propensity to travel will go up with the vaccination and will, it will change mindsets. 

 

The two largest segments-- outbound travellers and business travellers continue to be highly depressed and likely to remain the same in the foreseeable future, how are you offsetting it with other segments?

The social (MICE) segment that include weddings, birthdays, or other family functions, festivals etc have kept us going as people want to celebrate these occasions together with the near and dear ones. It’s doing really well. The staycation business is also doing very well. Agra, Jaipur, Goa and other leisure destinations also helping the industry stay afloat.

Can you touch upon IHG’s growth plans for the year ahead?

The last nine months have been unprecedented in terms of the challenges faced by our industry.  But despite that there have been enough hotel developers who have not halted any projects. While the year was bad for us, it wasn’t that bad and we managed to sign 900 odd rooms in the region. This is little less than the 50 per cent we would have signed in a year.

Which are the brands that will drive the growth in South West Asia?

Our strategy going forward will be to focus on Holiday Inn and Holiday Express. These brands are very good from the point of view of catering to domestic tourism. It also serves well from the capital allocation and space standpoint. They are also relatively easier for individuals and the corporates. The growth in the Holiday brands will drive the overall momentum. This doesn’t mean we will not expand in the luxury segment. We are always on a lookout for properties.

 

Has conversion (unbranded hotel owners joining hands with hospitality brands) gained traction in the last one year or so, how do you see the trend?

While there have been lot of inquiries for the same, it hasn’t translated into too many deals. I do expect it to happen in the months ahead. The quality of service which a branded chain of hotel can offer both in reality and in perception in people’s mind is a lot higher compared to a standalone non branded hotel. As an asset owner it makes sense to join hands and ride the perception. For an independent hotel there is a lot on one’s plate to manage the protocols and hygiene during a pandemic, which is why there are a lot more owners looking to join hands with branded chains. But this may not always work as people have deferred capex on renovation and maintenance due to the current scenario, this impacts the conversion cost of the property. Unless the owner makes that investment it may not be worthy for the brand to do the deal.