Radisson Hotel Group to make deeper inroads into tier-4 and 5 towns

The multinational hotel chain to open 12-15 hotels each year for 5 years

Radisson Hotel Group has embarked upon an aggressive expansion plan for the Indian market as it seeks to make deeper inroads into tier IV and V cities and towns, said the hospitality company's senior executive on Monday.

The Minnesota-based multinational company claims to be the first international hotel chain to identify tier II, III, and mid-segment markets as potential growth engines. The group draws half of its revenue from these markets.

Radisson joins a host of other hospitality chains, including Hyatt Hotels Corporation (or Hyatt Hotels & Resorts), ITC Hotels, Indian Hotels Company, EIH Associated Hotels (formerly East India Hotels), among others, adding hotels to their portfolio at an aggressive pace, even as the hospitality sector is in the midst of an unprecedented slowdown due to travel restrictions and work-from-home trend.  

 As part of the expansion plan, the hotel operator will add 15 hotels this calendar year and 60 hotels - 12 to 15 each year - for the next five years, said Zubin Saxena, managing director and vice-president-operations, South Asia, Radisson Hotel Group. The addition will take the total number of hotels operated by the group from the current 100 to 175. The plan also includes adding six upscale resorts in high-demand leisure destinations in 2021.

"A few days ago we opened our 100th hotel in Bhopal. It's a huge milestone for us. If you were to plot India from East to West and North to South, you will find a Radisson every five hours," said Saxena, adding that the hospitality firm plans to continue the growth trajectory and will be coming up with a "brand-defining experience".

The hospitality sector, he added, is seeing swift recovery in demand since the second wave of the pandemic ebbed. If there is no third wave, the occupancies will come closer to pre-pandemic levels of 75 per cent for the hotel. Presently, it is 48 per cent.

The hospitality industry in India witnessed a growth of 84.7 per cent in revenue per available room (RevPAR) in the second quarter (Q2) of 2021 (April-June), compared to Q2 of 2020, according to property consultant JLL India.

However, on a pan-Indian level, there has been a 53.9 per cent decline in Q2 of 2021 RevPAR, compared to the first quarter of 2021, because of restrictions imposed due to the second wave of the pandemic.

A few destinations where Radisson is set to operate the hotels include Kufri, Rewa, Pahalgam, Nashik, Pondicherry, Nathdwara in Rajasthan, to name a few. The expansion will be a mix of brownfield and greenfield. It will also include standalone hotels willing to sign up and be a part of the hotel chain.

Meanwhile, the owner of Radisson Blu, Park Plaza, Country Inn & Suites by Radisson, among other brands, is also looking to spruce up its food and beverage (F&B) business with a pan-Indian expansion of Meetha, the brand it launched in November, marking its entry into the branded Indian mithai segment. It recently inaugurated a flagship store in Mumbai and will subsequently expand to Bengaluru, Hyderabad, and Pune. It has also forged an alliance with Massive restaurants as a step towards strengthening F&B capabilities and creating its hotels as ‘social hubs’.

The Radisson plan

• To add 60 hotels to its folio of 100 hotels in 3-5 years
• Most expansion to take place in Tier IV and V cities
• Expansion includes 6 six upper scale and upscale resorts
• Expects room occupancy to touch 60% in 2021