Luxury hotel rates in India lag other markets, says Accor's Mark Willis

India still needs to catch up with other markets in terms of the rates the hotels command. He also touches upon the expansion plans

French hospitality major Accor has just expanded its luxury footprint in India with the signing of Fairmont Udaipur with Keystone Resort. Set to open in 2024, the ‘upper upscale’ brand is expected to be the go-to destination for mega Indian weddings and corporate off-sites. Mark Willis, CEO, India, Middle East, Africa and Turkey, tells Shally Seth Mohile that most Accor brands in India have surpassed the pre-pandemic years in terms of average daily rates. However, India still needs to catch up with other markets in terms of the rates hotels command. Edited excerpts: 

How has the overall region (Middle East, Africa, Turkey and India) performed in the post-pandemic period?

Every area I cover has outperformed 2019 by some margin. As a whole, we are 30 per cent over 2019 with the exception of Africa. We have a very heavy portfolio in French-speaking Africa that has recovered well. The sub-African region is the only one that has been very slow. The pandemic hit that area really late and subsequently it is recovering late.

You mentioned that India, as a market, still lags behind other countries with regard to average daily rates. What is the reason?

It’s an anomaly. There is no specific reason. Some bit of it is historical — the way you start with a rate. Here, there is an apprehension to be aggressive with the rate. Mumbai and Delhi are in the same league as New York, Hong Kong, London and Paris. Still the rates they (Delhi and Mumbai) command are behind by at least 30-40 per cent. The rate in the luxury segment here is $150-$180 while in London it is $400-450 — that’s a big difference. This is something we are looking to change.

How do you plan to make the most of the up-trading trend seen across categories in most consumer segments in India? 

In the post pandemic world, people are valuing their time a lot more than before. When they are away with friends and family, they want to make the most of it. In the luxury segment, you have affluent individuals who want more experience. The response to Raffles (Accor’s upper upscale brand) from our guests has been amazing and a reflection of that. We have 23 hotels in the pipeline and that says it all. We will continue to grow the brands we have here — be it Pullman, Novotel, Movenpick Ibis, Raffles or Fairmont. We have two to three projects (for upper upscale brands) on the table that we are close to finalising. With six more properties set to open next year, Accor is focused on providing guests with an unparalleled offering across India. 

Why is it that compared to most international and domestic hotel operators, Accor has been slow in its expansion in India?

If I look at Accor and the way we have approached business here, it’s a country with a lot of opportunity. But you need to take a measured approach. Building a hotel after investing millions and signing up with an operator who doesn’t meet the owner's expectations because of the wrong location or brand is not acceptable. While (as a hotel operator) I will still collect my management fee but the owner will not be happy. We are very careful on all these parameters — whether it’s revenue, location of profitability.

What’s the likely impact of the geopolitical headwinds and recessionary trends seen in some markets?

There’s a lot of negativity around but despite that I don’t see an impact. The recession is here but it’s not diminishing travel or desire to travel or spend time with friends or family. The UK is really impacted by the geopolitical tension but the hospitality sector hasn’t been hit so far.