By the end of the year, Marriott International would have introduced six of its portfolio of 23 hospitality brands in India. Each of the brands — JW Marriott, Renaissance, Marriott Hotels & Resorts, Courtyard by Marriott, Marriott Executive Apartments and the to-be-launched Ritz-Carlton — is uniquely positioned for a different type of traveller. In this free-wheeling interview with Preeti Khicha, Marriott International President & Managing Director (Asia Pacific) Simon F Cooper, and Marriott Hotels Area Vice-President (India, Malaysia and Maldives) Rajeev Menon talk about the complexities of the Indian market and how the company plans to strengthen its foothold here.
How is the Indian hospitality market shaping up? What are the key drivers for growth here?
The current inventory levels in India are very small, so there is a long way to go. If you look at other mature markets around the world (Europe and North America), the ratio of rooms to population is ten times that of India. Hence, there is a lot of room for growth.
Which segments of the hospitality business are poised to grow the fastest?
Cooper: It is interesting because the luxury segment in India used to be primarily for foreign tourists. That has changed today. While you still have luxury hotels such as Taj and Oberoi, you see hotel chains like JW Marriott, Ritz Carlton and Four Seasons coming into the key gateway cities. A majority of the inventory or at least more than 50 per cent of the rooms under construction today are in the luxury segment.
While the economy segment in India is growing, there is also a segment for our brands like Fairfield somewhat above the economy segment. We feel there is a discriminating business traveller today in India who is looking at crisp hotels with nice restaurants and couple of meeting rooms — a cut above the economy brands.
What does the Marriott brand stand for and what differentiates your brand from other luxury hotel brands?
Cooper: Any hotel brand differentiates itself by its products, location and its people. The location has to be wonderful and the product must fit the market. People also make a hotel and the Marriott service culture is something that we stress upon the world over. The key is how you train the people and motivate them. For the next couple of years it is going to be a challenge finding great leaders for our hotels. That is not to say there is any dearth of talent. The challenge for us lies in training and retaining the talent.
Is recruiting talent such a big problem in markets like India and China?
Cooper: In China the problem is more severe than in India. The reason is that in India there has been a great history of luxury hotels. India also has hotel management schools and the advantage of language. You don’t have that history in China and hence it is more challenging.
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People do not always associate brands such as Renaissance with Marriott. How do you hope to overcome the challenge of managing different brands under the Marriott umbrella?
Cooper: It is tricky because you want each brand to have its own identity as well as stress the umbrella brand. We want Renaissance, for example, to be as a standalone lifestyle brand. At the same time, we want a Marriott Rewards member to know that it is part of the family. As we develop the Courtyard and Fairfield brands, the key would be to have a clearly defined strategy for each brand, and try and execute that as we go forward. The thread that ties all these brands together is the Marriott Rewards or the loyalty programme.
For now, we are using six brands in India. We would rather have six doing well in India than have 20 doing poorly. Brands like SpringHill Suites and TownePlace Suites are highly suitable for the US market where there is a highly transitory labour market, where people stay for three months here, one month there. We certainly will not see those brands in India or China for a really long time. We will keep ourselves disciplined to the six or seven brands in India.
What are the relative strengths of the different Marriott brands in India?
Cooper: Marriott is the best recognised brand here because of the JW Marriott hotel in Mumbai. We were very fortunate to create that partnership and that established Marriott’s name in India. The Courtyard and Renaissance are beginning to gain traction — though certainly we are nowhere close to the Oberoi and Taj. As people see and experience more of our hotels, they will gain recognition.
How do you promote the local feel and stay true to the strategy of the global brand?
Cooper: It is always a little tricky. For example, in the Courtyard that we have in India, the services provided are significantly better than what we would have in North America. Over here, the Couryard by Marriott are full-service hotels. In North America they are not. This is because when you build a Courtyard near the airport, you are competing with full-service hotels. Similarly, a Fairfield in America has really limited food and beverage options. That you couldn’t do in India. Here, you expect any hotel you are staying in to have a great food and beverage facility.
Talking about the consumer, are the expectations from an Indian luxury traveller different from his global counterpart?
Cooper: I don’t think the expectations of an Indian traveller are any different from that of a luxury traveller abroad. The one thing that technology and the internet have created is a common set of expectations around the world. The latest fashion on the runway in Paris is on the cell phone in Beijing instantaneously. So, people who have money in Beijing or in Mumbai know what is stylish, what is fashionable, and have the same set of expectations today.
Which are your more profitable properties here in India?
Cooper: I do not like to talk profits, but certainly JW Marriott Mumbai has been successful and the Renaissance Mumbai has been doing well. Our Courtyard Gurgaon property is doing extremely well because Gurgaon is a mature suburb. Pune has just opened and the MICE (meetings, incentives, conventions and events) business there is doing great business exceeding our expectations.
A key part of Marriott’s business globally comes from the MICE segment. What is the potential of this segment in India?
Do you plan to expand the Marriott franchise in India any time soon, with, say, the Edition (boutique hotels) or the Ritz Carlton?
Cooper: We are talking about an Edition right now in Mumbai. The Edition is a trendy boutique hotel with great bars and restaurants. Typically, an Edition would have 200 rooms. A typical customer of the Edition would be a wealthy Gen X for whom style and status is important. If the decision proceeds according to plan, we will sign end of the year. The Ritz Carlton is under construction. There is one coming up in Bangalore and no doubt there will be more. Another obvious city for Ritz is Mumbai but we have not found a location yet. If we had found the right location and the right partner for Ritz in Mumbai, we would have been here 10 years ago. We are also looking at Delhi as an option. We are planning to bring in Ritz Reserve, which is our boutique resort destination. There are fantastic resort locations in this country and we feel that a few of these locations may be appropriate for a Ritz Reserve.
What are the potential resort locations in India?
Cooper: I was just down to Kerala and it is a great location. However, nothing is final in Kerala. In India, we definitely need to balance our city hotels with resort hotels as we do not want to be perceived as only a corporate chain. We have some great resorts around the world and we want to make sure that it is the same way in the Asia Pacific. We are also looking at hill locations in the north and some other offbeat locations.
How many hotels are there in the pipeline?
Menon: We have six hotels coming up this year. In the next three months, we are opening the JW Marriott Chandigarh, the Marriott Jaipur and the Courtyard by Marriott, City Centre Pune. In the second half of the year, we will have the JW Marriott Bangalore, JW Marriott Chennai and the Courtyard by Marriott Bhopal. We are adding 1,400 rooms this year to the existing 3,000.
How do you successfully manage the relationship with your owners, given that you work on a management contract model?
Cooper: With any owner, the most important thing is return on investment. An owner will not put money into a building and hire us without maximising his returns. We have fantastic relationships and terrific owners. It is a model that works for us since we are not in the business of real estate. We partner with developers whose business is real estate.
Some owners are more involved than others. In Asia owners are very involved as the hotels are reflection of their success in society. They use the hotel; they want their friends to use their hotel. This is something that Westerners need to learn when they come here. In America the biggest owner of Marriott hotels are great people but they are only looking at the bottom line.
Sometimes it becomes tough because some owners want to introduce more and more elements of luxury into a hotel but then you might not get the rate because of the market. It is a challenge for us as we want the hotel to operate in the best possible way and at the same time we want to make money.
What initiatives are you offering to boost online sales given that it contributes only a small part of the overall sales?
Cooper: Consumer research is online but they book on phone. The hits on Marriott.com from markets like India and China are as large as the global markets. China too has the same problem and there too is a reluctance to book online.
Menon: In India, there is a high level of concern on the part of consumers about credit card purchases. Banks are not automated well enough right now for credit card payments. So right now, almost 65 per cent of the business is coming at the hotel number. The balance is broken up between the global distribution system, Marriott.com website bookings and travel agents.
You said earlier that food and beverage is an important part of the hotel business in India, especially in cities where competition is strong. What is your score on that front?
Cooper: In India, food and beverage distinguishes a hotel as a destination and not just an amenity. It helps position the hotel in the local community. You can stick a great brand on top of a building but if you do not have a good food and beverage product, you will harm your brand. In other parts of the world, it is not as important. In North America, I was very frustrated to see taxis at the front door of the hotel at 7.00 pm waiting for people to go out to eat. Hence, we have done a lot of partnerships in the US with great names like Gordon Ramsay only to bring the outside in.
Food and beverage is a huge part of our revenues in India. It is over 50 per cent for many of our hotels. It will be like that for a while as in India there are not many fine dining restaurant chains.
Menon: If you look at the JW Marriott, the entire success of that hotel was built on food and beverage. In Ahmedabad, at the Courtyard by Marriott, the restaurants do 400-500 people a day. We keep refreshing concepts as the Indian traveller is becoming more discerning.