India among top 5 growth markets for IHG: Haitham Mattar, Sudeep Jain

InterContinental Hotels Group (IHG) plans to double its portfolio in India due to increased demand and government support. Haitham Mattar, managing director of India, Middle East and Africa, and Sudeep Jain, managing director, South West Asia, IHG Hotels and Resorts, in an in-person interview with Roshni Shekhar in Mumbai shed light on their growth plan in India and expansion of the group’s revenue stream. Currently, IHG has 46 hotels in India and 58 are in the pipeline. Globally, it has over 6,300 open hotels in over 100 countries, and more than 2,000 are in the development pipeline. Edited excerpts:

 

Q: Talking about India, you have 46 hotels in the country right now. What are the current expansion plans here?

 

Mattar: We have a significant pipeline in India. We are going to double that number in the next three-five years. I think what is interesting is our luxury brand, in addition to InterContinental, Vignette Collection is going to make its way to India. Also, more voco hotels (one of the brands of IHG) are in the pipeline, but the majority would be the Holiday Inn and Holiday Inn Express. We are also launching a new brand called Garner, a soft conversion brand in the budget-friendly segment.

 

Q: What is driving this expansion plan in India?

 

Mattar: I think expansion comes, to start with, from the government's initiatives to increase gross domestic product (GDP) and drive the economic wheel in the tourism sector. Today, we're seeing that demand outstrips supply in most of the major metro cities (in India).

 

Q: Are there any specific partnerships in place for expansion, with hospitality real estate?

 

Jain: In particular, we have a few very good loyal partners like Brigade (the Brigade group), and SAMHI hotels. Then there are new owners, and developers in Tier-2 and -3 markets. They also have a lot of rise in demand for hospitality.

 

Q: Are you planning to add, or expand, any particular revenue stream in India?

 

Mattar: We definitely want to grow our revenue from weddings and that's where the company is investing in campaigns and products. We think we have the right infrastructure for it. We have catered for weddings. We do want to grow that segment and increase our revenues.

 

Q: Have you also seen a rise in demand from Indians opting for destination weddings?

 

Mattar: Yes, especially in the UAE... We're also seeing (that demand) in the US, in Thailand, in Southeast Asia, and in Singapore. Indians opt for more outdoor facilities.

 

Q: Are there similar expansion plans in the Asian continent as in India?

 

Mattar: We focus on key cities. Right now, the biggest focus is India. It's the largest market. It's the one with a clear strategy for growth. The other markets are actually insignificant when we compare them to India. In Sri Lanka, we have one hotel in the pipeline. It's not a huge opportunity as it is India.

 

Q: How significant is India’s contribution to IHG’s overall revenue?

 

Mattar: Absolutely, yes. This year has been a very good year for us in India. We have seen a strong performance. We saw growth of about 9 per cent in RevPAR (Revenue per available room), and close to 4 per cent in ADR (Average daily rate). That apart, occupancy levels have risen to 78 per cent. So, it's a very healthy performance for a big country and Mumbai and Delhi led this.

 

Q: Globally, is there any other region where you are having a clear growth plan like in India, since you look after the Middle East, and Africa as well?

 

Mattar: Globally, India is one of our top five growth-focused markets. From my region, on the globe, it's India and Saudi Arabia.

 

Q: In Southwest Asia, are there any prominent cities where you think the time is right for expansion?

 

Jain: We follow the capital. We go wherever there's a demand and where the economics stack up for the owner.

 

Mattar: Recently we've seen enhanced activity in Nepal, where we have two operational hotels right now.

 

Jain: We've got nine in the pipeline in Nepal and I think once the political situation stabilises in Bangladesh, we'll see demand there as well.

 

Q: What's the significance of the revenue contributed by India to the global group?

 

Mattar: Very significant. So, today, because of the impact of conflict in the Middle East, we are seeing shortfalls in revenue. Demand from India and Saudi Arabia has helped us sustain. I have already said that the growth numbers have been very strong and we're going to close a very strong year.