Radisson to further expand presence in Tier-II, -III cities: Nikhil Sharma

We will close this year with 130 operating hotels and add almost 20 operating hotels next year, said Nikhil Sharma, MD, South Asia, Radisson Hotels group

The Radisson Hotels group, operating in more than 95 countries, has 130 operating hotels in India. According to Hotelivate’s report, it is the third-largest hotel group in India in terms of inventories as of August. Nikhil Sharma, managing director and area senior vice-president of the group, South Asia, talks to Roshni Shekhar in a virtual interview about the group’s plans. Edited excerpts:

 

How has this year been financially for Radisson Hotels? 

We will close this year with 130 operating hotels and add almost 20 operating hotels next year. In terms of locations, we are in 76 of them, which is the length and breadth of this country. In the next few years, we will be in 114. We are the only hotel with more than 50 per cent of the portfolio in Tier-II, -III and -IV cities. We are entering Tier-V markets too. 

We have 37 per cent of our portfolio in Tier-I cities, 54 per cent in Tier-II cities, and 10 per cent in Tier-III cities. In the future, 19 per cent of the portfolio will be in Tier-I cities, 54 per cent in Tier-II, and almost 25 per cent of the hotel’s land inventories will open in Tier-III cities. 

 

How significant is India for the group? 

We are operating in almost 95 countries. India has our largest number of hotels. Including our pipeline, India will continue to be the largest base for the group. As a global company, you will always have more countries as your focus countries, but India is one of the top countries where the group is focused. 

We are the second-largest international company in the country by the number of rooms. By the number of locations, we are the largest international operator in the country.

 

What are your main reasons for focusing more on Tier-II and -III cities? Are you focusing on cities around industrial corridors?

Of course we’re focusing on industrial corridors. We are focusing on spiritual travel as well. I can tell you locations that may not make sense to a lot of people -- Salem (Tamil Nadu), for example. But it does phenomenally well because it’s got its own cotton industry. Saputara, another example, is a resort on the borders of Maharashtra, but the demand comes from Gujarat. Now, Saputara, as such, has no industry around it, but it’s a leisure location, which is doing well. In terms of demand, there is greater demand in Tier-II and -III cities.

 

Which segment is the main focus for growth now? Are you seeing any new emerging segments for growth? 

We are focused on expanding our upper-middle-scale segment. I am seeing a lot of growth in sport and sport-related activities. Just as a segment, sport is growing. MICE (meetings, incentives, conferences, and exhibitions) in India are weddings. Almost 50 per cent of our revenue is from food and beverages and 80 per cent of that is from weddings. We are launching our wedding asset early next year.

 

What trends are you observing in occupancy rates? 

In October our average daily rate was ~7,100 and in November, the India average was ~8,300-8,400. Demand will continue to outstrip supply in the mid-market, upscale, upper upscale hotels for the next three to four years.