'Many hurdles to doing hotel business in India'
Having set out to open 150 properties in India in the next one decade, hurdles created by various authorities and government departments are a worrying factor for global hospitality giant Inter-Continental Hotels Group (IHG).
"There are a lot of challenges in India. There are many hurdles to get business done here. There are so many problems with local authorities. It is not easy here," IHG vice president (Operations, Southwest Asia) Douglas Martell told IANS in an interview here where IHG has two properties.
"There are a lot of things that you take for granted from the authorities in other countries. Here, you are dealing with so many departments and people. Getting clearances takes a lot of time and effort," Martell said.
"Sometimes, I feel sorry for the owners as they deal with these problems and projects get delayed and costs keep going up. It takes just three years to set up a hotel in China whereas in India it can take up to seven years. This pushes up the cost considerably," Martell, who hails from Melbourne, said.
Though Martell feels that India and China have some similarities, the system works better in China. "There you can slow things (projects) down but you cannot stop growth. The Chinese also have a sense of pride for quality and getting the best things," he said.
Martell, who was stationed in China for five years and took the IHG hotels count from 40 to 220 in that period, says IHG is looking at India for new hotels as it "will witness the fastest growing demand" for rooms in the next 20 years.
"With a huge young population and a fast growing middle class, India has big potential. We are building a platform for the future," he said.
The IHG, which owns international brands like Inter-Continental Hotels, Crowne Plaza, Holiday Inn and Holiday Inn Express and manages over 4,650 hotels worldwide, at present has 15 hotels with over 2,550 rooms across India. Most of the 135 upcoming hotels in the next one decade in India will be the Crowne Plaza, Holiday Inn and Holiday Inn Express brands. The majority of them will be in the Metros and Tier-II cities.
"Nearly 88 percent of these will be business hotels under the Holiday Inn and Holiday Inn Express brands. We want to be No.1 in India in the mid-scale hotels category by 2030," Martell said.
Keeping in mind the needs of Indian middle-class guests, the IHG is looking at hotels at leading religious centres and also trying to adapt to local needs.
"Unlike other countries, where the Holiday Inn Express hotels do not have restaurants, all our hotels here (in India) will have restaurants which will be outsourced. In one location, the Express hotel will be fully vegetarian keeping in mind the local sentiments," Martell said.
In recent years, the number of domestic guests in IHG hotels has swelled to 80 percent of the total guests. "Earlier, it was 80 percent foreign guests. The trend is reversing," Martell pointed out, justifying why IHG still sees a lot of potential in the Indian market despite the hurdles.
"We keep getting a lot of offers to open new hotels. However, we sometimes refuse tie-up offers as we are very particular about maintaining our standards, especially where the properties fail to come up to our international safety standards," Martell said.
(Jaideep Sarin can be contacted at [email protected])
(Posted on 26-11-2013)