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In a recent interview with businessline, Rajeev Menon, President, APEC, (excluding China), Marriott International paints a picture of a resilient Indian hospitality sector. He highlights not just their company’s growth plans, but the industry’s overall post-pandemic recovery and stabilisation, mentioning ‘an 8 to 11 per cent year-on-year average rate growth across diverse markets.’He further shares nuggets on Marriott’s strategies and the challenges, like visa complexities, that India’s hospitality industry faces.
Also read: Indian hotel industry poised for robust growth in FY25 despite election-driven business travel lull
Reflecting on FY 24’s 32 per cent revenue growth and 9,000 crore turnover, what’s the outlook for FY25, considering the observed double-digit growth in first-quarter booking patterns?
Operating on a calendar year basis, our Q1 bookings reveal promising double-digit growth, hinting at another robust year. FY25 anticipates maintaining a trajectory akin to FY24’s stellar performance. In terms of employment, with 13 to 14 new hotels set to open, we foresee adding around 1,500-2,000 employees to our existing 29,000 associates, contributing to both organisational growth and economic development.
What brands among your 17 in India will drive growth this year and how many additions do you foresee in the next five years?
Our emphasis on upscale and upper midscale brands like Fairfield by Marriott, Moxy, Courtyard by Marriott, Four Points by Sheraton and Aloft fuels rapid expansion. Luxury brands JW Marriott, St. Regis and Ritz Carlton also see robust growth with multiple new projects. While exact numbers are hard to predict, our growth trajectory signals sustained expansion for each brand.
How does Marriott Bonvoy set itself apart with nearly 200 million global members and over 6 million in India?
We transcend conventional loyalty programs by prioritising unique experiences, creating a sense of belonging in an exclusive ecosystem. Collaborations like sponsoring the Australian Open and partnering with artists like Ed Sheeran offer our members unmatched ‘Money Can’t Buy’ moments. These endeavours not only enhance our program’s value but also solidify Marriott’s distinctive standing in India’s dynamic hospitality scene.
Could you share your perspective on the current state of India’s hospitality industry and do you foresee any stabilisation in Average Room Rates (ARR)?
In terms of ARR, we expect stabilisation throughout this year, although it doesn’t preclude increases, particularly given the ongoing inflation. Our industry’s dynamics hinge on demand and supply, with markets experiencing more robust rate increases when demand outstrips supply. Reflecting on Asia’s post-COVID growth, it’s worth noting that our recovery, after an 80-90 per cent decline, appears strong in percentage terms, but it’s now stabilising. The current normal differs from 2019 and we anticipate an 8 to 11 per cent year-on-year average rate growth across diverse markets.
How do escalating real estate costs impact the hospitality industry and both investors and hotel chains, irrespective of the specific brands being pursued?
In developed regions, rising construction costs have led to a slowdown in new startups, driven by increased interest rates. However, in India, despite cost hikes, the hospitality industry remains robust. Investors perceive an opportunity for a favorable return on investment, even at higher construction costs. Unlike other sectors, the hotel industry in India is witnessing a surge in construction activities, particularly in the Luxury and Premium segments. Notably, stable or marginally increased interest rates, significantly lower than a few years ago, contribute to this optimistic scenario, fostering a flurry of hotel construction activities in response to the evolving real estate landscape.
Given the unfulfilled recovery in foreign tourist arrivals, despite improved visa processes, what challenges do travellers still face when coming to India?
The competition among countries hinges on easy access and seamless experiences for travellers. While India offers diverse attractions, the visa process remains a critical factor. Compared to countries with visa-free travel options, the ‘visa on arrival’ approach still involves bureaucratic hurdles. To enhance tourism, discussions with the government persist on further simplifying the visa process, aiming for a more accessible and streamlined entry into India.
Are upcoming elections expected to impact demand?
The impact depends on the context, as seen in the recent Indonesian presidential elections. Initial concerns about unease due to a runoff in June didn’t materialise, showcasing the unpredictability of electoral outcomes. In India, the influence of elections will unfold and while some effects are expected, market maturity, tends to mitigate dramatic consequences, fostering stability, as observed in Indonesia.
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