Asian Hotels West which owns the JW Marriott New Delhi Aerocity and Hyatt Regency Mumbai and developed properties from mid-scale to high end is aiming to acquire small boutique hotels. “Our expansion plan is limited due to the high cost of funds within the country but are open to small boutique hotels’ acquisitions,” Sandeep Gupta, Executive Director, Asian Hotels West, said. Gupta is of the opinion that the financial health of the India hotel industry is still strong. “The entry of PE players and large Real estate funds will make assets more Fund owned and less individual run,” he said citing the example of the Leela Hotels.
Talking about the performance of the industry, he said that there is definitely a slowdown in the economy. “The next four to five quarters need to be watched and see what’s the latest financial crisis brewing,” Gupta said. He revealed that Hyatt Regency Mumbai is stable in its market at above 70 per cent occupancy and JW Marriott is a growth asset looking at above 75 per cent occupancy year-round. Also, the contribution of F&B and MICE in overall revenue of these hotels stands at 25 to 30 per cent and 40 to 45 per cent respectively. “F&B is a great driver now for luxury hotels and top Chefs of the world like Heston Blumenthal want to come in too. However we need to have an open mind about other cultural preferences as well in cuisine. We have just one restaurant in the top 100 in the world,” he opined. Both these hotels get 35 to 40 per cent business from domestic market and remaining from the oversea markets.
Talking about the challenges, he said that disruptors like AirBnB and OYO have started making an impact, and general consolidation is also happening with large brand companies. “The bottom end of the market is being disrupted by OYO and Airbnb will first affect the leisure segment, and then the corporate travel segment,” he added.
Gupta said that Delhi Aerocity is a classic example of PPP working well with hotels, restaurants, large corporate offices and retail along with the airport hub helping the growth of the entire destination. Speaking on the growth propect of Indian hotel and tourism industry, Gupta said that it needs to grow at least 20-30 per cent annually to make it in the top ten destinations. “Hopefully, as infrastructure of air rail and road networks improves so will tourism. India needs to project itself as a “Clean and safe” destination first,” he said.