Global hospitality company Hyatt Hotels Corporation has undertaken a massive expansion plan with the launch of 120 new hotels globally. The Indian market, where the company is under-represented, with just five operational properties and three under development, will play a decisive role in shaping Hyatt's growth in South Asia. Mark Hoplamazian, president and chief executive, Hyatt Hotels Corporation, spoke about the company's expansion plans in India to Swaraj Baggonkar. Edited excerpts:
Although Hyatt has only a few properties in India, it is very bullish about its growth. What is your broad idea about the Indian market? India has been an active part of our overall developmental plans globally. We have been in this market for quiet a while. There is increased demand for first- class stay in this country. Supply is ramping up and but still has a long way to go. We see clear and strong economic growth for the country. We have growing business demand and a very interesting tourism demand.
Which factors will primarily drive growth for you here? The way economic development is taking place in India, it is not surprising to imagine the rate of growth of service sectors. Business and leisure travellers are coming to India in huge numbers. Local demand, too, has started to accelerate over the past few years.
Are you planning to bring the Hyatt Place brand to India? India will be the first country outside the US where we will introduce the Hyatt Place brand.
We believe the category of travellers just below the high-end travellers is growing significantly. We have been working with our Indian partners. We are also infusing capital, which is quite unusual for an international brand. By investing equity, we want to show to the local market that we have confidence in our brand. We had a good experience of investment here so far. We are building six Hyatt Places in India.
How many properties will be added by Hyatt? We have 120 properties in our pipeline globally and about a quarter of that will come up in India alone, which is about 30 properties. We are working with a number of third-party developers.
Are you planning to bring more brands to India? We currently have four brands in India — Park Hyatt, Grand Hyatt, Hyatt Regency. We would be launching Andaz, Hyatt Place and Hyatt Summerfield Suites in due course. We see a tremendous opportunity for growth for all our brands.
How have room occupancies and room rates been over the past five years in India? Except for 2008-09, when there was a slight drop in room occupancies but not an equally significant dip in room rates, India has posted robust growth on both counts. The country has weathered the global downturn very well, as there was just a bit of a downturn and not a real recession, whereas the international market has just started to get out of the downturn.
How do you see India's growth vis-a-vis China's growth in hospitality? We have about 12 properties in China, in addition to a few properties in Hong Kong and Macau. Both the countries have robust economic growth but demand for quality stay in China is higher than in India, perhaps due to higher growth.