Hyatt Hotels charts plan to increase India footprint by 70% in two years

Aims to add 3,800 keys by 2023-end

Hyatt Hotels Corp plans to expand its footprint in India by over 70 per cent by 2023 as it seeks to make the most of the resurgence seen in the hospitality sector after a lackluster 18 months, company’s top official said.

Notwithstanding the pandemic and the impact it has had on hotel operations, large hospitality firms in India including Indian Hotels, ITC Hotels, East India Hotels, Marriott International, among others, have been signing up new hotels and adding to the number of keys at a fast pace, particularly in the leisure destinations that has seen a quicker bounce back owing to the so-called “revenge travel.”  

“India is the fourth highest represented county in our global development pipeline. There is lot of interest in this market,” Peter Fulton, Group President for EAME/ Southwest Asia, told Business Standard.

India as a market has been resilient and the occupancies have been good, pointed out Fulton. “But here, unlike other markets, as soon there is an issue, people drop rates to stimulate demand, but it doesn’t help.” he said.

The second wave had a devastating impact and occupancy plummeted but the revival has been underway, he added. Hyatt’s average occupancy across the country is over 50 per cent and he expects it to improve further in the months ahead.

The American hotel operator, which manages and franchises hotels, has charted an expansion plan even as operations at its flagship hotels in Mumbai and Delhi remain affected owing to the financial crunch facing Asian Hotels (West and North respectively), its asset owners.

The Hyatt Regency in Mumbai has been shut since June 7 as Asian Hotels (West) failed to make payment for its salaries and operations due to a “cash crunch.” Fulton said Hyatt is in constant dialogues with the owners and is hoping to resolve the issues in a few months.

Peter Fulton, Group President for EAME/ Southwest Asia.

Hyatt in Delhi too is facing its share of woes. Hyatt is a management company and it provide services through its reservation network and sales and many other channels to the individual hotels that it manages and charges a fee for the same. Hyatt had to suspend reservations for Hyatt Regency Delhi on its booking systems as it hasn’t received fees for the services it offers from the asset owners “over a fairly extended period of time,” said Fulton. Therefore, while the hotel is still operating it’s not taking bookings on its systems.

“It's an unfortunate circumstance and we're working very closely with the owners (Asian Hotels, North) as we negotiate the way forward and are hoping that Hyatt Regency Delhi will be back on the distribution platform as soon as we possibly can. It’s a wonderful hotel. I myself have worked there for good number of years in the late 90s/early 2000s,” said Fulton.

Meanwhile, as part of the aforementioned expansion plan, Hyatt will enter 12 new markets and add over 3,800 keys to its existing 7000 plus keys and a portfolio of 31 Hyatt-branded hotels across eight distinct brands in the country. This will take the number of Hyatt-branded hotels in India to more than 50 by the end of 2023. A third of the expansion will take place in leisure destinations that has seen a quick bounce back since the second wave of the pandemic receded, said Fulton. The trend, he pointed out is in line with most of the other regions he oversees.  

According to Nandivardhan Jain, CEO at Noesis Capital Advisors, post pandemic, very limited number of greenfield projects has come and quite a few international brands have come up with conversion friendly formats. This allows them to expand at a faster pace. For instance, Alila and Raddisson has Radisson Individuals.

It’s an opportunity for standalone unbranded hotels to become part of a large international hotel chain, gain from the hotel operators’ vast distribution network with minimum upgradation, he said. “We expect this to gather momentum as hotel operators get a lot more flexible,” said Jain. This will overall be a win-win for asset owners, brand, and guests, and good for the overall ecosystem, he added. 

Charting a growth path

Ø  6 new hotels set to open in 2021 across the Hyatt Regency and Hyatt Place brands

Ø  To enter 12 new markets by 2023 end

Ø  Add over 3,800 keys to its existing 7000 plus keys

Ø  No. of Hyatt-branded hotels in India to be over 50 by 2023 end

Ø  Operations in Hyatt Regency Mumbai and Delhi remain affected

Ø  In talks with Asian Hotels (West and North) to resolve the issue