There's demand all over but daily rate recovery is slow: Hyatt Hotels Sr VP

In a Q&A, Genevieve Materne says average daily rates (ADRs) may touch pre-Covid only in 2023-24, though lifting of curbs on international flights will offer some traction

Geneviève Materne, senior vice president commercial services, EAME (Europe, Africa, Middle East) & South West Asia at Hyatt Hotels Corporation tells Shally Seth Mohile that India’s hospitality market has bounced back faster. However, the average daily rates (ADRs) are likely to remain depressed in the coming quarters and will touch pre-Covid levels only in 2023-24. They would gather momentum with the resumption of commercial flights for international destinations, later this month. Zurich, Switzerland-based Materne was in Mumbai to connect with her team—first time since she took charge four years ago, and oversee Hyatt’s expansion. Edited excerpts:

If you can touch upon your expansion plans for India, how has the business been across the regions you oversee since the third wave of the pandemic receded?

India has bounced back much faster than other markets. The good part was that asset developers were pretty hopeful even during the pandemic and continued to invest. It’s the first time that we are opening 11 hotels in India in a single year!  We intend to have 50 hotels by 2023 in 12 regions. That's a 70 per cent increase. Things were looking up till the third wave hit in January forcing us to take a step back. The demand is now looking up from all quarters–be it weddings or events.

In 2021, the room occupancy across Hyatt hotels in India stood at 47 per cent. The RevPar (revenue per average room) recovery was at 148 per cent compared to 2020 and 56 percent compared to 2019.

The Middle East too came back pretty strongly with occupancy touching as high as 95 per cent with an average daily rate (ADR) higher than the pre-pandemic phase.  Europe has been stop-and-start. Our hotels really struggled in the UK. With curbs lifted demand is coming back strongly everywhere and people are really willing to travel.

When do you see the average daily rates (ADRs) for Hyatt Hotels reaching the pre-Covid levels in India?

That’s something where we are going to struggle the most. We forecast 2023-24 to get back to really good levels. We are going to try and push it. It will come back when international flights resume. We are also competing with the local chains here. We can’t be this international chain with high ADRs when others are cutting deals. We will suffer for a bit but we will ensure occupancy. What we need to do is to build occupancy sooner and not at the last minute as that’s what will help our ADR. Unfortunately we are still seeing the trend of last minute bookings. It becomes difficult to forecast your rates unless you have the guests in.  When you are holding and waiting until the last minute, there will be a tendency to drop your rates.

We have noticed in the rest of the regions that it’s very hard to drive up the ADRs without the corporate travellers from the US. If we can get the event piece right, the rates will come back much sooner. Am guessing others too are hinging their demand on group demand (bulk bookings)

Compared to your peers, Hyatt has a relatively smaller presence in leisure locations.  Will the expansion include these?

We will make sure that the pipeline of new hotels moving forward includes leisure locations not only in India but also globally as this was one segment that was resilient. Our portfolio will diversify from big cities to secondary and tertiary cities. The new hotels will be coming up in Dehradun, Chandigarh, Goa, Bodh Gaya, Vijaywada to name a few.

How important is food and beverage (F&B) as a segment is for you, are there any new concepts in the works?

It has always been huge for Hyatt. There is a lot of pride we take in it. In fact last year, we reached out to our owners and asked what do you expect from us?  They were like bringing back the focus on F&B. We are looking at newer concepts. This will be a big focus for us this year.  With our loyalty programs one can use the points accumulated during stays at Hyatt properties to dine at the restaurants. It’s giving them a reason to come into our restaurants.

The pandemic prompted the hospitality firms everywhere to re-imagine the business and step up presence in the ancillary businesses. What was it for Hyatt Hotels?

In India like other brands, we also went into home delivery like other brands.  Globally, we took this initiative called “Hyatt Loves Local.” This was to help little businesses around our hotels survive. The idea was to help all those who were struggling give them a platform to survive during this time. We looked at businesses that were minority-led or led by women as diversity and inclusion is very important for us as a group.  In Kochi for instance, we gave the crafts women a marketplace to come and sell their art to our guests.

The other initiative we had was to build these hybrid meeting platforms. The hybrid remains. It expands the reach of the meetings as you can add people who wouldn’t have come for a conference anyways. We have done this fairly well. We did this big cardiology conference in Paris aided by technology. It was attended by 5000. We proactively went to the organisers and told them to do it with us as we have these hubs in all major cities – London., New York.  It became a Hyatt event.