We are growing at a very, very strong pace in India: Rajeev Menon

Interview with vice-president for South Asia, Marriott International

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Hospitality major Marriott International is planning to add 49 hotels to its existing portfolio of 25 in India. Marriott area vice-president for South Asia Rajeev Menon tells Indivjal Dhasmana and Vrishti Beniwal on the sidelines of India Economic Summit that the new hotels will be opened across the country and across its seven brands, including JW Marriott, Courtyard Marriott, Fairfield by Marriott. Edited excerpts:

Where are you coming up with 49 new hotels in India?
We will be pretty much spread across the country. If you look at our distribution, it is pretty much across India — east, west, north and south. We have hotels coming up in Shillong, Kolkata, Jaisalmer, and Amritsar among other cities.

By when will these hotels be ready for  business?

When we talk of 49 hotels in the pipeline, those are signed management deals that we have in place. This means that there is land and financing allocated for the project. All these 49 projects are in various stages of development.  If I have to gauge, I would say it would take three to five years.

These hotels will be under which brands out of the seven that you operate in India?
Across the portfolio. Our fastest growing brand is Courtyard. We have 11 of them operational, we are opening another one before the end of the year in Mumbai and we have another 18 under development. Then, we have one Fairfield hotel, we have another 13 under development. The second fastest brand is JW Marriott. We have six JWs already operational. Globally, we have 66-67 JWs and almost 10% of that is operational in India.

Why does Marriott have just seven brands in India, out of over 20 globally?
When we bring our brands to India, we do considerable amount of research to make sure that we adapt the brand specially to the needs of Indian customers.  It does not make sense to us to just bring a brand that works in the US to Indian markets. That is not the way we work.  

Why have you been on an expansion mode, even as occupancy of hotel rooms is stagnating at 60 per cent in recent years?
The last five-odd years have been challenging for the industry. But Marriott has done reasonably well, even in this difficult time. When you talk about market occupancy of 60-odd%, I must tell you that for my stable portfolio — which we call same-store sales as I am not adding new hotels — I am running at above 70% this year. This is a considerale gap over others.

Has slow down in the economy dented your growth?
In the last two years, while the industry has been on the decline, lot of companies have posted losses. We, as a company on a stable portfolio, have grown almost double digit in the top-line and double in bottom-line in absolute terms.  If you see purely from the revenue point of view, though we don’t declare revenues for India, we are really positioned among the top three.  We are growing at a very, very strong pace in this country.

Even as economic growth has picked up in the second (July-September) quarter, tourism component of the GDP rose just over 2% in these three months. What has been ailing the sector?

The number one problem is related to visas. We have heard that the government will implement e-visas for a number of countries in the next two-three weeks.  We continue to wait for that. For us, that will be a game changer. India will leapfrog from its current archaic system to a new set-up which will make coming to India a lot easier. On the domestic front, we believe that there were a number of issues that were holding back the industry, slow down being one of them, infrastructure being another challenge. Different tax structures in different states also come in the way, hopefully goods and services tax (GST) will help here.