Hilton Garden Inn is going to be really powerful in India: Kevin Jacobs

Kevin Jacobs, chief financial officer (global) of Hilton Hotels Corp, was in the country to attend an industry convention recently and caught up with Business Standard exclusively. The international hotel chain has around six brands (counting the recently announced Waldrof Astoria) in India. Hilton in India is looking to boost its presence here by over 60 per cent in the next couple years, along with launches in the super-premium category such as the recently announced luxury Waldorf Astoria for Jaipur. Jacobs talks to Pavan Lall about plans to tackle growth markets and shift new (younger) consumer preferences, and where India fits in. Edited excerpts:

What are Hilton’s expansion plans?

We have 24 hotels and 14 hotels are in the pipeline. We have announced the first Waldorf Astoria in the country, which will be in Jaipur and have around 224 keys.  We have five brands trading here today. Waldorf will be the sixth, but we have 19 trade brands and so any one of those other brands that are not here could potentially come in the future. The Hilton Garden Inn brand ultimately is going to be really powerful here in India, and also across Asia and around the world. We also think we can double the size of the pipeline in the next five years.

How are you seeing growth in India, given that there are trouble spots across the world?

Irrespective of what’s going on in the short-term macro conditions, what you have to look at is a middle class that has doubled over the past two years — over the past two decades globally. It’s expected to at least double again over the next two decades. And regardless of short-term economic growth in different parts of the world, that middle-class formation is going to continue and India has this on steroids; its GDP is growing circa 6 per cent. China’s GDP is growing 3-4 per cent or whatever and people think that’s going to continue and our ability to bring our products, particularly mid-market products like the Hilton Garden Inn, to this rapidly growing middle class around the world is a multi-decade opportunity that is not going to be affected by the short term.

How are your numbers in terms of profitability and REVPar (revenue per room) and is there a loyalty programme that helps that?

We run a 116 per cent RevPAR index globally, which means we drive a 16 per cent premium to our competitors. No one else’s RevPAR index is that high and that’s why owners are going to choose to do business with us because they’re spending their money to build a hotel and they’re going to choose whose engine they will fill. If they choose us more often than they choose our competitors we’re going to have a higher growth rate. Loyalty Hilton Honors is a really important part of that and with 1.5 million in India, globally it’s up to 150 or more million members.

Have you changed the way you market hospitality, given the last two Covid lockdowns?

When there are more leisure travellers, you shift marketing dollars to target them. When big businesses stopped travelling, we shifted our marketing to target small and medium-sized businesses. Before Covid about 80 per cent of our business travel was by small and medium-sized businesses. Those really came back almost immediately after Covid restrictions eased, meaning if you work for a big company, big news publication, big consulting firm, accounting firm, investment bank, they all said, “Hey, you can’t travel during Covid, right, but if you’re an entrepreneur, you were travelling during Covid because if you didn’t travel, you didn’t have any revenue”. And now about 85 per cent of our global business mix is from small and medium-sized businesses.