After hitting quite a few roadblocks early on in India, the Canada-headquartered luxury hotel chain operator Four Seasons has finally prepared a roadmap for its expansion in India, which involves the setting up of at least six more hotels and resorts.
The premium hotel brand plans to come up with properties in New Delhi, Gurgaon, Hyderabad, Bangalore, Kerala and Goa. All of the said properties will have management contracts handed to Four Seasons and will not entail any significant equity contribution from the company.
In a management contract, hotel companies sign a pact with the property’s owners, who can be real estate developers or financiers. Four Seasons, like most other international hotel players — including Marriott, Hyatt and Intercontinental, among many others — is a management operating company.
Currently, Four Seasons has only one property in India — a 33-storied tower with 202 guest rooms and suites located at Worli in Mumbai, which was thrown open in May last year, although it was supposed to come up in December 2007. The company has been able to seal a deal with a partner for its second property, which will come up in Bangalore in the next 2-3 years.
“We are in talks with our partners for hotels in the north as well as for the ones coming up in the south of the country. Since we operate in the premium category, our primary focus will be on major cities before we graduate to other centres,” said Uday Rao, hotel manager, Four Seasons Hotel Mumbai.
Plans are also underway to add service apartments and a ballroom to the Mumbai property, owned by the Jatia family, in its second phase of expansion. The Mumbai property was established at a cost of $90 million (about Rs 300-350 crore).
The company will shift its focus to resorts scheduled to come up in markets like Kerala and Goa once its hotels projects are finalised. In fact, the company is in advanced stages of inking a deal for the Goa property with the Jatia group.
As the company has maintained a low-key affair in India, Four Seasons will have to depend a lot on foreign tourists for revenue generation as the brand is relatively subdued in India when it comes to advertising and marketing. Furthermore, the company has decided against giving advertisements, while solely banking on word-of-mouth publicity.
“We cannot let the brand value of Four Seasons go down through advertisements. We would rather work with sales managers in various cities, identify top-level customers, sign up local companies from across the country and tie up with airline companies. It will be a long drawn process and will be difficult, but that’s how we will operate,” added Rao.
With India’s economy on the rebound, many hotel operators are eagerly waiting to have a slice of the Rs 2.88-lakh crore market. About Rs 52,000 crore worth of investments are expected to flow into the domestic market for setting up new hotels in the next two years by various international and domestic hoteliers.