After five decades in India and 19 hotels, UK-based leading hospitality chain, Intercontinental Hotels Group (IHG), is planning to open 45 more properties in the next three to four years. Within Asia, this is the second highest pipeline next to China.
The company has put in $30 million in the Indian market in their joint venture with Duet India Hotels and is open to investing more if there's a need. IHG's chief executive officer Richard Solomons, who is visiting India, spoke to Ruchika Chitravanshi on the opportunities the country has to offer, as well as the challenges. Edited Excerpts:
The hotel sector has been through a very gloomy phase. What is your view of India vis-à-vis other markets?
Why is everyone so negative? India is one of the 10 markets that will deliver 75 per cent of the global hospitality growth. Ultimately, the best correlation for hotel revenue is the growth of gross domestic product.
A lot of European countries will be much happy with India's growth. We are in it for the long term. Our shortest deals are for 20 years. We don't make short-term decisions.
How much does India contribute to your overall revenues?
India's contribution is very small (till now). We have been in India since 1965. We have 19 hotels. We took a lot of hotels out. We have learnt a lot and we have made a lot of mistakes. We don't want growth for the sake of growth. We want high-quality growth. We have 45 in the pipeline in the next few years and 150 in the next 10-15 years.
What has been your biggest lesson here?
You have to choose the right partner. It is crucial in any market. But India especially requires a lot of local expertise. India is not the easiest place. Which is why choosing the right local partner is absolutely crucial. It takes a lot longer to open here than in any other market. It is hard to get land, licences. It slows the pace of growth.