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Luxury hotel chains to check into India

Ruchika Chitravanshi  |  New Delhi 

Starwood, Jumeirah, Mandarin Oriental, Lebua and MGM are among top-end brands planning to tap this market in next couple of years.

Many of the best luxury and ultra-luxury hotels from all over the world are readying plans to enter the India market, and are expected to set up chains over the next couple of years. To be specific, around 20 luxury hotel brands are expected to be under development in the next three years in India, experts pointed out.

Analysts reasoned that India is tipped to be a top luxury destination of the world in the next 5 to 10 years, prompting the foreign hospitality brands to turn to this market with all seriousness.

Frits van PaasschenTake for instance, the US-based hotel company, Starwood, which has been hunting for a ground to bring its ultra luxe brand-- St Regis-- to India. The search recently ended in Noida, where the first St Regis property in India, with 200 rooms, is set to come up by 2015. It also has plans for two more hotels in the country—one in Mumbai and another in Goa.

The tariff in its first India property has not been announced yet, but a night at St Regis, New York, comes for around $680 for a deluxe room. Frits van Paasschen, president and CEO of Starwood Hotels and Resorts Worldwide, had recently told Business Standard in an interview that the exclusivity of the brand can be understood from the fact that there were only 27 St Regis Hotels around the globe. Four out of these are in China alone and another seven are in the offing.

St Regis is not the only one in the super luxury range that is waiting to open in India. In fact, out of the proposed 1,02,438 branded hotel rooms that are being planned in India by 2015-16, around 15.5 per cent of them will account for those in luxury/super luxury chains, and another 29.5 per cent in the upscale band, according to a study done by HVS, a hospitality consulting firm.

International hotel chains like Jumeirah, Mandarin Oriental, Lebua and MGM are among some of the top end luxury hotel brands who have either announced their India plan or are in the process of tying up for the same.

Lebua CEO Deepak Ohri, who announced the group’s first hotel in India recently, told this newspaper that India was all set to become the topmost luxury destination in the world by 2020. Thailand-based Lebua is a super luxury chain operating in Bangkok and New Zealand: Lebua’s Lake Okareka Lodge in New Zealand charges its guests anything between $1,600 and $4,590 for a night depending on the time of the year and kind of accommodation.

‘The place to be’
“India is a market they cannot ignore. They have got a head start in China and now India is the place to be in,” said Kaushik Vardharajan of HVS India, while talking on international hotel chains’ interest in India.

Las Vegas-based hotel-casino MGM Grand has also firmed up its plans to check into the hospitality district near the International Airport in New Delhi. “The hospitality market in India is one of the most dynamic in the world,” a senior executive at MGM Hospitality said.

Hong Kong-headquartered Mandarin Oriental is in advanced stages of talks with developers for India foray. A deluxe room in Mandarin Hotel in New York would set you off by $695 for a night, and the suite could cost as much as $1,695 a night.

Dubai-based super luxury hotel, Jumeirah, is in negotiations too for bringing its property to India. One and Only Resorts, another high-end brand with presence in Mexico, Bahamas, Dubai, is also keen on the India market and has done research on it. London-based Langham and Bangkok-headquartered Anantara are also among the other luxury chains looking for opportunities in India.

So, what sets these luxury chains apart? “While most hotels provide a spa facility, swimming pool, great furnishing etc, it is the quality of service that these brands provide which makes them luxury. They treat you as if you are the only customer they have,” said Chintan Patel, director – real estate and hospitality services, Ernst & Young. This means that a guest’s needs, from the kind of pillow he requires to the individual eating habits, are attended to in a customized manner.

According to industry players, foreign tourists have a comfort level with international brands as they are more familiar with them compared with Indian chains.

Behind schedule
Some luxury brands like Sofitel and Shangri La are running late in Mumbai, said an industry expert. So is Ritz-Carlton in Bangalore, he added. It is because these are capital intensive projects and they come with a long payback time as the investment per key (room) can be upwards of Rs 2 crore. Also, finding the ‘right fit’ in terms of a real estate partner and location is a challenge for hospitality chains.

To skirt the various hurdles in setting up a new hotel venture, are showing interest in buying existing properties. “A lot of investment goes into building branded luxury hotels. It is easier to buy a property than starting a greenfield project,” Vardharajan said.

First Published: Mon, December 12 2011. 00:30 IST