Marriott hotel is all set to bring two new brands – Ritz Carlton and Fairfield – to India, next year. Rajeev Menon, area vice president for India, Pakistan, Sri Lanka and Maldives, Marriott, speaks to Ruchika Chitravanshi about the target to set up 50 hotels by 2015-16 and how the chain coped with slowdown.
This year has not brought much cheer to the hospitality industry...
It has been a reasonably challenging year. Things have slowed down due to the economy and the amount of additional supply coming into the market. The industry consultants are independently reporting that the revenue per available room (RevPAR) across India has gone down by about 7 per cent compared to last year. However, our RevPAR is up by over 6 per cent this year.
Why were you able to do better?
A number of things play out when you are in a tougher market. Our brands are best positioned in their categories. We have a very strong focus on MICE (meetings, incentives, conferences, exhibitions). We have continued our expansion with additions like Marriott in Kochi. We will open another Marriott in Bangalore, Courtyard in Bhopal, J W Marriott in Delhi’s Aerocity by the first and second quarters, next year.
Marriott in Delhi’s Aerocity has been delayed. Why?
It is a large hotel with 520 rooms, it takes time. Typically, three months here and there, is normal. We are targeting to open it in the first quarter next year. We will also have Courtyard in Pune by then.
What are the projects in the pipeline?
We are still reasonably confident that we will have close to 50 operating hotels by 2015-16. We will introduce Ritz Carlton and Fairlfield by third quarter which will take us to seven brands in India. Our luxury brand Edition is a couple of years away. It is not about the number of brands but the research you do and how you launch the brand.
Out of all these brands, what will be your growth driver?
Courtyard has been very strong for us, and for the right reasons. We cannot open a JW Marriott in a secondary and tertiary market. By second quarter next year, we will have 10 Courtyards operational in India. And we have another 25 under construction. Once we open Fairfield, it will catch up and move very quickly. And those two brands will be our growth drivers.
With the addition of more properties, what will be the manpower addition?
We currently have around 6,000 associates across the country and as we open more hotels we will hire more people. In 2013, we would be hiring around 1,000-1,500 more associates. Our focus has always been to localise positions across the country as much as possible. We have consistently been recognised as the top 10 companies to work with.
As you are purely a management company, how do you keep pace with changing times, in terms of design and service?
The owners have been very supportive. Goa Marriott was the first hotel that we opened in December 1999. The ownership has worked with us and totally refurbished the hotel. They spent around ~ 65-70 crore on redoing all the rooms, restaurants, banquets. Right now, we are in the midst of redoing the J W Marriott, Mumbai. There has been considerable amount of support to get our hotels ready for the next cycle.
Have you cut back on pipeline due to tighter liquidity?
We have not revised our expansion plans at all. There is no denying that there is a liquidity crunch in the market. There are approval, bureaucratic issues and slow decision making. When we sign a management agreement, it is only after the owner has the required funding, land and has drawn up the plan. One would think that it would take one to two years to open a hotel in India but it takes three to four years.
What are your expectations from the occupancy levels for 2013?
Occupancy levels will be a little over 70 per cent. We believe that RevPAR will grow. Not in double digits, there will be growth due to the increase in demand and as business travel improves. We are more positive about 2013 than we were three months ago.
