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Marquee hotel brands are moving to India’s industrial towns to drum up business in places set to lead the country’s next phase of growth. Big hospitality brands such as the Thailand-based Dusit group, Sarovar Hotels, and Treebo have set their sights on these so-called micro markets, including Sriperumbudur, Bhiwadi, Nashik, and Dholera.
According to industry executives, these industrial towns will expand not only to employ more people but will also attract global business leaders as India positions itself as an alternative manufacturing hub to China, even in the face of the new tariff regime imposed by the US government.
Jatin Khanna, chief executive officer (CEO), Sarovar Hotels, said, “We are setting up a Sarovar Portico in Sriperumbudur, an industrial hub. This is a micro market with just one existing hotel but huge demand, which is why we are setting up our own hotel and opening up in the next 90 days.”
The hotel, spread across 2.5 acres, will have 156 rooms, 7,000 square feet conference and meeting areas with amenities such as restaurant, bar, spa, gym, and pool.
Meanwhile, hospitality major Marriott International has recently partnered with SmartHomes Infrastructure to build a five-star hotel in Dholera, India’s up and coming semiconductor hub. The 200-room hotel near the proposed Dholera International Airport will bear The Courtyard brand name.
States and the Centre are encouraging infrastructure expansion in and around these industrial hubs. The Union government has identified 12 new industrial corridors and the service industry is thus finding confidence to take the plunge.
These corridors, which includes the Dholera Special Investment Region part of the Delhi-Mumbai Industrial Corridor, are under the ₹28,600 crore National Industrial Development Programme which will enable the creation of greenfield smart cities of global standards that will attract global value chains.
Thai hospitality chain Dusit has identified Tier-II and -III markets as avenues of growth. It plans to tap underserved locations and is preparing to launch six hotels to cater to growing demand in cities such as Raipur, Chhattisgarh and Bhiwadi, Rajasthan.
“Destinations like Bhiwadi have a lot of potential. It is an underserved market with a lack of branded hotels, forcing international customers to stay in Gurugram and drive two hours to reach the industrial hub,”said Deepika Arora, head (India), Dusit International.
Treebo Hospitality Ventures (THV), parent company of the budget brand Treebo, and the newly-launched midscale brand Medallion have also identified small industrial towns as opportunities for expansion.
“In terms of growth, we are only scratching the surface. The economy segment has about 100,000 hotels – but these are unorganised. Over the next decade, we aim to have 2-3 per cent share of this market. Meanwhile, the midscale segment is not too crowded currently and we want to gain a bigger share of it,” Sidharth Gupta, cofounder and CEO, THV, told Business Standard recently.
With over 800 hotels and more than 16,000 keys, 30 per cent of Treebo’s portfolio is in small cities. Additionally, it has planned 500-700 midscale hotels in the coming years.
“We have identified Tier-II and -III markets as the real drivers of growth. As many as 40 per cent of our portfolio is in the seven big metros, which will continue to offer growth. But the excitement really is in the next 100 cities. We are going to places like Thrissur (in Kerala), Chandrapur and Nashik (in Maharashtra), Siliguri (in West Bengal), and Haridwar (in Uttarakhand),” Gupta said, adding that these cities offer massive headroom.
Nagpur, where THV has 23 hotels, clocks an occupancy of over 70 per cent, according to the company.
“These cities are seeing a lot of economic activity. Many are seeing the rise of special economic zones, industrial corridors, and highways close by. Nagpur, for example, is a massive warehousing hub and is now becoming an information technology hub. These factors are supplementing the pre-existing trade-driven economy in the cities, which is adding up to drive opportunity and occupancies,” Gupta said further.
Expanding Reach
* Global chains Marriott & Dusit, Indian majors Sarovar & Treebo paving the way
* An upcoming segment as India expands manufacturing hubs, builds 12 new industrial corridors
* Potential clientele coming from global manufacturing companies and GVCs heading to India
* Hotel chains heading to Dholera, Sriperumbudur, Bhiwadi, and Nashik
