How Can The Indian Hospitality Industry Transform Into A Goliath?

Neeraj Govil, Area Vice President–South Asia, Marriott International, in a conversation with Deepali Nandwani talks about the bottlenecks facing the hospitality industry, the perception that India faces as a luxury leisure market, the might of the domestic traveller who is driving the industry, and the possible solutions to achieve exponential growth and help India attract well-paying, discerning global travellers.

The Marriott group has done well in the past two to three years and has a larger portfolio of hotels. What is Marriott’s game plan for India?

We entered India in 1999 with the Goa Marriott property. We have essentially grown through management contracts and stayed away from franchising initially. We are doing both now. Essentially, when you come to a market like India as an international player, you want to make sure that the elements needed to deliver a franchise experience are in place. If you go and put your name on a franchise agreement and if the operator is not able to deliver the experience, you will do irreparable damage to your brand. We were cognizant of that fact which is why we chose to grow fairly slow.

I think the expansion has happened over the last two years… Yes, we have grown organically, we have positioned a number of our brands in Tier-1 markets—Mumbai, Bangalore, Hyderabad, Pune. We went to about 35 hotels and after the acquisition of Starwoods last year, we overnight doubled our portfolio in India. It brought in seven new brands into our portfolio and a big piece of the franchise business. We are continuing to see a growth across all our brands in India.

We are now seeing growth in the resort segment; we are witnessing growth in Tier-2 and Tier-3 markets, and we are also seeing growth everywhere there is infrastructure development. For example, Aerocity in Delhi has developed into a significant business hub. We now operate two hotels here. And as our larger cities are developing, we have begun seeing the emergence of micro-markets within the cities. The infrastructure is stressed, the travel time from one area to another is too much, and people tend to hang out in one part of the city.