August 2008.That?s when Peter Henley quit as Vice-President of Morgan Stanley Properties UK and took charge of the Amari Hospitality Group as its CEO. Amidst all the economic uncertainty, Henley got a single-point brief when he joined the privately-held hospitality group??to takethe company forward?.
?It was a tough period, yes. First the economic slowdown hit us, then the political strife in the country, and, more recently, the H1N1 scare,? he recapitulates. The unfortunate development literally spelt doom for the country, which draws 6% of its GDP from the tourism industry and employs over a million people. None of that deterred Henley though. ?Being a private company, Amari didn?t have the stock markets to answer to. It had virtually no debts and there was ample cash in the company. We did not have to lay off any employee or cut anyone?s pay,? Henley adds. Also, to stimulate tourism, the Thai cabinet agreed to waive the visa fee for three months, cut the landing fee by 20% for regular flights and waive property tax for hotel operators. Entrance fees for national parks was also exempted. Assured, Henley took the task of ?making the inward-looking company international? hands on. A new logo, ?Colours & Rhythms? replaced the old ?Hotels & Resorts? even as the management was restructured.
At the same time, Henley began to identify the top ten business generating markets for Amari and zeroed in on India, China, the Middle East and Russia. ?We found that people in these regions have a greater preference for brands. However, you?d be surprised to know that there are less branded hotels in all of India than there are in Manhattan alone.? Interestingly, India also recorded a growth of around 10% in terms of overall volume of business in 2009, contributing over 90,000 room nights for Amari. The Group is now aiming to ?open 40 properties by 2018 in the Asia-Pacific region, including about seven in India alone, all in the mid-upscale segment?.
A corpus of $44.1 million has been earmarked for the expansion project, 15% of which is expected to be invested in India. The plans sound ambitious indeed, given the fact that the location of the property, the developer and the details, such as the number of rooms etc, are yet to be decided. The final announcement is likely to come in April this year and either Delhi or Mumbai will be the first to see an Amari property come up. For subsequent developments, Amari also has tier-II and III towns on its radar.
But doesn?t it worry him that the foreign tourist arrivals in India during 2009 declined by 3.2% to 5.11 million, as compared to the previous year, leading to a drop in the foreign exchange earnings from tourism by 3.06% to $11.39 billion? ?I know we are late coming to the party and India is a difficult market, undoubtedly. But there is a lot of potential too. New airports have opened in Hyderabad and Bangalore; there is no dearth of low-cost carriers. And a lot of Thai tourists come to India for the Buddhist pilgrimage,? says Henley, putting his optimism in perspective.
Though he considers ?2010 to be still a struggling phase for the economy?, he is certain that 2011 will be better. And that?s when Amari?s first property in India is also likely to come up. Amari has equally ambitious plans for China as well, looking at Shanghai and Beijing to begin with. Amari is also doing the needful at home. The Bangkok and Phuket properties are being refurbished and soon its first serviced apartments are slated to come up in Bangkok, along with a new property in Hua Hin.
