IHG Hotels & Resorts, which has 41 hotels with 7,136 keys across five brands in India, is banking on the Holiday Inn and Holiday Inn Express brands to drive its growth in the country, a senior company official told FE.
With Holiday Inn and Holiday Inn Express brands together making up over 68% of IHG’s portfolio in India, the company’s South-West Asia MD, Sudeep Jain, said the two brands are going to remain the “driver of growth” as economics work in their favour. “The outflow of capital to build these hotels is much lower than the big hotels,” Jain said.
IHG’s portfolio in India includes 15 Holiday Inn hotels having 2,818 rooms and 13 Holiday Inn Express hotels with 1,774 rooms. Also, there are 10 Crowne Plaza hotels with 2,332 rooms, two Intercontinental hotels with 164 rooms and one Six Senses hotel that has 48 rooms. While Six Senses and InterContinental brands cater to the luxury segment, Crowne Plaza sits in the premium segment, and Holiday Inn and Holiday Inn Express come under the essentials segment.
The occupancy levels at IHG properties have crossed pre-pandemic levels. The average occupancy at its hotels in the first half of CY22 was close to 67%, which was 26% and 2% higher than the same period in CY21 and CY19, respectively. The company is projecting the country-wide occupancy in the second half of this year to be nearly 74%. In terms of RevPAR (revenue per available room), IHG recorded an increase of 140% during the first six months of CY22 in comparison to the corresponding period of CY21.
The industry-wide occupancy at hotels in CY2019 was 66.2%, while the RevPAR stood at Rs 3,967, according to HVS Anarock. Owing to Covid, occupancy and RevPAR across the industry declined to 33-36% and Rs 1,500-1,800 in CY2020, respectively. The Indian hotel sector ended CY2021 with a country-wide occupancy of 42-45% and RevPAR of Rs 1,800-2,100 as a result of a strong recovery in domestic leisure travel, and partial resumption of business travel, as well as wedding and social events.
Jain pointed that though the business was down about 40-50% at the peak of the Covid, it was not universal. “In India also, there were hotels of ours that did very well during the pandemic, the reason being quarantine business,” he said, adding that not every hotel’s top line and bottom line took a hit to that levels.
The corporate segment was contributing almost two-thirds to the company’s business before the pandemic, with the remaining one-third coming from the leisure segment. According to Jain, it has more than flipped today.
IHG is also planning to bring brands like Regent, Vignette and Kimpton to India. “These three brands are right for India and with the right partners in the right location, we will bring them here,” Jain said.
On the expansion plans in South-West Asia (India, Bangladesh, Nepal and Sri Lanka), he said that almost 46 properties are under development. IHG was signing about 12-14 deals every year before the pandemic. “I think we will be back with an increased volume in CY22 and CY23.”
IHG employs nearly 5,000 individuals at present across its 44 hotels in South-West Asia. “This number is between 15-20% lesser than what was pre-pandemic,” Jain said.