ibis Hotels, a joint venture between InterGlobe Enterprises and Accor Asia Pacific, has exhibited a growth of 10 per cent compared to the previous year, with a significant contribution coming from improved rates, said Tejus Jose, Director of Operations, ibis and ibis Styles India. “The company is poised to surpass the revenue figures achieved in 2023, showcasing the effectiveness of strategic initiatives and market responsiveness. Looking ahead, the growth outlook for the next quarter and the entire financial year remains optimistic, as the company continues to leverage its strengths and capitalize on market opportunities to sustain and potentially exceed this positive trajectory,” Tejus Jose said in an interaction with FinancialExpress.com.
Since its inception, the ibis brand has expanded into a network of 23 hotels across 14 cities in India. Globally, the brand has over 2200 hotels in 70+ countries. “The joint venture between InterGlobe Enterprises and Accor Asia Pacific, established in 2004, is to develop a network of ‘ibis’ hotels throughout India, Bangladesh, Nepal and Sri Lanka. This partnership combines InterGlobe’s expertise in hospitality with Accor’s global hospitality portfolio. Under this JV, Accor currently operates 61 hotels under 10 operating brands in India and South Asia including Raffles, Fairmont, Sofitel, Pullman, Mövenpick, Grand Mercure, Novotel, Mercure, ibis and ibis Styles,” he stated.
Here are the edited excerpts from the interaction…
Tell us about your (ibis) presence across India and globally.
Since its inception in 2008, ibis hotels have been a cornerstone of hospitality in India, with the Gurgaon Golf Course marking its pioneering launch. In a joint venture with InterGlobe Hotels (IGH), Accor brought forth the ibis brand, and it has since blossomed into a network of 23 hotels across 14 vibrant cities in India, showcasing a remarkable growth trajectory. The essence of ibis is not just about providing a place to stay; it’s about creating a convivial, cool contemporary, caring, and proactive environment for our guests. We take pride in embodying these values across our 2200+ hotels in 70+ countries globally.
Our hotels are strategically located for the utmost convenience, ensuring that guests can effortlessly navigate and explore the surrounding areas. Additionally, our spaces are thoughtfully designed to be Instagrammable, offering a visual feast for our guests and making their stay not only comfortable but also aesthetically pleasing.
You just launched your newest ibis property in Goa’s Vagator. What would you call its USP? How is it performing in terms of booking, footfall, etc?
Our latest addition, ibis Styles Goa Vagator, the 23rd ibis property in India, stands out for its strategic location in North Goa, offering a blend of contemporary design, vibrant ambiance, and top-notch hospitality. Catering to those seeking tranquillity and vibrant nightlife, it’s positioned near popular nightclubs and cafes, ensuring a convenient stay with historical charm and modern amenities.
The property’s focus on contemporary art and culture, reflected in curated pieces, sets it apart. With positive responses from guests, steady bookings, and footfall since launch, ibis Styles Goa Vagator has resonated well with travelers. December saw robust demand and rates exceeding Rs 10k during the New Year window. Currently ramping up, the hotel expects to reach full house by the end of its first full calendar year.
How is the hotel industry doing right now? What percentage rise in booking are you seeing at your properties currently (in comparison to last year and Covid-affected years)? What kind of growth are you expecting in the coming months?
The current sentiment and on-ground performance of the hotel industry is buoyant and promising, with a projected revenue growth of 11-13 per cent anticipated for the fiscal year 2024-25, following a substantial 15-17 per cent growth expected in the current fiscal year. According to Crisil Ratings, this positive trend is attributed to a consistent domestic demand and an increase in foreign travellers.
The industry’s operating performance is expected to remain robust in the near term, fueled by strong demand dynamics and a moderate influx of new supply. Having recovered from the Covid-affected years by the end of 2022, the industry has displayed resilience and positive momentum. Looking ahead, we anticipate sustained growth in the coming months, driven by the ongoing recovery in travel patterns and a favourable economic environment.
In 2023, the industry witnessed a robust year, with most properties experiencing a remarkable 45-50 per cent growth in RevPAR compared to pre-Covid 2019 levels. This growth was evident in both occupancy and rates, with all hotels recovering to 2019 levels in both parameters. The outlook for 2024 primarily focuses on rate growth, as occupancies have already surpassed the 75 per cent mark, showcasing a strong recovery and indicating a positive trajectory for the industry.
Which cities, or regions are seeing the highest number of bookings currently?
At present, the hotel industry is experiencing its highest demand in Delhi, particularly in the vibrant Aerocity area, where we are witnessing an unprecedented surge in bookings, reaching all-time high demand. In Mumbai, despite the emergence of new hotel openings in the airport region, the city continues to record consistently high occupancies, showcasing the resilience and sustained popularity of the destination among travellers. These trends underscore the dynamic nature of these markets, and we remain focused on providing exceptional hospitality experiences to meet the growing demands in these key cities.
What kinds of booking are you witnessing at your properties – family stay, solo travelers, groups, short stay, staycation, biscation, etc?
Our hotels attract a diverse range of guests, addressing various needs and preferences. While we are a preferred choice for intimate celebrations like birthdays and anniversaries, as well as hosting MICE events for corporates, our primary demographic consists of families. This includes millennial couples and those with Gen-Z kids, providing them with a comfortable and memorable stay. Moreover, we also cater to solo travelers in search of a peaceful retreat, guests on short weekend getaways, and those seeking a relaxing staycation experience.
What kind of marketing strategies and offers are you using to get more bookings? Are you expecting a demand increase during the upcoming festive season and the wedding season?
During peak festive and long weekend periods, ibis Styles consistently achieves high occupancy levels, attracting a diverse range of guests. To enhance the guest experience, we leverage Accor Live Limitless, our lifestyle loyalty program, offering exclusive benefits and unique experiences. Recently, we introduced a ‘2X Reward Points Dining’ campaign at our restaurants and bars across India and Sri Lanka, providing guests with additional incentives to choose our properties.
In line with catering to various guest needs, we extend rewards and status points to Accor members organizing events at any hotel in the region, ranging from birthday parties to weddings. As an additional incentive, our current offer includes a complimentary one-way airport transfer and a free drink at the bar for guests booking their stay.
Anticipating the upcoming wedding season, we project a significant increase in demand, with a corresponding rise in footfall. Our strategic marketing initiatives and tailored offers aim to not only meet but exceed the expectations of our guests during these festive and celebratory occasions.
How is the average room rate (ARR) looking like right now? Are you planning to increase the rates in the coming months?
At present, the average room rates are hovering double digit growth in ADR vs last year based on the city. Looking ahead, we anticipate stability in rates during Q2, with a potential upward trend in Q4. Notably, several cities, including Hyderabad, Kochi, Mumbai, and Delhi, are experiencing all-time high rates, driven in part by significant events. While we remain vigilant and responsive to market dynamics, any decision to increase rates in the coming months will be carefully assessed to ensure it aligns with the evolving demand and economic conditions. The quantum of the rate hike, if implemented, will be determined based on a strategic approach to maintain a balanced and competitive pricing structure.
Finally, what’s your take on the growth of India’s tourism sector? What kind of policies are helping the growth and what more is required from the government or even the hospitality industry overall?
India’s travel & tourism market is poised for substantial growth, anticipated to generate a revenue of $23.72 billion in 2024. The projected annual growth rate (CAGR 2024-2028) of 9.62 per cent is set to propel the market volume to $34.25 billion by 2028, with Package Holidays emerging as the largest market, reaching $10.48 billion in 2024.
The Union Budget 2023 has aptly recognized the immense potential of the travel and tourism sector, paving the way for promising initiatives. The commitment to developing 220 airports by 2025, an allocation of Rs 2.4 lakh crore for Indian Railways’ capital expenditure, and efforts to strengthen coastal shipping along both eastern and western sea lines instil optimism in the tourism landscape. Programs like Swadesh Darshan 2.0, Dekho Apna Desh, and the Vibrant Village Programme not only target attracting NRI tourists but also aim to stimulate domestic travel, showcasing India’s rich and diverse offerings.
Despite these positive strides, India’s hospitality sector still trails behind its Asian counterparts, with only 160,000 branded hotel rooms in the organized segment. In comparison, China boasts nine times more hotel supply, highlighting a significant opportunity for growth and development in India’s hospitality industry. The current situation underscores the need for increased investment and expansion to bridge this gap, positioning India as a competitive force in the global hospitality landscape. Collaborative efforts from the government and industry players will be crucial in unlocking the full potential of India’s tourism and hospitality sector, ensuring sustained growth and enhanced competitiveness on the global stage.