IHG Hotels & Resorts, one of the world’s leading hotel companies with more than 6,000 hotels across 18 brands, is betting big on India. Witnessing significant growth in the premium and luxury segment, the company is also planning to expand its presence in secondary cities in India by catering to the rising demand for branded accommodation. In an exclusive interview with FE, Sudeep Jain, MD–southwest Asia, IHG Hotels & Resorts, talks about the market and improved business scenario in India, brands that have worked in the country, long-term prospects of the sector and more. Edited excerpts from the interview:
At present, IHG has 45 hotels in southwest Asia, across five core brands, of which 41 are in India. However, in the luxury portfolio, you have only two InterContinental and two Six Senses properties so far. Have you been deliberately slow in approaching this segment in India?
Not at all. We have been expanding our portfolio of luxury and lifestyle brands in various markets, including India. Preferences of luxury travellers are evolving and we are committed to offering unparalleled experiences that cater to their discerning tastes. This approach allows us to select the right partners in the right locations. However, with the opening of Six Senses Fort Barwara in Rajasthan in October 2021, we have cemented IHG’s position in the luxury segment in India. We also added Six Senses Vana into our portfolio this year. We are in discussions to add more InterContinental hotels to gateway cities in India. This year has been good as we witnessed significant growth in the premium and luxury segment during the first half, compared to the same periods in 2022 and 2019, with the RevPAR (Revenue Per Available Room) seeing a 30% increase.
There are over 28 Holiday Inn and Holiday Inn Express properties in India representing almost 70% of the operating portfolio. With increased consumer demand and positive sentiments for domestic travel this season, how do you plan to capitalise on this segment?
Our Holiday Inn and Holiday Inn Express brands have worked extremely well, and the market is primarily driven by domestic tourism. An attractive brand proposition in line with market demand and a low cost of development, the Holiday Inn brand family makes for an attractive investment choice for owners. Both brands represent 72% of our operating portfolio and the majority of the current pipeline will be key to growth strategy.
What sort of investment sentiments do you see post-pandemic when it comes to hotel development?
Our business has grown by leaps and bounds since Q2 of 2022. There is a pent-up demand for quality and branded accommodations, and a renewed interest in hotel development from owners who are increasingly recognising the long-term prospects of the sector. We are exploring conversion opportunities where owners of existing and independent hotels want to associate with IHG.
How do you position IHG as a brand when compared to Marriott or Hyatt?
IHG is in India for the long haul, and we are focused on long-term growth. Our distinctive brand portfolio, consisting of Six Senses and InterContinental Hotels and Resorts in the luxury and lifestyle sphere, Crowne Plaza Hotels & Resorts in the premium segment, and Holiday Inn and Holiday Inn Express in the mainstream segment, sets us apart as a versatile player.
How do you plan to cater to the wedding segment?
We are experiencing a strong demand and a growing preference for personalised and exclusive experiences, alongside lavish buffet spreads, which indicate an uptick in wedding budgets and guest lists. Our most popular hotels such as InterContinental Chennai Mahabalipuram Resort, Crowne Plaza hotels and, now, Six Senses Fort Barwara are poised to cater to the growing demands and preferences for big lavish weddings. The targeted campaigns and customised rates draw wedding bookings and the service team is trained to deliver guest experiences with personalisation.
Are you looking at bringing new brands like Staybridge Suites or luxury offerings Regent and Kimpton to India?
We are optimistic about debuting more brands, but this has to be at the right location and with the right partners. We are currently in discussions and hope to bring them to India soon.
Your lifestyle brand, voco, which you launched in Uttarakhand this year, seems to fall in a different portfolio. Does this change the market scenario?
We introduced our premium brand, voco, to India and the southwest Asian region in Q4 of 2022 with signings in Jim Corbett National Park and Gurugram. In Q2 2023, we signed our third voco property in Goa with voco Goa Arpora. Voco will be the seventh brand from IHG’s global portfolio to enter the Indian market. It was launched globally in 2018. This brand will be an opportunity for our owners to access the premium segment quickly, driving returns at speed.