Shantha de Silva, Head of IHG’s South West Asia region, gives insight on expan¬sion plans and what makes IHG strong in southern India.
ENUMERATE INDIA EXPANSION PLANS OF IHG.
Currently IHG has 28 operating hotels in India. We recently have opened Holiday Inn Kolkata Airport and then we opened Holiday Inn Chennai OMR. Now we have 30 operating hotels. If you look at our 3-4 year plans, it’s pretty much double of what we have today. Going forward we have a pipeline of 36 hotels for the next 3-5 years. Our expansion primarily is in Holiday Inn and Holiday Inn Express categories. We expect to get 100-150 hotels in the next 10-15 years. That’s our ambition.
IHG IS VERY STRONG IN SOUTH INDIA, ESPECIALLY, CHENNAI. IS THERE ANY SPECIFIC REASON FOR THIS?
We are very strong in DELHI/NCR region as well. We have about eight operating hotels today in that region. Chennai is special for IHG because this is the first city in the country which has all four IHG’s operating brand in India.
We have InterContinental, we have Crowne Plaza, Holiday Inn and Holiday Inn Express. It’s about having a right location, right partners and right opportunities to develop.
WHICH ARE THE OTHER CITIES YOU LOOKING IN INDIA?
We want to grow in Mumbai, and Bengaluru. In fact, we are opening Holiday Inn Express properties under the collaboration of Brigade, who is our partner in Holiday Inn Chennai OMR IT Expressway as well. One of it should open within the next year or so. Second one will open soon after. So yes, we see a lot of growth in Bengaluru.
WHAT ABOUT TIER II AND III CITIES?
I think if the opportunity will come, we are open to that. India has a huge domestically given demand and as the domestic market is expanding, there is lot of, potential to grow. The government’s initiative have encouraged the airlines to go smaller. So I see lot of opportunity in these areas. We see Holiday Inn AND Holiday Inn Express expanding beyond the key metros.
AMONGST ALL THE BRANDS OF IHG WHICH BRAND IS DOING THE BEST IN THE COUNTRY?
I would say every brand of IHG is doing well because each brand caters to different audience. If you look from a growth perspective, Holiday Inn and Holiday Inn Express is where we are doing phenomenally well.
More than half of our portfolio is Holiday Inn and Holiday Inn Express. If you look at our pipeline, we have 90 per cent of our hotels in these two categories.
With the growing middle class, there is a huge opportunity to cater to that class as this is the segment that is travelling rapidly and Holiday Inn pretty much a synonym with this group of people.
Holiday Inn is one of the most recognised brand globally. In India, it’s one of the most preferred brands in its category. If I have to pick a brand which currently is strengthening its growth, that would be Holiday Inn and Holiday Inn Express.
THE YEAR LOOKS UNFAVOURABLE FOR THE INDUSTRY, WITH DEMONITISATION, MAKING SERVICE CHARGE OPTIONAL, THE RECENT RULING OF SUPREME COURT ON LIQUOR BAN. WHAT’S THE WAY FORWARD IN THESE TOUGH TIMES?
We need to work with the authorities to work out solutions which are hindering the growth of the hospitality sector. There still is a lot of talk around liquor ban on how things can be worked out. Yes, there are challenges but then there are a lot of opportunities as well.
If you look at the Indian hospitality market, in the last three years, there has been a stabilisation of demand and occupancies have reached the level of 60 after a long time.
We see that going forward as well. With the demand growing, we still are very hopeful of the growing opportunities.
Yes there will be challenges, but over a period of time, we will see things stabilising. Some of the challenges get stabilised with time, with some we have to figure out a way to work around them.
WHAT IS YOU TAKE ON THE SOUTH INDIAN HOSPITALITY INDUSTRY?
Its exciting, its vibrant. I am really excited about Chennai. There is a lot of potential, there is a lot more we can do. There is a lot of potential to grow tourism from outside. It’s a state of oppourtnities. We want to grow as we move ahead in time.
