Leading the luxurists

The luxury segment in India will expand at a healthy pace, feels Paul M McManus, president and CEO of The Leading Hotels of the World. By Neeti Mehra

Paul M McManus President and CEO The Leading Hotels of the World

The luxe segment has been a precursor to other hospitality segments in India. Yet, every segment, including the former, is suffering from a paucity of supply. According to Paul M McManus, "Historically, India has had a shortage of luxury accommodation, which shows the vast potential for growth."

From a global perspective, he feels that after an extended period of overheated M&A activity in the luxury arena, it is likely that the industry will apply the brakes to runaway expansion and development leading to a consequent slowdown in the proliferation of what he calls 'faux luxury' brands. "Diminished access to easy credit will restrict these 'would be' entities to develop infrastructures or invest in upgrading goods and services," he explains. The result? A shake-up or a shake-down that will see these veneer brands stumble out while the legitimate, time-honoured luxury brands solidify their stature in the market.

Focus India

McManus firmly believes that opportunities exist for many top-tier Indian hotels to move beyond the basics into new areas of luxury hospitality offerings, including luxury destination clubs, spas, villas and private residences, which will all add value to the core business. "There is also room for more regional growth in India in the three-star hotel category. We anticipate that much of that growth will be funded by Indian investors," he says.

Improvement across infrastructure will create an assuring and a welcoming environment for travellers. In this, the government will play a major role. "The government can also make an enormous contribution to the future of the industry in India by supporting hospitality education," he says, alluding to the manpower crunch afflicting it.

Overall, his outlook for the country is rosy. "We anticipate that RevPARs and occupancies in India will continue to grow. Despite current global uncertainties, we are cautiously optimistic that other mature markets will enjoy modest growth as well," he says.

Speaking of trends, he says, "There is a strong urge among affluent travellers for transformational travel - they are looking for something deeper and more personally rewarding than just a luxurious hotel and fine cuisine." This is an opportunity for India to exploit. "India already offers limitless possibilities for such transformational and indeed life-altering travel experiences," he points out.

He believes that India offers the luxury customer fulfillment of expectations when it comes to hotel product, service and the true luxury experience, owing to its tradition of exceptional hospitality. "India is already well-positioned for even more growth in this area," he says.

Looking ahead

Despite the credit crunch and intensified scrutiny in all areas of borrowing and lending, he foresees excellent opportunities for buyers. "While it has been devastating for some market players and real estate deals, tighter financial markets will bring an end to the unbridled M&A activity and will likely result in fewer 'plunder-and-pillage-the village' acquisitions and rapid re-sales in the luxury segment," McManus states.

He believes this lending crunch will prove a boon for long-term investors - buyers with cash who are interested in truly investing in and nurturing luxury properties. The 'weeding out' of the faux brands will leave a positive impact. According to McManus, it will restore the legitimacy of the whole segment, reestablishing standards and credibility for top-tier properties.

To stay ahead in the game, it will be imperative for companies to continue to make investments in technology to remain competitive. "In order to meet and exceed the complex demands of the affluent traveller, it will be crucial to offer optimum service levels via whatever channels they choose to use," he explains.

Regarding the company's plans, with Eastern Europe, the Middle East and Far East on the growth radar, Leading Hotels has opened sales offices in Dubai, Mumbai, Shanghai and Kiev to support both inbound and outbound traffic and tap new segments.

McManus believes

In the current economic climate, the luxe segment will survive vagaries by providing memorable and gracious - yet discreet - service. Sophisticated travellers are looking for something beyond a predictable and standardised experience. Thus, distinct standalone hotels that have aligned themselves with a strong international brand can have a great impact on the industry vis-à-vis standardised chain hotels. "We encourage our hotels to emphasise the attributes unique to their destination and culture," he says.

He believes that the winners will be those brands that provide excellent service levels, with highly trained multilingual staff and familiar F&B offerings, recognising the cultural needs of international travellers. The brand that delivers on its promise of excellence will be looked on to do more. "Perhaps even more importantly, brands will need to cultivate talented and innovative staff to stay ahead of the competition," he says.

For an individual traveller, service is the key element in capturing their loyalty. "It becomes even more important as hotel room rates escalate in this value-for-money scenario," he avers.

Partnerships too will be paramount in the future. "Partners in the industry can make tremendous contributions by fostering respect for the environment and the impact travel has on a destination, by actively supporting socially-responsible travel and endeavoring to benefit the local community, thus helping to elevate the entire concept of tourism from that of simply visiting a country to learning about its people and its history," he says in conclusion.