The Hyatt andaz

With long-term ideals in mind, Ratnesh Verma, senior vice president - real estate and development, Hyatt Hotels and Resorts, believes that the hospitality growth story is here to stay. By Neeti Mehra

Ratnesh Verma Senior vice president - Real estate and development

The profitability and rapid advancement of the hospitality industry has silenced sceptics who believed that the buoyancy was a short term phenomenon which would evaporate once new hotels were launched. "There are enough positive indicators such as the near eight per cent economic growth, growth in SEZs with a planned investment of US$ 213 billion over the next 10 years, modernisation and expansion of airports, and the fact that IT growth has been nearly 30 per cent over the past 10 years. This, coupled with the paucity of room supply indicates that the current growth will continue," says Ratnesh Verma, senior vice president - real estate and development, Hyatt Hotels and Resorts, adding that it will take a number of years for India to catch up with mature tourism markets.

Speaking optimistically of the future, Verma says, "From an eight-brand hotel market a few years ago, India will be a forty- brand hotel market by 2010, redefining both the personality and structure of the hospitality industry as it stands today." And Hyatt Hotels and Resorts expects to play a major role in this story.

Focus India

The company will follow the management services route in the country - however, Verma reveals that they are not averse to making strategic investments in hotel developments, the decision for which would depend on various factors like the market, location, business partner and projected ROI.

"We do not franchise any of our brands in India and have adopted the management agreement model in this market for all our hotels. This is important to consistently deliver the brand experience and hence maintain brand integrity. We will continue with this model for our future developments in India," he says. Hyatt's pricing philosophy is to maintain price integrity and parity across all distribution channels, ensuring that customers get value for the price they pay. Says Verma, "Hyatt Hotels and Resorts was the first hotel company in the country to adopt a single currency and single pricing strategy. The actual tariffs for each of our hotels are dependent on the dynamics of each market that they operate in. However, we will ensure that short term gains overrule the life time value of a customer." The company also endeavours to innovate in F&B offerings in its existing and upcoming hotels in India with new concepts across hotels, such as China House in Grand Hyatt Mumbai and China Kitchen in Hyatt Regency Delhi - both modern interpretations of traditional Chinese dining experiences.

Looking ahead

"Each of Hyatt's brands are very clearly differentiated from each other in terms of target customers segments, brand positioning, brand attributes, product configuration and service processes. This minimises 'cannibalisation' amongst our brands and gives us a competitive advantage in multi-brand markets. We can thus reach out to mutually exclusive customer segments with our different brands and maximise combined market share," states Verma.

Regarding the challenges facing the industry, Verma lists the manpower crunch and the search for suitable partners. "There are a lot of entrepreneurs and organisations that are diversifying into the hospitality business. Not all have a strategic outlook, financial resources and execution capability which may result in projects getting delayed or, in the worst case, not getting completed," he says. His take on RevPARs and occupancy for the next year is positive. "The occupancy in all our hotels ranges between 75-80 per cent and we project a price growth in all markets, depending on of the dynamics of each market," he says.

The company has also introduced a new initiative - 'yatt'it', which is a new on-line travel community from Hyatt Gold Passport - its guest loyalty programme that offers travellers candid, fellow-traveller advice and insider knowledge from local Hyatt concierges, and has partnerships with sources like Frommers.com and FlightStats.com.

Verma believes

Speaking of nascent trends in the country, he says, "Some other hospitality related concepts that are at their infancy stage in India and will grow and in the years to follow, we will have serviced apartments, fractional ownership, timeshare and branded residences. Looking ahead, the industry will be broad-based, and he believes that international hotel chains will launch their complete bouquet of brands in this market. Hyatt, on its own part, plans to introduce its eco-conscious luxury brand, Andaz and has identified 60 cities in India which have the potential for Hyatt Place - its select service upscale brand. He says, "There will be growth beyond the larger markets, in tier I and tier II cities. The mixed use development model will gain prominence as compared to the stand-alone hotel development." Another trend he points out is the growing convergence of a luxury customer's business and leisure needs - combining high quality recreation and relaxation options in business hotels.

In conclusion, he says, "India is a key focus market across all brands in Hyatt's development vision and when this leads to fruition, it will certainly assuage the current shortage of hotel rooms in the luxury, full service upscale and select service upscale segments." n