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Optimism prevails
The scope for the budget segment is expected to get bigger
and better, feels Uttam Dave, president and CEO of InterGlobe Hotels
(Accor JV), who says that while there are a number of hurdles in the path of
development, the sector must remain optimistic to see them through. By Sanjeev
Bhar
Uttam Dave
President and CEO InterGlobe Hotels (Accor JV) |
Rising disposable incomes among the upwardly mobile is playing
a positive role in taking the budget hotel segment places, says Uttam Dave.
"This economic boom is making young working professionals our customers
for at least the next two generations," he stresses.
The general expectations have been fairly high from different
brands that are coming into India; the market expects this will change the disorganised
budget segment. International branding, thus, will definitely strengthen the
sector and give a much-needed new direction. Dave says, "The biggest positive
for us at Ibis India, as we call it, are the demographic trends of India coupled
with the economic growth of the country."
Dave believes that by the next decade, Indian hospitality
would have matured. "I think we would see over 5,00,000 hotel rooms from
every key hotel brand and a highly segmented market. InterGlobe Hotels would
have at least 50 hotels by the end of the next decade, if not more," he
adds.
The only dampener in all this, he thinks, is the lack of quality
human resource, especially in construction and project execution. "Nonetheless,
we should not let this happen in areas of operations and management," he
says. Other issues are common to all sectors. Rising costs for instance. The
US recession has halted the growth of other economies but only if it starts
to impact the Indian IT sector, then could it dampen the growth of the Indian
hotel sector, feels Dave. "The impact is likely to be more for the real
estate sector, with declining rentals and real estate values, all of which will
in fact benefit the hotel sector," he adds.
| InterGlobe Hotels is a technical and financial joint
venture with Accor Asia Pacific, established with a charter to develop a
series of 'Ibis' brand economy hotels across India and South Asia. Headquartered
in Gurgaon, InterGlobe Hotels plans to develop a minimum of 25 Ibis Hotels
over the next 12 years. It currently has 11 Ibis hotels under development
with over 2,000 rooms, apart from two Novotel hotels also under development.
The company is also looking at development activities for Ibis Hotels in
cities including Bengaluru, Mumbai, NCR, Chennai, Hyderabad and Jaipur.
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Focus India
In the present scenario, there are many international brands
coming into India and funds have been flowing continuously. InterGlobe is pinning
its hope on the economy segment. Dave says, "Our strategy is to grow the
Ibis brand of economy hotels in India. We believe that this brand will become
a favourite one for the Indian consumer in times to come." He emphasises
that the company will continue to invest in and own Ibis hotels in India to
ensure consistency in product and quality.
InterGlobe Hotels understands the importance of owning properties,
as many foreign brands are coming to India and doing the same. Dave reveals,
"We will do the same. Our current investment focus is in the metro cities,
where we plan to have multiple hotels. We will invest in tier II markets when
the timing is right." However, it will restrict itself to Ibis Hotels at
present.
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