Rajeev Menon, Marriott International’s president for the Asia Pacific region (excluding China), said that India has remained in a “pretty sound state” when it comes to the company’s hospitality business. Hotel operators have seen robust returns in the past couple of years, as people went on a revenge travel after being confined to their homes for more than two years since the covid-led lockdown of March 2020.
“This is a long term, stable kind of high that hotels are seeing. There is a lot of infrastructure investment coming which is creating an environment where you don’t necessarily have to rely on inbound travellers. Indian consumers have the confidence and the disposable income to continue to drive growth for hotels. The hospitality upcycle in India will last at least another five years. The number of millionaires in India is also growing. The real spenders are coming out of secondary and tertiary markets too, and they also want to travel,” Menon told Mint.
Marriott International’s hotels clocked a gross revenue of ₹10,000 crore in the previous calendar year, Menon said.
In 2024, revenue per available room, a metric hoteliers use to calculate how much money a room in a hotel makes, grew 12.5% for Asia Pacific (excluding China) for the company. This was the company’s strongest region of growth. India also had a double-digit growth and the same is to be expected this year as well from the country, he said. This year too, the company will look at double-digit revenue per available room growth.
“Today, India is the fifth largest in terms of room inventory across geographies for the company globally, but the way we are growing, in the next three to five years, India will be the third-largest market for us after the US and China. We expect to reach around 50,000 rooms across 250-300 hotels in the next 3-5 years,” he said.
In the calendar year 2024, the company signed about 42 new hotels in South Asia, including India, which will account for 7,000 new rooms and are in various stages of development.
At present, of the total 170 hotels in South Asia, it has 157 hotels in India, including some ITC Hotels’ luxury properties that it lists under its marketing and loyalty points portfolio, Bonvoy. It has about 30,000 rooms in the country. Some upcoming properties will be in Surat, Shimla, Jalandhar, and Coorg.
Next on the cards: 50,000 rooms
Its new projects are expected to come up in the next 3-5 years. In the hospitality industry parlance, “hotel signings” involve a brand or operator like Marriott agreeing to open or manage a hotel through a contract.
The focus is on building more upscale and luxury hotel rooms, with over 70% of these upcoming hotels in these categories. Menon expects the hotel mix by the time they reach the 50,000-room milestone to be an even split between luxury, upscale and select-service hotels.
“We are very bullish about our non-luxury brands in India as well like Fairfield, Courtyard and Moxy. Growth is coming out of all aspects. India is seeing some early shoots of hotel development growth in third to fifth-tier markets too. These markets will attract not just resort kinds of hotels but also city hotels,” he added.
Of its total 30 brands in its portfolio, the company operates about 17 brands in India. It expects to add another few brands in the country in the coming months. “There are 2.6 billion people in this ASEAN region and last year, 55% of our business here came from the region itself. So in a way, it is becoming self-reliant on itself and India is also a big part of this story,” he said. Consumer sentiment in and outside of China is still negative, he added.
According to hospitality consultancy Hotelivate, the Indian hospitality sector has experienced rapid growth and is gradually maturing. In the October-December quarter, the sector saw an 11.4% growth in average daily rate (ADR) and a 4.9% increase in occupancy compared to the previous year. This growth is reflected in a surge of hotel company IPOs on the stock exchanges over the past 15 months, with previously listed hotel stocks reaching record-high market capitalisations.
Listed companies make up around 35% of the branded supply in India, providing insights into the sector’s trends and performance. While Marriott remains unlisted, and works with some of its hotel owners that are listed like Chalet and SAMHI Hotels, as of August 2024, Hotelivate said Marriott International had over 24,000 rooms or inventory in India while its next biggest competitor, Tata Group-owned Indian Hotels Company Ltd had over 21,000 rooms.
