With 80 Hotels Running in 3-5 Years, and a Bullish Arnie Sorensen, Marriott Well on its Way to Becoming Largest Global Operator in India
MARRIOTT International will have 80 operating hotels in South Asia – 28 are already up and running and 52 are under construction – within the next three to five years, which will make it the largest international hotel operator in the country.
Led primarily by India, which will see 30 Courtyard by Marriott hotels in operation within the same time frame, the growth mirrors the optimism exuded by the hospitality behemoth’s global CEO, Arnie Sorensen, about the Indian market at the conference call that followed the declaration of the company’s Q1 2015 results.
Addressing top Wall Street analysts, Sorensen had said: “The election of Prime Minister Modi has ramped up optimism about the business climate and the economy in India. Lower interest rates are helping too. Many expect that the rate of economic growth in India in 2015 could exceed China’s. … The hotel owners and developers I spoke with are bullish about India.”
Sharing the South Asian perspective on the sidelines of the third annual round of Marriott Meetings Matter (M3) interactions with the country’s leading MICE players at the JW Marriott Mussorie, Ramesh Daryanani, Area Director of Sales & Marketing, South Asia, attributed the company’s positive outlook for India to our “extremely good partners” who have been “stable” and shared the global hotel operator’s “long-term vision”.
Marriott, he pointed out, has in turn offered “better returns to our partners”. Despite the “extremely difficult” recent years for the hospitality sector, hotels operated by Marriott International in India have clocked 70 per cent average occupancy, compared with the industry-wide average of 60 per cent, “which is why we have been able to charge a premium from our customers”.
Daryanani, who started his working life very early as the publisher and editor of a teen magazine named Juvenile while still a school student in Darjeeling, before moving on to study marketing and accountancy in Australia, is now headed to Hong Kong as Marriott International’s Vice President for Global Sales in the Asia-Pacific region.
Speaking about Marriott International’s growing footprint in India, Daryanani said, Mumbai alone will have 2,000 rooms flying the flag of one of the company’s six sub-brands operating in the country. Bangalore will have 11 hotels in the Marriott kitty because each suburb of the growing southern city has become a “self-sustaining” market offering a business opportunity to the international hotel operator. The chain’s luxury brand, Ritz Carlton, meanwhile, is all set for openings in Worli (Mumbai), Delhi and Pune, after a debut in Bangalore.
Marriott’s growth in India, Daryanani pointed out, is being powered also by secondary and tertiary cities such as Shillong and Raipur, which are seeing upgraded airports open up and a lot more disposable income in the hands of their residents. “Today, people in these cities want to have weddings only in five-star hotels,” he said, pointing to the market shift.
When Daryanani talked about 12 Fairfield Inn & Suites, Marriott’s line of business hotels, being in the pipeline, I asked him about the mismatch between the global positioning of Marriott’s more basic brands and how they develop in India. I gave him the example of the Courtyard by Marriott in Gurgaon, which has the look and standards of a five-star hotel – “an entry-level five-star hotel,” he corrected me. “For Indian customers, staying in a five-star hotel is still very aspirational,” he said in answer to my concern.
As we wound down, Daryanani said India now contributes 1 per cent of Marriott’s global earnings. “We’d like to see it grow to 5 per cent,” he added determinedly. “Within five years?” I asked. “That may be getting too ambitious,” he replied with a smile. Here’s an international brand that is not afraid to say it is betting big on India.