India will become our third biggest market: Dilip Puri

Last Updated: Sun, Apr 06, 2014 05:38 hrs

India might be experiencing an economic slowdown but there is no dearth in the number of new hotel brands entering the market. US-based Starwood Hotels is one such hotel chain for which, India is a strategic market. Dilip Puri, managing director (India) and vice-president (South Asia), Starwood Asia Pacific Hotels and Resorts spoke to Swaraj Baggonkar. Excerpts:

What is Starwood's India inventory strength as of today?

Today, India is Starwood's fourth-largest market and would soon be the third. We have a strong and fast-growing footprint and a robust pipeline. We operate 38 hotels under six brands, with 35 hotels under development.

We aim to have 100 hotels under operation, through development and management contracts signed by the end of 2015, with eight out of nine Starwood brands flying their flag in India.

What is the expansion plan for India?

We opened four hotels in 2013 and would open another six-eight this year. Starwood continues to grow Westin in the gateway cities and key markets like Noida. It is now looking at strengthening its resort portfolio with a Westin in Khandala and in Bekal. The Le Meridien Mahabaleshwar would open in 2014. Le Meridien Jaipur, Kochi and Bangalore are at various stages of renovation. We also have a Le Meridien Hotel under development in Noida. We are growing Sheraton further into NCR and gateway markets, with Sheraton hotels under development in Chandigarh, Greater Noida and Whitefield (Bangalore). We have five Aloft Hotels operating in India and have three more under development - Aloft Bangalore Cessna Business Park would open this year and Aloft New Delhi Aerocity and Aloft Goa next year. We are seeing the Four Points by the Sheraton brand emerge as a developer's darling, with hotels under development in Faridabad, Gurgaon, Mumbai, Agra, Vadodara, Tirupathi, Dahej and Bangalore. Four Points by Sheraton Whitefield and Four Points by Sheraton Dehradun would open this year. We are also looking at bringing our luxury brands St Regis and W Hotels to India soon.

Is the company making investments for expansion?

Our corporate strategy is to own brands and manage hotels either through a franchise or a management model and not be real estate investors.

So, the investments we are making are not in real estate but in building our brands and loyalty, in people and training, in technology, in resources and in infrastructure that supports our growth, our business model and our distribution.

What are the plans for resorts?

Starwood seeks to expand its resort portfolio with the opening of Le Meridien Mahabaleshwar Resort & Spa later this year and would double its resort room count in India by the end of 2015. Starwood signed The WestinBekal Resort & Spa in the state of Kerala and already has The Westin Khandala Resort & Spa under development. The WRetreat & Spa Goa would open in 2015 and we also have a Sheraton Resort under development in Jalandhar in Punjab.

Which brand in India is growing the fastest?

We are seeing the Four Points by Sheraton brand emerge as a developer's darling, with six operating hotels and 13 under development, making it our strongest pipeline. We opened Four Points by Sheraton Ahmedabad and New Delhi last year.

We believe that in the upscale brands, fastest growth would come from the Four Points by Sheraton brand and Aloft brands and in the Upper Upscale brands, it would be Sheraton and Westin that would drive our growth.

Retention of talent is becoming an issue. What is Starwood doing for this?

The battle for market share in the future would be fought over talent. Given the planned growth that we have, over the next two years, we expect to add over 2,000 jobs to fuel this pipeline. We recently celebrated the Asia Pacific Starwood Careers Day, an Asia Pacific-wide effort aimed at attracting individuals to explore a range of employment opportunities at Starwood Hotels. It encapsulates Starwood's talent strategy that goes beyond talent attraction, to talent retention and development, building meaningful long-term careers for talent who join the organisation.

What is the global hotel pipeline and what percentage of it is coming to India?

We signed deals in Bangladesh, Nepal and Sri Lanka and this year, we already have deals signed in Bhutan. The South Asia region on a whole and India in particular, continue to be an emerging market for us.

How are you dealing with the slowdown?

We are cautiously confident about growth in India in the near term and remain as bullish as ever in the long term. India is still an under-hotelled market, and demand for high-calibre lodging is expected to far exceed current supply for at least three to four years.

As domestic travel increases and Indian travellers continue to demand more sophistication in terms of both quality and experience, we have significant opportunity to grow our brands across the spectrum in gateway cities, tertiary markets as well as in resort destinations.

Are your projects on schedule?

Last year, our momentum continued despite an uncertain global economy. In a world where sentiment can change quickly, we remain encouraged that positive long-term trends have not changed.

One of the biggest challenges we face in India is the slow pace of development due to regulatory procedures and infrastructure. We also believe there are a large number of smaller hotel chains and standalone hotels that offer quality lodging that could easily fit into one of our upscale brands.

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