Indian hospitality is going to go 10 times what it is today: Hilton APAC President Alan Watts

Hilton has significantly expanded its South Asia portfolio across luxury, full-service, and mid-market segments. Over the past two years, it has introduced and signed properties under brands such as Conrad Hotels & Resorts (Jaipur), Waldorf Astoria (Jaipur, New Delhi, Goa), LXR Hotels & Resorts (Bengaluru), and Signia by Hilton (Jaipur). At the same time, it has strengthened its mid-scale presence through Hampton by Hilton and Spark by Hilton.

This reflects a calibrated strategy across price points and demand segments. With 38 hotels currently in India, Hilton aims to grow its footprint to over 400 in the coming years.

In a free-wheeling conversation with Business Today, Alan Watts, President, Asia Pacific for Hilton, who oversees more than 2,200 hotels — both operational and in the pipeline — across 14 of the company’s globally recognised brands, spoke about the importance of the Indian market, Hilton’s positioning in the country and why the next decade belongs to it. Edited excerpts:

Hilton has called India one of its most important growth markets. What’s changed fundamentally in the last few years to elevate its priority?

Well, it’s interesting, if you look at the macroeconomics of India, you’ve seen these very short cycles of boom and then decline, boom and decline….

You multiply that with how long it takes to build in India, and it’s been a tiny market in the past. I mean, we think of it as a big market now. It’s still got less branded hotel rooms than Las Vegas, or New York City.

But, historically, we have a China first policy. Unlocking growth for Hilton in the China market has been hyper successful for us.

In 2011, we had five hotels. We’ve now got a thousand. We introduced the franchising model in China 11 years ago, and we’re introducing that in India now. The reason China was first is that you need some fundamentals to be in place in a longer cycle before you invest heavily.

I have always personally believed that India can become the third largest lodging market on the planet—the US number one, China at number two, and India at number three. And it has the potential to surpass the US and to rival China in just the volume of rooms.

But for that, a couple of things needed to change. First, it needed GDP stabilisation and rising consumer class. India is now a domestically driven market at a price point that would make sense for branded hotels. Secondly, it needed ongoing infrastructure renovation. We believe that what made the US the largest lodging market in the world was the superhighways that were built there.

Hotels are at the end of an infrastructure build out. They’re not at the start of it.  That was the story of China too. Roads and fast trains and then all the regional airports needed to happen before hotels could explode.

The reason it feels like Hilton’s come from nowhere is because it’s only now that we are shining our spotlight on India. And that’s because the fundamentals are in place. Today, we see that even post Covid, there has been consistent double-digit revenue per available room (REVPAR) growth year-on-year. The infrastructure is getting built, the per capita income has increased.

So, we have reasons to believe that it’s not a short cycle business. Demand is domestically driven, it is infrastructure supported and it has long-term economic growth fundamentals behind it. That means it is time for Indian hospitality to go through the explosion that the US went through in the ’50s and ’60s and China went through in the last two decades is now.

India is going to go 10 times the size that it is today, and we want to be a big part of that.

Hilton is now deploying the strategy that they’ve had on the shelf for a number of years because now’s the time to deploy it.

Okay, so is the next decade going to be India’s from Hilton's point of view?

Very much so. Not only from Hilton’s point of view, but from a travel and tourism point of view. And so, I would fully expect us to have the same success that we’ve had elsewhere. China’s a good parallel from just the size of the population. In 15 years, we have gone up from having single-digit hotels in China to a 1,000. I don’t see why that will not happen in India. I would say maybe it takes 25% longer in India than it does in China because the construction cycle and the change of land use takes longer here. So, we are aiming to have 400 Hilton hotels in India in the next few years.

Despite strong growth, India still has a significant gap in branded hotel rooms. How is Hilton positioning itself to capitalise on this under-penetration?

I think of the hospitality business as a pyramid. At the very top, there’s Waldorf Astoria and then at entry level, we have brands such as Spark and Hamilton by Hilton. To get volume at the bottom, we seek to franchise and give them access to the hospitality ladder. In the US, the largest single last name of Hampton by Hilton hotel owners is Patel.

There are more Patels that own Hamptons than any other family name in the world. And all of them started with just one and now it’s become the family business. Actually, another way to think about franchising is self-trade.

Not only is it an investment, it’s a career. I have the same vision for India that we had for the US—introducing people to the hospitality industry. I’m super proud of our ability to empower others with our service brands to become true hoteliers. And it’s that sort of expertise that will see us deploy that pyramid.

How many Hampton by Hilton hotel are we looking at in India?

We have just signed 125 with Royal Orchid in the latest strategic agreement and we did 75 with NILE Hospitality last year. So that’s a committed milestones of 200 Hamptons to get us started. I expect the first 10 to open in a couple of years and then that number will go up. 

And these would primarily be in tier II and III cities as well?

The great thing about the Hampton is that since it is a limited-service product, it can be in a metro or a tier II or III city. The way things are, today’s tier II cities will be the metros of tomorrow.

Again, if I do a China comparison, China is an 88% domestic market. Once you get out of the few cities that we all know of, it is purely domestic. And that’s the story of India too. We get very excited when we have 20-30 million inbound arrivals. But there were 700 million domestic trips last year.

So yes, we absolutely want to help the world discover India. But from a business point of view and why the Hampton and the Spark will be so successful is because of the domestic market, which dwarfs the inbound market.

Can you walk us through some of the most anticipated upcoming openings in India, including luxury and lifestyle properties?

India is entering a defining phase in its hospitality journey, and for us, it’s about building the intent across both ends of the market.

On the luxury front, the introduction of Waldorf Astoria will be a big step. By 2032, we expect to have three Waldorf Astoria properties in India, with New Delhi Aerocity likely to open first [followed by Goa and Jaipur].

At the same time, we are expanding our presence more broadly. This year, we are introducing three new brands in India — LXR Hotels & Resorts, Curio Collection by Hilton, and Spark by Hilton.  A little further out, we’ll also see Signia by Hilton come to Jaipur in 2028.