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"Huge potential in Indian Tier-II towns"

Mark Hoplamazian, Global President and CEO, Hyatt Hotels Corporation, spoke to BT's Dhiman Chattopadhyay about why it took Hyatt nearly three decades to put its India plans on the fast track.

Dhiman Chattopadhyay | Print Edition: July 11, 2010

The gap between demand and supply in India has risen at an astounding pace over the past five years. Ten years ago, the demand in India was neither this high nor was there a need to set up so many hotels. We work primarily with third-party capital and till 2004-05 the message we got from potential partners was the same: demand was limited to the metros and growing slowly.

All that changed after 2005. The past three years, therefore, have seen Hyatt focus on development of the brand portfolio in India. So, it's not as if we woke up to the India growth story post recession. For hotels to start tomorrow, we had to start work four years ago.

Today, honestly, there are no full stops in India as far as growth potential is concerned. Over the next five years, we plan to open 30 more hotels here in both old and new markets. We are opening Hyatt Regency hotels in Pune, Ahmedabad and Vizag apart from ones in metros, and the Hyatt Place brand in Indore, Lucknow, Mundra, Mysore, Vadodara and Aurangabad, among others. The potential in tier-II towns is huge. We do not share country-specific numbers, but 25 per cent of our new projects worldwide are based in India. We invested close to $70 million in new properties around the world in 2009. That should give you a fair idea.

The biggest change in our business strategy during the slowdown was to tell all the general managers of our hotels around the world not to worry too much about top lines but focus on expanding market share. We reprioritised our goals. This was also a period when companies globally discouraged executives from booking into large hotels.

So, we had an internal communique to all hotels to ensure we gave each guest the best value for money experience. We did get hurt by the slowdown in corporate travel, but in some countries we gained significantly when firms booked into Hyatt Regency hotels in France or Italy instead of more expensive rivals. They realised that they got much the same standard for less.

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