Simon Barlow, President, Asia Pacific, Carlson Rezidor Hotel Group, was in Delhi recently. Business Today's Vivan Mehra met him to discuss his company's India plans.
Q. Carlson has aggressive expansion plans in India. Are they still in place considering the fact that the country is experiencing a slowdown?
A. Yes, our plans are still in place. Carlson had a very good 2013. We signed 16 new hotels, a record for Carlson in India. It is also more than any of our competitors. We currently have 20 hotels in NCR (national capital region) across our various brands, with seven more in the pipeline. Many new hotels have opened in NCR, putting pressure on both hotel rates as well as profitability. Also, the general election this year is causing some delays in decision-making. Despite these factors, we saw good growth, which I'm very pleased about.
Q. Are you planning more expansion into Tier-II and Tier-III cities, given the rise in the number of travellers?
A. India is one of the big economies of Asia. It has a huge population, but a small number of inbound travellers. We have introduced a new brand in India in the last 18 months, called Park Inn by Radisson. It has been set up specifically for the Indian market. Last year, we signed a JV (joint venture) with Bestech Hospitality for 49 such hotels. We are gearing up for growth as the government increases its infrastructure spending on airports and roads, which will enable people to move more freely around the country.
Q. How will you do that?
A. We will provide hotels in places people want to travel to. We were the first hotel company to get into Punjab (Amritsar, Jalandhar and Ludhiana), Nagpur and Indore. We have a proven track record of opening hotels (in places) where no international hotel company has presence. We plan to continue to do that in the next few years.
Q.How do you position your various brands in India?
A. We have hotels across all categories. In the five-star category, we have Radisson Blu. In the four-star category, there is the Radisson. The Country Inn & Suites, and Park Inn cater to what we call the mid-market category. Finally, our brand Park Plaza, positioned between mid-market and four-star, is a very successful brand for us.
Q. Can you give us the break-up of how you plan to reach 100 hotels in India by 2015?
A. We have had considerable success with our Radisson Blu brand over the last three years. It is present in all major cities and in places like Delhi-NCR, there are multiple Radisson Blus. In our JV with Bestech, we decided that mid-market was where the future was. India is becoming richer, with better infrastructure coupled with a growing middle class. The Park Inn and Country Inn & Suites are the two brands where we see the maximum growth over the next few years.
Q. Can you give us the break-up of your hotel expansion in various categories?
A. We currently run 65 hotels, with 36 in the pipeline, making a total of 101 hotels by 2015. By the end of the decade, i.e. 2020, we plan to reach 150 to 170 operating hotels. Of the 100 hotels we will be adding over the next six to seven years, 75 per cent will be Country Inn & Suites or Park Inn.
Q. How is the Indian market different from other Asian markets?
A. The hotel industry is about relationships, whereas the Indian market is all about relationships. This is what sets Carlson apart from our competition. We have been in India for 15 years, longer than any other international hotel chain. We have a completely Indian management team, led by K.B. Kachru. Relationship is the key to doing business in India.
Q. Do you do any special things for the Indian traveller?
A. Park Inn is a prime example of what we have done differently for the Indian market. We have 150 of these hotels in Europe. We have introduced a new colour palette for India. We use a lot of saffron yellow and chilly red, which we feel makes a difference. Second, we've made our rooms bigger here, 24 square metres versus the 19 we have in our European hotels. This leaves room for a pull down bed, helping to cater to the family market. Then, there are lots of interconnecting rooms and about 70 per cent of the food available is local food.
Q. Finally, what are your other priority markets in Asia?
A. China, of course. We can't go past China. India and China make up what I call the bookends of the region, the two tiger economies. Outside of these two, we like and are very active in Indonesia and The Philippines. Both these are synonymous with India and China-large populations, growing domestic markets, with the governments spending large amounts on improving infrastructure, which is enabling people to move around the countries.