Despite the many financial reports stating that global chains are planning to enter India, we thought that the said hotel chains would be slightly wary due to the lack of infrastructure and terrorism threats. But surprise! They are confident about the growth potential in Indian market and are actively seeking partners to enter this huge tourist cauldron called India
By: Soumya Jain
Posted on: November 10, 2010
Gone are the days of recession and the threat of terrorism. Hotels and resort chains are making big plans to enter India – the current business darling and the preferred destination of wide-eyed tourists.
But while India is certainly at the core of the world now, as proved by President Barack Obama’s visit to India, for which the whole Taj Mahal Palace & Tower in Mumbai has being booked, some said that the lack of infrastructure (like roads, airports, etc), might hamper the entrance of these hotel chains in India.
But when we asked Mandarin Oriental Hotel Group (MOHG) and Six Senses Resorts & Spas, both of which are actively trying to enter India, they dispelled any myths about India not being suitable for their properties.
India is considered to be a soft target for terrorists. The recent attack in Mumbai, which led to the near destruction of Taj Mahal Palace & Tower in Mumbai, hit the hospitality sector immensely in 2008. The inflow of tourists reduced drastically. But the cloud is lifting now. Andrew Hirst, Operations Director – Asia, MOHG, said, “The worldwide recession has impacted businesses everywhere, and it is a sad reflection of the times we live in, that the threat of terrorism is ever present throughout the world, not only in India. However, Mandarin Oriental has a long term view with regard to development and India remains a key destination for the Group. Before signing any project, the company conducts stringent due diligence, and globally all of our operating hotels remain vigilant to the threat of terrorism, with stringent safety protocols in place.”
MOHG had tried to enter India through a joint venture with Indian Hotels and Health Resorts (IHHR) in 2000. However, the partnership could not take off. But they haven’t given up just yet. Hirst says, “India is an important destination and we are actively pursuing opportunities in this region, although we have no announcements to make at the moment. Most of our development going forward is via management contract with little or no equity.”
Sonu Shivdasani, Managing Director, Six Senses Resorts & Spas, also says that having an Indian partner to start a resort here makes more business sense. “We would choose an Indian partner if we were looking to develop a resort in India, in order to better understand the area and to facilitate land acquisition, local development permits and bureaucratic support. Six Senses philosophy is to develop and operate luxury resorts, while being totally committed to the environment and to both protecting and supporting the natural world and the local communities. Having a local partner is also very helpful for supporting this philosophy.
Lack of infrastructure is not a problem, but finding a good location in India seems to be a major problem. Hirst said, “Our objective for each new hotel is to select the right project, in the right location, with the right sponsors in order to ensure each project is consistent with our luxury brand and reputation for excellence. This takes time.”
Shivdasani is more explicit on the matter, “India has some beautiful beaches but not that compare to the destinations where our resorts are so far. But we are looking at an area by the Andaman Sea, where the beaches are comparable. My mother has a tea plantation in the Nilgiris Hills, an area of great outstanding natural beauty, where there is a possibility that we might develop a Six Senses Sanctuary, our destination spa brand.”
As a testing ground, Shivdasani is opening the first Six Senses Spa in India at a Jaypee Greens development outside Delhi, which opens next spring. He said, “This is a very exciting development which will help introduce Six Senses to the Indian market. It will not just be treatments at the Spa but a raw cuisine restaurant too and we will offer both treatments and raw cuisine, outside the spa, to local residents.”
In a market dominated by the Taj and Oberoi Group, with only a handful of hotel and resort properties by global hospitality brands, there is a lot of scope of providing hospitality services in India. The number of tourists and business travellers to India is definitely going to increase as the Indian economy booms. Therefore, it is the apt time to give more variety to travellers.