IHG Growth More in Mid Market Segments: Shantha De Silva

INTERCONTINENTAL HOTEL Group (IHG) plans to open a Holiday Inn Express in Bengaluru, by the end of this year. “If we look at India, we have doubled up our volume from the last three to four year,” said Shantha De Silva, Head of South West Asia, IHG to BW Hotelier.

According to De Silva, there is a bigger demand in the mid-scale sector because of the larger domestic traveller population. “If we look at our pipeline, 80 to 85 per cent of our work is for Holiday Inn and Holiday Inn Express because of the demand factor. Crown Plaza and other brand will grow but not in the same scale as Holiday Inn and Holiday Inn express. We see a lot more potential in mid-segment market,” he added.

India is the fourth most important market from the growth perspective for IHG. From the performance point of view, growth has been strong for IHG in India. “We see a strong environment for growth here. According to our first quarterly result released to stock exchange, in India the rebar growth was between 13 to 14 per cent which is a strong result for us,” De Silva told us.

In the previous year (Jan-Dec), IHG hotels earned revenues of USD 24.5 billion globally. “Hospitality industry has stabilised occupancy over the last three years and that gave us opportunity for us to drive even greater revenues across our hotels,” he further added.

De Silva is overseeing India, Bangladesh, Nepal and Sri Lanka. On asking about the gap he feels India needs to be bridged upon, he answered, “India can learn a lot in technology and productivity perspective because I think we are still very labour intensive. In Holiday Inn Express, we are starting with the system where we outsource some of the services, like housekeeping and engineering which will maximise our productivity. This will further bring better return on investment for the owners.

For IHG to grow fast in India, the biggest challenge is the time taken to develop a hotel from signing up to the opening. “It takes an average time between three to seven years which is too long. We need a lot more modern technology and ways of working to enhance the production,” says Silva.

“Another challenge every industry faces is the people challenge. It’s about attracting the right people to the industry, developing them and more importantly retaining them in the industry,” he added.

However, for De Silva what really strike him in India is the passion and the pride of the people. He said, “It’s amazing that people here take the pride in whatever they do and how they take their work forward. The talent, pride, and passion of people here is not easy to find elsewhere.”