New Decade, New Opportunities for India's Hotel Industry

AS WE enter the new decade, it is interesting to look back on how the hotel industry has changed in the last 10 years. In India, we have seen a considerable shift in terms of room supply; the late 2000s were “top heavy”, with a stronger luxury segment and limited supply in the lower tiers. The last 10 years have seen international hotel groups introduce more midscale and upscale products to the market, while many new Indian operators have entered the budget sector. The result is that supply is now much more balanced – and also more competitive. Fortunately, Radisson Hotel Group saw the potential of India before many of our competitors and has benefited by creating a first-mover advantage, developing strong relationships with local partners and generating significant brand recognition across all segments. 

In the past decade, we saw many ‘disruptors’ enter the market - shared accommodation providers, aggregators,  boutique hotels, experiential hospitality, and so forth - many have enjoyed success. These new entrants have achieved rapid growth in a short timeframe, and to an extent, perhaps may also be competitive with the traditional hotels segment. However, in my view, the disruptors have expanded the overall market by inducing additional demand, which is healthy for the industry. Traditional hotel chains, however, need to remain agile, anticipate and respond to any new market trends as they arise. Personally, I believe that the Indian hospitality market is deep and growing and there is ample opportunity for all players, at all levels, so long as the business fundamentals are well addressed. 

In the new decade, India will be a market driven by the diversity of its domesticity - the future of the Indian hospitality industry will thrive on this dynamic – Tier 2/3 (and perhaps even T4) cities is where significant opportunities will continue to emerge. The growth of India’s tourism and hospitality industry will continue to be fuelled by domestic demand.  The upcoming decade will also make us realize (yet) again that, we are, first and foremost, a service business – “the human element, now anchored in technology, will define success on the road ahead.”  Success in the decade ahead will also be decided by scale; hotel companies that harness their scale will create incredible value for all stakeholders alike – guests, investors, and operators throughout the ecosystem. While the hospitality landscape is constantly evolving, companies that ignore these basics and don’t adapt will likely be negatively impacted.

Saying that smart technologies are the future of the hotel industry is living in the past. It has been predicted that the number of smartphone users in India will double to 859 million by 2022*, so their impact will be felt in every business and industry. For hoteliers, this creates unprecedented opportunities to target customers directly and deliver personalised services. Guests will use apps to tailor every aspect of their stay, from checking-in online and using their smartphone as a room key, to pre-booking in-room amenities, making restaurant and spa reservations, arranging transfers, receiving customised offers, and more. Companies that achieve this effectively are likely to gain a customer; customer loyalty and retention will however, be ascertained by the quality of ensuing service provided by the lodging facility. 

The next five years will see us moving towards an increasingly seamless travel experience, whereby every element of the guest’s journey is integrated and enabled by technology. We need to harness new smart solutions to enhance the guest experience, remove friction points and deliver stays that are personalised to their needs and desires.  At Radisson Hotel Group, we have already started along this journey, with the roll-out of EMMA, our integrated technology platform that enables us to take advantage of opportunities such as harnessing big data, improving guest interaction and personalisation, and driving more direct business. This will play a vital role in our business moving towards 2025. RED by Radisson is a perfect example of how we are identifying and catering to new travel trends and the millennial mindedness of our guests. One of the most innovative concepts in the hotel industry today, it harnesses technology, smart design and intuitive service to deliver a new era of hospitality to guests. We are also introducing health and fitness programs, food & beverage (F&B) initiatives and more, to meet changing lifestyles. 

In the next decade, while we will continue seek and enter exciting new markets, at RHG we will continue to harness upon our scale as one of the largest hospitality companies in India having presence across 60+ cities with more than 150 operating and under development hotels. Under our India Unification Plan, we are aggressively synergising our operating platforms across the board to unlock significant economies of scale for our stakeholders. We believe this will re-energise our business and create strength in the long run.

As we continue to grow and expand, the availability of right talent is our top priority. We continue to evaluate and reward our General Managers through a merit-based ‘Centre of Excellence’ program and advance their careers through growth opportunities across our vast network. Skilled manpower has been an issue for India’s hotel sector. We have partnered with Indian hospitality institutes to provide training and employment opportunities for young professionals under our Management Associates program.

We also recognise the need for an environmentally conscious and responsible business. This is not just a means of attracting a new generation of guests; it is simply the right thing to do. 

As we look to the new decade, we are in a good position to target harness many new opportunities through our luxury, upper upscale and upscale brands Radisson Collection, Radisson Blu, Park Plaza, Radisson, and RED by Radisson and mid-scale offerings, Country Inn & Suites by Radisson and Park Inn by Radisson. Our pipeline and growth strategy is solid and we are truly excited about the journey ahead.