'Our Brands Carry Almost 27% Premium Over Our Competitors'

Bikramjit Ray Sep 18, 2015

’We started our journey back in 1999 with the opening of the Goa Marriott Resort, the first hotel we opened in India as a managed hotel,’ Menon began telling us, ’since then we have built a strong portfolio of 29 hotels under different brands that we operate across the country’. Marriott has more than 20 brands of which seven are present in India. ’We go from luxury, which is Ritz Carlton, JW Marriott; full service which is Marriott and Renaissance; upscale which is Courtyard by Marriott, which is Indian terms an entry level five star hotel. Then we have moderate priced tier which is Fairfield by Marriott and then extended stay which is Marriott Executive Apartments,’ Menon said.

With seven brands and 29 hotels, The company has a very strong development pipeline of another 47 hotels under construction spread out across the country, he added. ’When you look at it, our Courtyard brand today is growing the fastest. We have 12 open and another 18 under construction. Interestingly, JW Marriott is our second fastest growing brand, we have seven operating in India today and a few more under construction,’ according to Menon.

When the JW Juhu in Mumbai opened, it really did a fantastic job positioning the brand in the market. Since then, most JWs which open have become the market leaders in their field, he said. The Fairfield brand has also seen phenomenal growth with two opening by the end of the year and another 12 in the pipeline under construction. ’We see great opportunity for every brand that we operate in India for growth and our core focus has always been to position our brands as the best in class brands,’ Menon told us.

Speaking on the market forces at work in India at present, Menon said the last five or six years had been particularly challenging because of two factors. First, there was a slowdown of the economy which really hit infrastructure projects. That coupled with very high interest rates and short term loans created huge challenges for developers. Second, there was the added burden of considerable new supply of rooms from hotels opening up across the country.

’What happens when you go through this phase of dramatic slowdown in the economy with high interest rates? It puts considerable pressure on all businesses. As a result of the supply demand mismatch you started seeing RevPAR (revenue per available room) starting to come down. India as a country witnessed over five years of RevPAR decline year after year. ’At the end of last year, based on some of the reports we were seeing, there was a marginal tip over, so we tipped into black as an industry,’ he told us.

’As a company, when we compare to the industry and our competitors, we have consistently shown good RevPAR growth year on year. Which brings me to the point that our brands in India carry an almost 27 per cent premium over our competitors, across the board. This means we are able to drive better results for our owners,’ Menon added. Last year’s finish was strong according to Menon, with strong RevPAR growth, and almost double digit bottom-line growth. This year too looks good with the first two quarters (they work on calendar year) being particularly strong--well in double digits.

’When I came back to India in 2007. Marriott hotels on average, would do 67 to 70 per cent of business with international clients. As India started to see economic growth, we figured we had to focus on engaging with Indian companies and really building a strong base of Indian consumers. Today, I am proud to say across the country, our average is exactly the opposite, almost 70 per cent Indians and 30 per cent international,’ he said in conclusion.