By Bikramjit Ray
RAJ RANA, Chief Executive Officer, South Asia at Carlson Rezidor Hotel Group spoke to us about the company’s views on India and its prospects in the coming year.
We began our conversation with what makes Carlson Rezidor’with 71 hotels in operation in India, with another 45 under development (see chart below)’different from others?
The single biggest differentiator for Carlson Rezidor worldwide is relationships, began Rana, ’we are a privately held company not accountable to the stock market. Our decisions are based not on short-term quarterly results. We give a lot of weightage to long-term relationships. That is our strength in India as well’. He gave the example of the company not losing a single hotel during their renewal. ’Even in a marriage, you can imagine the stress and strain after ten of 15 years, and yet, our owners choose to renew with us. They also have multiple hotels with us and it is through them that we get leads and references for business opportunities,’ he added.
Rana continued by saying that the corporate structure was fairly flat and each and every owner had a relationship directly with the business head and of course the entire team. ’I think it is the most remarkable thing about Carlson Rezidor at large and particularly in India, where relationships that a different significance altogether,’ he said.
With seven brands worldwide’Quorvus, Radisson Blu, Radisson and Radisson Red, Park Plaza, Country Inns by Carlson and Park Inn by Radisson, the company has all of them except Quorvus in India. ’We introduced Radisson Red and Quorvus to India in April and I am pleased to say that for Radisson Red, we have some very good initial interest as well as some prospecting going on. -We have just had the ground breaking ceremony for our first Radisson Red in India in Mohali,’ he announced adding that Radisson Red is a brand which is well positioned to ensure that the bottom-line of the owners is enhanced while guest experience is more geared towards the millennial mind-set, which in India covers a large part of our population.
Quorvus by definition, is not a scale brand, he told us. It is a brand which lends itself to retaining its individual identity and yet provide luxury elements. ’We hope to find some conversions like palaces and forts for this brand. The brand profile is right at the top of the pile, which will broaden our reach to a certain segment of the market’, he said.
Speaking on the market situation in India right now, Rana began by saying that 2015-16 has been better than what the company had imagined. ’We were thinking that this excess supply is going to totally destroy the market economics. But the excess supply is being absorbed. The indication is that demand is still rising, albeit not at the same pace as occupancy. Due to this growing demand, occupancy has found legs,’ he said.
’In our portfolio and in the industry, occupancy has inched up. This includes cities like Delhi, with excess supply. In the business, once occupancy finds legs, rates will follow, so we feel that in the coming year, rates will start gaining some foothold as well,’ he further explained. This is very important because falling rates has caused owners and brands a lot of heartache because rates drive margins.
’As far as Carlson strategy is concerned, we are going into markets where there is no international operator. We have always believed that we have a first entrant advantage. So, for example when we go into a market like Indore, Nagpur or Guwahati, we immediately get into a fortress position because we build a quality hotel which raises the very standard in that market. We are able to reap the benefits of this strategy for years to come till competition arrives and the profile of the city goes up,’ Rana stated.
’We are finding that although supply side is heavy, there are plenty of markets where there is a critical shortage of branded rooms. We are actively looking for prospects in Ranchi, where we already have a hotel; in Patna and in tourist pilgrimage destinations like as Bodh Gaya, Tirupati, Madurai and Rameshwaram,’ he added.
A brand is nothing but a set of standards and the experience expected, Rana told us. Because a customer's opinion of a brand is based on the expectation of consistency, India is a bit of a challenge for most brands, he said, going on to explain why--’All hotels in Asia Pacific are at a higher level, no matter which international brand you are. It causes some operating burdens. Even a mid-scale hotel like Country Inns, ends up being a full service hotel because of customer demands and that puts a strain on the labour’, he explained.
With improved connectivity and infrastructure, the move to go into secondary and tertiary markets and aiming the brand towards the upwardly mobile classes in India was going to pay off for the group, Rana hinted.
The author is Executive Editor of BW Hotelier.
RAJ RANA, Chief Executive Officer, South Asia at Carlson Rezidor Hotel Group spoke to us about the company’s views on India and its prospects in the coming year.
We began our conversation with what makes Carlson Rezidor’with 71 hotels in operation in India, with another 45 under development (see chart below)’different from others?
The single biggest differentiator for Carlson Rezidor worldwide is relationships, began Rana, ’we are a privately held company not accountable to the stock market. Our decisions are based not on short-term quarterly results. We give a lot of weightage to long-term relationships. That is our strength in India as well’. He gave the example of the company not losing a single hotel during their renewal. ’Even in a marriage, you can imagine the stress and strain after ten of 15 years, and yet, our owners choose to renew with us. They also have multiple hotels with us and it is through them that we get leads and references for business opportunities,’ he added.
Rana continued by saying that the corporate structure was fairly flat and each and every owner had a relationship directly with the business head and of course the entire team. ’I think it is the most remarkable thing about Carlson Rezidor at large and particularly in India, where relationships that a different significance altogether,’ he said.
With seven brands worldwide’Quorvus, Radisson Blu, Radisson and Radisson Red, Park Plaza, Country Inns by Carlson and Park Inn by Radisson, the company has all of them except Quorvus in India. ’We introduced Radisson Red and Quorvus to India in April and I am pleased to say that for Radisson Red, we have some very good initial interest as well as some prospecting going on. -We have just had the ground breaking ceremony for our first Radisson Red in India in Mohali,’ he announced adding that Radisson Red is a brand which is well positioned to ensure that the bottom-line of the owners is enhanced while guest experience is more geared towards the millennial mind-set, which in India covers a large part of our population.
Quorvus by definition, is not a scale brand, he told us. It is a brand which lends itself to retaining its individual identity and yet provide luxury elements. ’We hope to find some conversions like palaces and forts for this brand. The brand profile is right at the top of the pile, which will broaden our reach to a certain segment of the market’, he said.
Speaking on the market situation in India right now, Rana began by saying that 2015-16 has been better than what the company had imagined. ’We were thinking that this excess supply is going to totally destroy the market economics. But the excess supply is being absorbed. The indication is that demand is still rising, albeit not at the same pace as occupancy. Due to this growing demand, occupancy has found legs,’ he said.
’In our portfolio and in the industry, occupancy has inched up. This includes cities like Delhi, with excess supply. In the business, once occupancy finds legs, rates will follow, so we feel that in the coming year, rates will start gaining some foothold as well,’ he further explained. This is very important because falling rates has caused owners and brands a lot of heartache because rates drive margins.
’As far as Carlson strategy is concerned, we are going into markets where there is no international operator. We have always believed that we have a first entrant advantage. So, for example when we go into a market like Indore, Nagpur or Guwahati, we immediately get into a fortress position because we build a quality hotel which raises the very standard in that market. We are able to reap the benefits of this strategy for years to come till competition arrives and the profile of the city goes up,’ Rana stated.
’We are finding that although supply side is heavy, there are plenty of markets where there is a critical shortage of branded rooms. We are actively looking for prospects in Ranchi, where we already have a hotel; in Patna and in tourist pilgrimage destinations like as Bodh Gaya, Tirupati, Madurai and Rameshwaram,’ he added.
A brand is nothing but a set of standards and the experience expected, Rana told us. Because a customer's opinion of a brand is based on the expectation of consistency, India is a bit of a challenge for most brands, he said, going on to explain why--’All hotels in Asia Pacific are at a higher level, no matter which international brand you are. It causes some operating burdens. Even a mid-scale hotel like Country Inns, ends up being a full service hotel because of customer demands and that puts a strain on the labour’, he explained.
With improved connectivity and infrastructure, the move to go into secondary and tertiary markets and aiming the brand towards the upwardly mobile classes in India was going to pay off for the group, Rana hinted.
The author is Executive Editor of BW Hotelier.
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