Radisson plans 13 new hotels in India
Undeterred by the announcement of a?separate state of Telangana?and concerns about what will happen next in Andhra Pradesh, the?Carlson Rezidor Hotel Groupintends to continue investing here.
The international group, which runs the Radisson brand of hotels among others, is looking at several new locations in the state. At a national level too it has ambitious plans.
“Over the next year, we will open more 13 hotels in India,” says K. B. Kachru, Chairman, South Asia, Carlson Rezidor Hotel Group.
The group, essentially a?management and franchise company, does not own any properties in India. It has 63 projects in the country today and an additional 44 under development.
“We are hoteliers and we will go wherever there is opportunity,” adds Kachru, maintaining his group was?unaffected by political developments?. “We are hoping to have at least three more hotels (in addition to the one in Hyderabad) in Andhra Pradesh by 2015.”
There are several locations the group is looking at in cities and towns such as Visakhapatnam, Vijayawada, Tirupati, Warangal and Karimnagar.
In Andhra Pradesh, the focus will be on mid-scale offerings. “What we have internally analysed and found is that Andhra Pradesh is a bigger market for mid-scale than upscale hotels,” says Kachru.
These are hotels with room rents of Rs 3,000 and Rs 4,000 per day. Will it be the same strategy in the rest of the country?
“It is a good strategy, except in the metro towns, because in the metros real estate is so expensive that building luxury hotels is the only alternative,” he says. “You cannot build a mid-scale hotel with land costs being 40 to 50 per cent of the total project cost. You will never make money.”
The added attraction of locations outside the big metros, especially in mini-metros, is the emergence of new business models such as the one where there is multi-use development of the property with part of the structure – say, the ground floor – being used for offices or as retail outlets, while the floors above are used as a hotel. “This will give a better return on investment,” he says.
The current slowdown with decreased business activity and the resultant dip in spending on events and promotions by companies and other corporate entities is having a snowball impact on the hospitality sector.
Kachru says hotel need to evolve new ways to attract customers. These could include focusing on domestic tourism, investing in technology, especially the online business to convert more clicks into bookings and promoting MICE (meetings, incentives, conferences and exhibitions).