Hyatt to tap into India’s golden age with luxury hospitality offerings: CEO

Hyatt Hotels Corp is setting its sights on India's bustling hospitality industry, with a keen eye on luxury offerings, to seize the opportunity presented by the "golden period" for hotel operators in the country.

In an interview with Mint, Mark Hoplamazian, the global president and chief executive, outlined the company's strategy, emphasizing the importance of catering to its core clientele: high-end guests. 

Aligned with its strategy, Hyatt plans to introduce Miraval Resorts and Spas to India, recognizing the demand for luxury brands in the region, he added.

“The brand will be perfect for India. We believe that deeper understanding is actually the unlock for a better, deeper relationship with customers. They may spend more time with us because we understand local markets more." 

"That's different from saying we're just going to be ubiquitous, and going to have hotels everywhere and in every category and price point—supermarket style. We believe specialty stores are far better than supermarkets,” Hoplamazian added.

India, which emerged as the company's fourth largest revenue-generating market, trails only the US, China and Japan. At present, Hyatt manages 48 properties across India, and plans to double this count within five years.

The company operates multiple brands in India, including the Hyatt Regency, JdV by Hyatt hotel in Goa, and the Hyatt Centric.

Moreover, as part of its "responsive strategy," the company is redefining its policy to incorporate smaller-inventory hotels for semi-urban markets, where demand for rooms could be as low as 80, or 100-120 rooms, indicating a departure from its earlier strategy to focus only on large-inventory city hotels. 

Currently, 25-30% of the company's global revenue comes from leisure hotels, with the category now accounting for over 55% of its portfolio, from 35-40% around six years ago. The company has also doubled its luxury room count and tripled the number of resorts during this period. Moreover, it has seen a fivefold increase in the number of lifestyle hotels catering to a younger, more millennial-friendly demographic. 

Considering India's predominantly youthful population, the company aims to attract more leisure travelers, anticipating its hotel portfolio to reflect this global trend, he added.

According to Hoplamazian, many Indians preferred international vacations in pre-pandemic times, but there has been a significant shift towards domestic travel. The inclination towards exploring destinations within the country is a significant driver of the market, he added.

“Over time, India will look more and more like our global markets when it comes to business mix. I have been a huge believer in India from the first day I stepped into this job 17 years ago. It just took longer than I expected for it to actually be seen by the rest of the world that India is a great opportunity.” 

“There are lot of positive things happening, and this is the beginning of a golden age of hospitality in India. There's so many things that India has going for it. The demographic trends are fantastic, the economy is broadening out, the level of travel inside the country is exploding,” Hoplamazian, said on the sidelines of the Hotel Investment Conference-South Asia. 

“As we've seen in many other markets around the world, the number of domestic travellers spending more money on leisure travel is going up. Here, in India, it is emerging as the principal driver.” 

Hoplamazian, however, warned about lingering challenges. Despite low inflation, the high cost of capital formation and bank borrowing for hotel infrastructure projects significantly contributes to delays in completion, especially compared to other part of the world, he said.

In March, one of Hyatt's Indian entities, the Arun Saraf family-owned Juniper Hotels, debuted on the stock markets. This family has direct ties to the original owners of the Hyatt family, the Pritzkers. 

Both the parent company, Hyatt Hotels, and Juniper received direct investments from the founding family in the US. When Hyatt Hotels Corp. became a publicly listed entity in the US in 2009, Juniper became a part of the group business.

“We are owners of our own hotels in India through Juniper, and have been for a long time. So, we have walked in their (owner's) shoes before, and know that the hotel business takes perseverance and time. That is paying off now.”

The company posted net income of $220 million in 2023, exceeding its full-year predictions. Globally, it operates around 330,000 rooms and has secured management or franchise contracts for about 127,000 rooms. It achieved net room growth of 5.9% in 2023.

The global hospitality industry has shown remarkable resilience, with revenue per available room (RevPAR) making a full recovery last year. According to a JLL report, by November, RevPAR across regions reached impressive levels, ranging from 94% to 121% of pre-pandemic figures. 

RevPar is calculated by dividing the total revenue of a hotel by the number of rooms in the property.

In 2023, Asia Pacific, especially India, witnessed positive trends. Fuelled by domestic leisure travel, meetings, incentives, conferences, and exhibitions (MICE) events, and the return of business travelers, it was a historic year for the hotel industry, with double-digit revenue growth.

Whether this momentum will continue into 2024 remains to be seen, but industry stakeholders are optimistic.