MINNEAPOLIS—Continuing on its carefully mapped out expansion initiative known as Ambition 2015, Carlson plans to open 19 new hotels in India this year. A move that will take its total count of hotels past the 50-property mark in the country, the company expects to have 100 hotels across India by 2015.
As the majority of the major U.S. hotel companies pursue additional growth in India, Carlson already has a bit of a leg up on the competition. With 34 hotels open, it is currently the largest hotel operator in India. According to Carlson president and CEO Hubert Joly, the company is building off that momentum to spur further growth. “India continues to be a priority market for us and there is huge potential there given the current hotel demand and lack of supply. There are .01 hotel rooms for every 1,000 people in India,” he said.
Presently, Radisson has the largest number of hotels in India among Carlson’s four brands with 15 properties open. There are 10 Country Inns & Suites, six Park Plazas and three Park Inns. “We have a strong concentration in northern India near New Delhi. Radisson, in particular, is performing extremely well there and is a very highly regarded brand. From a positioning standpoint, Radisson is extremely well positioned in the Indian market because there is a need for four- to five-star (by Indian standards) hotels that cater to business travelers and are very high end,” Joly explained.
Among the 19 hotels slated to open in India this year, 11 of them carry the Radisson brand. Ranging from 116 to 186 rooms, the properties are in locations including Chennai, Goa, Noida, Ahmedabad, Amritsar and Rudrapur. Joly noted that Carlson is using the success of Radisson and Radisson Blu in Europe as a springboard to develop the brand in India and elsewhere in Asia. “In Asia, Radisson is a very vibrant brand. It’s the fastest growing brand in its segment and there are more than 70 operating or in development right now in Asia,” he said.
Midscale momentum
The other hotels planned for 2011 include five Park Plaza hotels, a Park Inn and two Country Inns & Suites. “We are targeting major cities as well as secondary and tertiary cities for our midscale products,” Joly commented. “This year the new hotels continue to be located in the north but we are also expanding into the west to cities such as Mumbai and Puna as well as to the south.”
In addition to its focus on Radisson, Carlson is increasingly optimistic regarding the potential of its midscale hotel brands in India. “As the midscale market matures in India because the country’s middle class is growing there is a growing need for a hotel product to accommodate families and traveling salespeople,” said Joly, adding that cultural differences in the Indian market necessitates certain revisions to the Park Inn and Country Inns & Suites products.
“Service expectations in India are very different compared to the U.S. They are much higher. The ratio of staff to room might be three per room compared to, for example, a luxury hotel in Paris that might have 1.5 staff per room and cheaper labor in India allows for this,” he said. “Food and beverage is also a critical part of Indian culture. If you were in a Country Inn & Suites in the U.S., you don’t necessarily need a full-service restaurant because there are likely 10 nearby. But in India, that’s usually not the case. If you open a hotel and there’s no restaurant, it won’t work. And room service is critical, even in the midscale segment.”
From a design standpoint, varying degrees of adjustments are being implemented as well to best suit the Indian market. “Radisson is a brand that is highly stylized with a clear brand identity that is not cookie cutter. So it adapts very easily to different markets,” Joly said. “Park Inn is very international in nature with very fresh, bold colors. From an identification standpoint, it’s very European in style and we’ve had Indian developers visit Park Inns in Europe and say it is perfect for India. Amenities such as room service need to be incorporated, and the way it’s designed needs to be slightly altered to incorporate local details.”
Because of the distinctly ‘American’ styling of Country Inns & Suites, Joly noted the brand needs greater modification to smoothly transition into the Indian market. “Country Inns & Suites’ trademarks are being traditional and home-like. It’s quite American so the design is not as international. The concept of ‘home’ is universal but the translation of that concept needs to be nuanced correctly [for international markets]—not just the F&B, but the style and décor.”
While Joly is confident in Carlson’s ability to significantly expand its footprint in India in the coming years, he did point out the development challenges that still exist in the country. “If you were comparing infrastructures, China is clearly ahead of India. In India…the contracts are just extraordinary. The biggest challenge is the time it takes to get all of the licenses and permits and that means it takes longer to get a hotel built,” he said. “But our strategy is long-term. It’s not about impacting the next quarter. We’re taking this from the ground up and the wonderful thing about India is it’s a country that is very supportive of hospitality.”
Internally in order to support the company’s Ambition 2015, Carlson is increasing the strength of its international sales force and as it celebrates the one-year anniversary of its launch, Joly is both confident and optimistic for the future. “By increasing staff and making further investments in sales and marketing, we are better able to capture outbound travel to the U.S. The world is really changing and as we continue to tailor our products, we are very focused on leveraging growth from international markets because that’s where the action is,” he said.