Accor is one of the few international chains operating in India that has an ownership as well as operating model. The chain also looks at all segments of the market –- from upscale to economy. Accor, which is growing at a steady pace, has completed nearly ten years in the country and plans to target 50 hotels by 2015. BW|Businessworld's Chitra Narayanan chats with Michael Issenberg, chairman and COO, Asia Pacific, to get an update on Accor’s strategy in India. What’s your pipeline of development in India?We have 20 operating hotels today in India. By 2015 we should have another 30 hotels operating - so we are looking at about 50 hotels by 2015. And then on top of that about another 20 of them that are in the plans. Are you investing in these?We have committed about $200 million to India, that includes some hotels already open and some of those hotels will be opened by 2015. So what is the percentage of owned versus managed in this?About 60 per cent are owned. There appears to be a race for 100 hotels in India between the global hospitality companies. Are you also in the race? Well, I said 30 more open by 2015 – those are all under construction. Once you get beyond that.. let’s get to 2015 and worry about that later. Is this volume game the right way to go forward?Supply has ramped up. Obviously the next couple of years will be challenging. How real everyone’s pipeline is I don’t know. I am not denigrating it. But surely there will be a fair amount of hotels opening up. No matter what there will be a lot of new hotels opening in India in the next three years and it will be challenging operating them. There are a lot of brands in your portfolio, from Pullman, Sofitel to Novotel and Ibis. Which one has got most traction in India?Two that are really clicking and have got most traction are Novotel and Ibis. That’s mid market and economy? What about luxury? Does this mean you are betting more on midmarket? Everyone’s strategy slightly varies... we do have some luxury openings coming up. We have Pullman opening in Aerocity and one in Chandigarh. So, we are not ignoring any segment of market. But we do see the larger opportunity in mid-scale market. What are the challenges of midscale market? There is a perception that Indian operators would score better in this as global operators tend to focus on global travellers.That’s not true. For us the biggest market is always Indian. We compete with Australian companies in Australia, we compete with French companies in France. I don’t spend that that much time worrying about what our Indian competitors are doing, but focus on our products doing well. For instance, how you train them, how you get people to stay in our hotels, look after guests. It’s all about execution. Another perception is that global chains have a cookie cutter -- a one-size-fits-all -- model. Asian brands have a more flexible and customised model? How do you react to that?I would say go look at our hotels – if they are cookie cutter tell me. If you look at our hotels in India, they have a design and plan. Look at some of our hotels in Bangalore, they are very highly designed. They are of the same family of what we do in other parts of Asia, but they don’t look the same. They are very well accepted. How do you customise for the Indian market?The food offering is more in India - for instance our Ibis hotel offers much more than in other parts of the world. In India, we have slightly more services because Indians are used to services. The design is not dramatically different but it is a little bit different. We use more stone in India -– we do a number of minor tweaks that add up to a lot.Read: Interview with Starwood’s Frits van Paaschen Have owners approach to hoteliering changed? Do you see them becoming more focused on returns?Our job is to help them. There is an oversupply and a lot of operators. Our job is to make sure that we do better than competition. Do you see a change in profile of the hoteliers? How do you deal with owner versus operator issues?Five or six years ago a lot of major real estate players were going to roll out dozens and hundreds of hotels. But now that has changed somewhat. Though ironically, it has not changed all that much – it is not more about individuals. But owner operator issues is not different in India than anywhere else. There are a number of reasons why hotels change hands between operators. It might not happen because of finances, or because of something else. India has its own peculiarity but it is not that different from the rest of the world. In the end it boils down to how you develop hotels, how you operate hotels, how you market hotels, which is the same everywhere. Operating here vs China? How do you compare the two?In China, our scale of operations is much higher. We already have 135 hotels and in the pipeline there are another 90. But ironically here in India, there is a history of hospitality. Your ability to attract staff and train staff is high here.Read: The Great Hotel SwayamvaraAre there any brands that are developed specifically for specific countries?There is a brand called F1 only in France. There’a a brand that we have specially tailored for China. It’s called the Mei Jue. We have not created the brand, but tailored our Grand Mercure brand and re-engineered it for Chna. We launched it about 14 months ago and gone very well. Would you look at tailoring a brand for india? We will. chitra(dot)narayanan(at)abp(dot)inchitra (dot) narayanan@gmail.com(at)ndcnn
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On a day the world's largest e-tailer Amazon Inc. launched its India store amazon.in, you would expect India's biggest e-tailers to be on an overdrive to counter the latest threat to their business. However, buyers on India's biggest e-tailer flipkart.com found the company has "discontinued" the entire category of consumer electronics (TVs, audio systems) and white goods (air conditioners, refrigerators, washing machines) Not too long ago, the virtual seller had listed over 200 odd televisions and refrigerators, around 150 washing machines and 700 plus home appliances from all major brands, including LG, Whirlpool, Panasonic and Kenstar. While the first three categories are amiss on the website, home appliances category has been skimmed down to 300 SKUs of small items such as hand blenders, electric iron, etc. Read Also: Amazon Now In India In a nutshell, the company has withdrawn all bulky items from its website, including large furniture. “We were not able to handle shipment of these heavy items and a lot of products were returned due to breakage while transporting,” said a Flipkart customer care executive told BW | Businessworld. According to him, the company stopped selling heavy electronics and big devices in the first week of May. The executive hadn't been informed when--if at all--the categories will be relaunched. Given that Flipkart manages packaging and shipment on its own, it is surprising the company is struggling with quality of shipping and delivery. Flipkart officials did not respond to BW Businessworld's queries on the withdrawn categories. On the contrary, Gurgaon-based logistics firm Delhivery ships around 500+ consumer durables a month, including TVs, microwaves, etc. for variety of e-tailers (barring Flipkart), with as few as 5-6 returns/damages. “A lot of companies do not focus on the right packaging, do not have trained staff or a network capable of delivering such items. Hence, the damages increase and the return rates go up dramatically,” says Sahil Barua Chief Executive of Delhivery. Read BW | Businessworld cover story: E-tailing WarsFlipkart's surprising withdrawal of a major category at a time when competition is intensifying is set to raise questions about the reasons behind the withdrawal of the category. Is it just shipping problems or is their more to it? Electronics, with it low margins, has been a very difficult category for any e-tailer to operate in. Companies focused on this category (specially on the warehousing model) have always struggled; be it late Letsbuy (which was bought over by Flipkart) or buytheprice.com (which got acquired by tradus.com).“It adds a significant cost to ship these items and if the margins are low you end up being in negative gross margins,” says Navneet Singh, CEO of Chhotu.in.
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Criminals who commit crime in one state and hide in another may soon have nowhere to go as the Ministry of Home Affairs has begun the process of connecting all of the country's police stations by digitising their records. Data ranging from FIRs, criminal records, investigation reports and results will be put up online to be accessed from any of the other police stations. The first phase ending 2014 will link up over 14,000 police stations and 6,000 higher police offices across the 35 states and union territories of India. The project was envisioned by the Home Ministry in 2012 to create a nation-wide network of IT infrastructure for technology enabled criminal tracking system.The process was put in place about a year back and has already been completed in states such as Orissa and Jharkhand, and is in the works in states like Kerala, Tamil Nadu, Uttaranchal, and Uttar Pradesh.The idea is to get all records in every police station in a given state to first be digitalised and then put these records online in a manner that allows records of one state police corp to be accessible to all other state police corps as well.“The challenge in implementation, however, is that a lot of these records are in vernacular languages like Tamil, Malay and Bengali, which will have to be translated and then digitised,” says Arvind Thakur, CEO, NIIT Technologies. NIIT Tech is working on digitisation of these records in over five states and says that the average size of a contract per state is to the tune of Rs 300 crore.In the process, say companies, that are bidding for the digitisation contracts, approximately, 3 million court records, lists of pending cases, FIRs among other documentation will go online. Besides NIIT, other IT players like Wipro and Tata Consultancy Services, are also in the process of bidding for these contracts.swati(dot)garg(at)abp(dot)inms(dot)garg(dot)swati(at)gmailTwitter: (at)swatigarg
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The Jet Airways page on the Bombay Stock Exchange website is awash with a series of announcements on share transfers. But no, the shares were not being transferred to the company’s new suitors Etihad Airways. Tailwinds, which held the promoter stake in the company, was transferring the company to its public face, Naresh Goyal. Tailwinds, as per Jet’s 2005 Prospectus is owned entirely by Goyal. The reason is tax, say advisors who worked on the deal.If the shares are sold off the exchange, the applicable rate is 20 per cent of profits, payable as Long-Term Capital Gains tax. So Tailwinds, which would have had to pay a 20 per cent tax if they transferred the shares directly to Etihad, instead sold it to Naresh Goyal at the current market price on the exchanges (availing zero tax benefit for sales where Securities Transaction Tax is paid), who in turn, will sell it to Etihad in a private transaction. Since the second leg of the transaction will be executed at around the market price, there won’t be the incidence of any further taxable profits.Veteran tax practitioner TP Ostwal points out that since the Securities Transaction Tax was introduced in India — giving a benefit of zero capital gains tax on shares that are traded on the stock exchange — many MNCs have looked at this route as a tax planning device. In an emailed response to BW|Businessworld, the company’s spokesperson said, "Since the transaction is being examined by the concerned regulatory authorities, and their consequent approvals are awaited, it would be inappropriate for us to respond."Such an arrangement can be at best termed as tax avoidance, not evasion, says a recent chairman of the CBDT, who didn’t want to be named. Here is a case, where a company is exploiting a loophole that is present in the law, he says, but as things stand, the Income Tax department cannot impose tax based on a hypothetical scenario of an alternate route permissible.Not everybody is enthused, however. Proxy warrior JN Gupta, founder of Shareholder Empowerment Services is one person who has cried foul. Gupta, a former Executive Director of Sebi feels that while Sebi can give approvals related only to its domain, when the matter under consideration negatively impacts another arm of the state, the board must take that department into confidence also. Noting that the purpose of this transaction is clearly to save tax, he asks, “Can an organ of the state facilitate a transaction which deprives another organ its rightful tax?”The questions sent to Sebi on the factors it considers before giving approvals in this regard were not replied to till the time of publishing. This was precisely the sort of transaction that the General Anti Avoidance Rules, now deferred to 2015, was intended to trap; Under GAAR, the taxman could challenge any transaction that was intended mainly to obtain a tax benefit. They might yet not give up without a fight. Uday Ved, senior tax partner at KPMG says that Minimum Alternate Tax could apply to a transaction that claims the STT benefit as it is called if the seller is a company, a view that has been upheld by the Authority for Advance Rulings. But others like TP Ostwal believe that the law does not provide for charging MAT on foreign companies. abraham(dot)mathews(at)abp(dot)inmatabrahamc(at)gmail(dot)com (at)ebbruz
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The Union Cabinet, on Tuesday, 4 June '2013, cleared the much-awaited Real Estate (Regulation and Development) Bill, which seeks to redress the shortcomings in the private residential housing sector by setting up a regulatory authority. It has invited tremendous opposition from the real estate industry. But, wait! The Bill can come into force only after it is passed by Parliament — a herculean task in itself, given the current clauses in the Bill. Meanwhile, here's a Primer on the Bill: It applies only to residential projects over 4,000 sq meters in size.Developers are prohibited from advertising or taking advance payments from buyers until the project is registered with the Real Estate Authority (each state will have one). For ongoing projects, developers are expected to register with the Authority within six months.After registration, the developer is given a login id and password giving access to the authority website where the details of the proposed project are to be listed. This website will be accessible to buyers.Flats can only be sold on a standard "Carpet Area" doing away with definitions such as "Super Area", "Built Up Area", "Plinth Area" and others that confused the buyer.In case a particular developer is dealing with a large project with different phases, each phase will be considered as a standalone project and registration will be required for each separately.The buyer will be compensated on their advance payment with interest in case of incorrect or false claims and delays in meeting deadlines. A penalty may also be charged, determined by the Authority.The buyer will also be penalised in case of delays, and charged interest on delays in payment.In the case of the cancellation of allotment, a refund is to be provided with interest. All compensation and refund amounts will be determined by the Authority.The developer will be held responsible for any defect or deficiency in the building construction for up to one year after handing over, which is to be rectified free of charge and within a specified time. In case the promoter fails to do so, he will have to pay the damages determined by the Authority.At least 70 per cent of funds of each real estate project are mandated to be deposited into a separate bank account which will prevent the developer from transferring funds from one project to another (one of the biggest reasons behind delayed projects).In case of violation of the Bill, the developers are liable to imprisonment for up to 3 years, or penalty of up to 10 per cent of the cost of the project. The promoters who fail to comply with the prescribed directions by the Authority are liable to a penalty of one lakh rupees for every day during which such default continues, which may extend to five percent of the estimated cost of the project. A Real Estate Appellate Tribunal will be set up to adjudicate disputes and grievances between a developer and a buyer, between a developer and Authority and between the Government and the Authority.
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We are living in interesting times: First came the printing press and plied us with information with newspapers and magazines. Then through TV and the telephone, we could access information in real-time. Today, the internet allows us to have all that information at our fingertips; and providing instant access to the web from anywhere are mobile applications on smartphones. Mobile applications have become one of the primary ways with which people communicate, shop, organise their lives, play or even work. A study by MTV Network and Latitude has revealed that apps change us in these three fundamental ways; by creating personal moments, improving everyday routines, and allowing users to discover new skills and experiences. Apps allow intense personalization and hyper-focus, filling our idle moments with on-demand “me” time. They enhance our day-to-day experiences directly by enabling productivity and achievement of our personal goals – and, indirectly, through the resulting creation of free time, improved mental well-being, opportunities for positive discovery, and more. And finally, apps open us to newer worlds.While the genesis of mobile apps can be traced back to around 2005, what necessitated their creation was the idea of a smartphone. Applications are just getting bigger and better by the day. Several verticals like public welfare, healthcare, infrastructure, education etc. are beginning to deploy applications to help increase the efficiency of the employees.The demand and deployment of mobile applications has risen to such an extent over the past two years, that today, even the medium and small sized enterprises in India are also using mobile applications to complete tasks faster, thus gaining higher mobility. Of the three major app providers globally, Blackberry has the largest revenue per app at $9166.67 compared to Apple App Store or Google Play, thanks to the BlackBerry World service that went live on April 1, 2009. Apple revenue per app stands at $6,480.00 and Google Play at $1,200.00. The popularity of mobile apps can only be gauged by the number of downloads. Till July 2012, BlackBerry World had recorded 3 billion downloads and that number is only expected to grow. The download figures for popular Apps like Instagram and DrawSomething has reached 50 million. Angry Birds exceeded 1 billion downloads globally.The popularity of mobile apps is also account of sustained addiction. According to the findings in the MTV June 2011 survey, “Love ‘Em or Leave ‘Em: Adoption, Abandonment and the App-Addled Consumer”, addiction to mobile apps is stronger than coffee or soda addiction amongst users, with millions essentially “addicted” to certain mobile applications. Sixty-nine per cent of men revealed that they would rather give up their favorite news source for a year than their favorite apps for that duration. Another 68 per cent said the same for coffee.There are apps in almost every category for every use – work, office, health, entertainment, banking, finance, infotainment, sports, food, games and many more. Sometime back, Gartner projected that mobile apps would generate revenues of $15.9 billion in 2012; and they also compiled a top-10 list of consumer mobile apps categories that it believes will do best and will bring in the money. The chosen categories include Location-based services, Social Networking, Mobile Search, Mobile Commerce, Mobile Payment, Context Aware Services, Object Recognition, Mobile Instant Messaging, Mobile e-mail and Mobile Video. Conspicuous by its absence from the list is Gaming, given that the top selling apps and top free apps are mostly all games.Also, with BYOD (Bring Your Own Device) gaining some steam, mobile applications for employees at the workplace cannot be ignored. With business executives continuously on the move, applications have become an integral part of their lives both from a professional and personal standpoint. Thus, the usage of mobile devices has been increasing to a great extent.Gartner, Inc. predicts that more than 50 per cent of mobile apps deployed by 2016 will be hybrid. To address the need for mobile applications, enterprises are looking to leverage applications across multiple platforms. The need for developing applications in multiple platforms due to diverse user base and increasing device cost due to BYOD, will drive the need of hybrid applications which offers to solve the current business problems. The advantages of the hybrid architecture, which combines the portability of HTML5 Web apps with a native container that facilitates access to native device features, will appeal to many enterprises.The mobile applications market has had strong growth over the past several years, as a result of the addition of new products, players, and business models. And according to a study by In-Stat, the overall Mobile App downloads are expected to approach 48 billion in 2015. This growth will continue, driven mainly by increased smartphone penetration, as well as growth in consumer mobile application libraries. (Annie Mathew is Director, Alliances and Business Development, BlackBerry, India)
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Head of international marketing at workforce management firm Kronos, Chris Marjara (47) says Indian companies should stop looking at people as just a cost and take it as competitive advantage. He talks to BW Online's Sanjitha Rao Chaini in Mumbai.What brings you to India?It’s a customer visit. We regularly visit our customers to keep our pulse on what's changing in these companies, how is the market involving and whether are we meeting our commercial objectives. And what do we need to do to invest in more business going forward. We are renewing and expanding contracts with existing customers now.You’re just back from Shanghai. Tell us about your China experience.It is a big market for us. We have about 100 customers there. Like in India, in China we target manufacturing, services and retail. A little more in manufacturing, as China is a manufacturing heartland. We get a lot more interest in our solutions as labour costs in China have been growing faster than in India, affecting its competitiveness for manufacturing.Many companies are now moving manufacturing from China to other South-east Asian countries. And India could take some of that. I see that both economies want to improve labour standards. The issue of productivity is present in both the emerging and mature markets. As living standards rise, both economies want the consumers to start spending money and boost growth.How important is India in your business?Latest statistics show productivity is reducing in India. That has huge implications on competitiveness of Indian firms. But we are seeing great interest in improving productivity in India. It can be a key competitive advantage for Indian companies if they could invest in their people and see that as the difference and be competitive. To be competitive, companies need to focus on productivity. And that means reducing labour costs, which isn't sustainable. I have heard a lot about how Indian companies are taking on lower cost manufacturing services coming out of, say, China. But as a competitive advantage, you cannot always be the lowest labour cost economy. You want to try and improve the living standards of your people. You have to try and increase investment and the consumption and production and grow the economy.We see a lot of labour cost is going up. So are the wages. It's happening dramatically in places such as China. Productivity is the key here. You can invest in machinery and plants and get automation -- but that's quite expensive -- to improve productivity. And not everyone can invest like that. So improve manpower efficiency. What India has in abundance is people. I am a firm believer that people can make the difference and give India its competitive advantage. So, companies need to stop looking at people as just a cost. They need to start looking at people as competitive advantage, how to make use of the skilled, abundant work force to their advantage, and use that to their fullest effect.We see India as a key growth market for work force management solutions given the size of its labour force. We see India and China very similar in terms of their maturity in using these solutions. We have been in India since 2007, and have seen our market share grow here gradually. We have 75 customers such as Bharat Forge, Dr. Reddy’s, PVR Cinemas, Genpact, and MNCs like Nokia. In the retail and services area, we have companies like such as Croma. We are seeing that a lot of Indian companies recognise they can offer a really differentiated products or services by focusing on their people and, in turn, differentiate themselves from the competition. The advantage of a work force management solution is you can make sure you have the right people at the right place at the right time with the right skills.So what are your plans for this market?Kronos has operations in 100 countries. We are nearly $1 billion in revenues and have nearly 20,000 customers. In India, we want to double the size of the business in two years, from the current $5 million. We are at the tipping point when it comes to adoption of our solutions because of the dynamics involved. We are focussing on some of the significant verticals in the industry - manufacturing, services and retail. These sectors can really take advantage of our solutions.Yes, we have to convince companies in these sectors of the tangible business value they get out of our solutions. And this is what more and more companies are recognising that they can save money by controlling the labour costs. This is what a manufacturer would do, be it Dr. Reddy's or Bharat Forge. They know exactly when people are arriving at work, what they do during the day, and they know when people aren't there too. So, now they have a far better control on payroll and labour costs. So for a manufacturer, if his staff is working on a production line, he needs to know just exactly how many were working on that particular line during the day. And how profitable were those production lines. Now we can track and analyse and report on labour costs on individual production lines.Obviously, this involves a huge technology intervention...We provide a complete solution including technology. And we help the companies implement the solutions. We have experts delivering best practices in delivering all of these applications. We provide technology in the form of biometric data terminals where people can scan their finger prints to let them know it's you who's coming into the production line and our software can help you allocate the people, schedule the production line and optimise it. Automated systems help reduce the time that it takes do it manually. Real time information also helps you make key decisions in terms of optimising where you put people.But won’t there be issues of privacy?From an employee's point of view, they add value to the system. Using the technology, employees gain self service - be it leave requests, looking up on their schedules, placing shift change requests, etc. This is just being compliant with the normal regulations that, perhaps, were not implemented in the manual system. It's productivity that's important. We don't get involved in hiring decisions. But our systems tell companies who are their top performers and then how can they codify that. And what are the personality traits you need to be looking for when hiring people. What these systems enable you to do is apply the information into your interview techniques, framing questionnaires and gives you data that says this is what a top performer looks like. The companies could look for top performers based on data from workforce management solutions coupled with talent management system. And we could help these companies in identifying the top performers and put them during the peak hours in their store - for instance, Saturday afternoons or other weekend hours -- to drive sales. However, this is private information and not shared with any other organisation. The company owns the data within the system. We could measure a team's process and skill sets, for instance, in a BPO, and the time they take to complete a project and apply that to hiring information.In this context, how do you look at the attrition rates in India?Skilled work force is hugely in demand. Even though India has a huge work force, the amount of skilled work force available is in short supply. Companies always want the best talent. There is always a war for talent and companies will pay more for that. And that means, if you are in that category, you will be in demand. Some people change jobs every couple of years and that increases their pay. That's a challenge in most companies, because they invest in training and development of their employees but then they see them walk out after a couple of years.But there is no easy way to fix that. What companies could do is make the work environment as enticing as possible for retention. Make sure employees are engaged and your company is innovative; and this is where talent management strategies play a role. Especially in the IT and services sectors. Here, people have been moving around a lot. And companies are now investing on strategies such as cafeteria, gyms, and so on to keep employees engaged and thus reduce attrition.The recent slowdown must have helped you considering companies want better productivity...The good thing about our solutions is we can help companies during their good times and also during their difficult times when they want to control costs or improve productivity. During slowdown, companies think of ways to remain competitive and we help them achieve that.
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Frits van Paasschen, President and CEO of Starwood Hotels & Resorts Worldwide, is a man who believes in the long race. An avid marathon runner, van Paaschen is leading Starwood’s push into emerging markets. Already the chain has nearly twice as many rooms as rivals Marriott or Hilton in emerging markets. He shares Starwood’s plans for India in an exclusive conversation with BW|Businessworld's Chitra Narayanan. What is the current outlook for a hospitality company? Where do you see growth? From a global perspective we believe we are at the cusp of a golden age in high-end travel. Not just in India, but around the world. A rising middle class, a growth in affluence and at the same time more global interconnectedness. We have young people with means who want to go places. But equally importantly, busineses that are based in mature, slow growth markets coming in search of growth to rapidly growing markets -– both these factors are driving demand for travel worldwide and certainly that is playing out in India as well. Who’s your target? Is it the global traveller or the Indian traveller? When it comes to global versus local brands, we find that our brands appeal to people across cultures, across backgrounds, and across age groups. In India, we see considerable growth in both global travellers as well as Indian customers. We are both a global and a multi-local company. And for us, when we look at markets around the world, almost without exception, there are more local travellers at our hotels than global. That percentage might be 60 or 70 per cent local. So, a considerable piece of our business is global as well. If we look at loyalty customers, which focuses on people who are mega travellers, people who travel 25-30 times a year. Today our occupancy around the world is driven half by loyalty customers. In other words, one in every two beds we fill every day is a Starwood Preferred Guest (SPG) loyalty programme member. And, that same percentage works in India too. We have more occupancy driven by local Indian SPG members than global SPG members. But it’s a combination of both. The other thing is that roughly 40 per cent of the spending by our Indian SPG members is outside India. That means growth opportunities for us in South East Asia, Middle East, and in Europe. All the kind of places where Indian travellers are visiting. Read: The Great Hotel Swayamvara You mentioned earlier that it is golden age for luxury travel, does that mean your focus is more on high end brands? Our skew is more towards high end. Four points by Sheraton and Aloft are Four star. We go up from there. So, we focus on the high-end market. We believe that there are big similarities among travellers from four star up to luxury. Lower than four star – you are looking at a different type of traveller. In India, we have eight of our nine brands present today. We see a balanced growth across our portfolio of brands – be it Four Points by Sheraton or across Sheraton, Westin, building on the heritage of Le Meridien. We are adding St Regis in Delhi. alongside the 10 Luxury collection we have in partnership with ITC. Are you also growing through the segmented micromarkets route? There is segmentation both by location and by brands. If you look at drive time across Mumbai, if you are business person with some work in one part of the city, you wouldn’t want to drive two hours to get there. There is no question that a city as large as Mumbai you would require many hotels across localities. Cities in India are developing by adding almost newly created cities – be it Whitefield (Bangalore) or Gurgaon or Noida (Delhi NCR). These are opportunities for us to grow. I wouldn’t even call them micromarkets but as large markets where having a presence is important. At the same time, we see segmentation by brands as well. We could have a W hotel and an Aloft side by side in the same marketplace, and they wouldn’t compete against each other as they would cater to different guests. They would both be luxury hotels but would complement rather than compete with each other. By having more than one hotel in a specific market, even a micromarket, we are better able to support and sell and promote those properties together. But with 8-9 brands in your portfolio, isn’t it a challenge to create such distinct brand segmentation? If you were to put three of our luxury hotels next to each other all in the luxury segment, one is W, whose design is funky and irreverent and if you were to contrast that with St Regis Hotel which is a modern interpretation of traditional luxury, and then compare them with a Luxury collection hotel which is focussed on the indigenous and being true to the market it stands with access to local culture, you can see how all those three brands do stand very distinct from each other. You can see how a Westin is very distinct from Le Meridien. You can have nine hotel brands in your portfolio and each of them with distinct personality. But you have to start with being focussed on delivering better global branded experiences not simply running or operating better hotels. Doesn’t too much segmentation create confusion? I do think there is a great deal of blurring on brands. From our perspective our brands do stand apart. It’s not your father’s four star property. It has the informality and ethos of a very different experience. If you look at W at Leicester square in London, which is a very saturated and brand penetrated market, that hotel has quickly risen and been noticed. I do believe there is a great deal of confusion among brands, but I do believe we stand distinct with our brands. How important is India to Starwood? The Indian market is for us our fourth largest country. We see it rapidly becoming the third largest after the US, China and overtaking Canada. We will have a hundred hotels open or in development soon in India. India is also important because it is decades away from being built out and saturation. If you look at the Emirates, where we have 21 hotels and 12 under construction, at some point by just virtue of size, it will become a very saturated market. But in the case of India, it is decades away. India is also important from an outbound market perspective. 50 million Indians will be travelling by 2020. As they use our brands in India, they use them globally. We have seen that happen for us with the Chinese market. We have seen a triple digit increase from Chinese travellers in 3-4 years. Do you see a shift towards more branded hotels in India? The Indian market has gone on a different trajectory last few year. Prior to that it was not a branded market. Everywhere else it takes time. In India it takes longer. There is more unmet demand for brands here than anywhere else. I see it as a glass half full. Chitra(dot)narayanan(at)abp(dot)in chitra (dot) narayanan@gmail.com (at)ndcnn
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