Holiday Inn and Holiday Inn Express to drive growth in India: IHG

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IHG Hotels & Resorts, which has 41 hotels with 7,136 keys across five brands in India, is banking on the Holiday Inn and Holiday Inn Express brands to drive its growth in the country, a senior company official told FE.

While the Holiday Inn and Holiday Inn Express brands together represent more than 68% of IHG’s portfolio in India, South West Asia Managing Director Sudeep Jain said the two brands will remain the “engine of growth” while the economy works in their favor. “The outflow of capital to build these hotels is much lower than for large hotels,” Jain said.

IHG’s portfolio in India includes 15 Holiday Inn hotels with 2,818 rooms and 13 Holiday Inn Express hotels with 1,774 rooms. Additionally, there are 10 Crowne Plaza hotels with 2,332 rooms, two Intercontinental hotels with 164 rooms, and a Six Senses hotel with 48 rooms. While the Six Senses and InterContinental brands cater to the luxury segment, Crowne Plaza is in the upscale segment, and Holiday Inn and Holiday Inn Express fall under the essential segment.

Occupancy levels at IHG properties have exceeded pre-pandemic levels. The average occupancy rate of its hotels in the first half of CY22 was close to 67%, 26% and 2% higher than the same period of CY21 and CY19, respectively. The company expects the nationwide occupancy rate in the second half of this year to reach nearly 74%. In terms of RevPAR (revenue per available room), IHG saw a 140% increase in the first six months of CY22 compared to the corresponding period of CY21.

Industry-wide occupancy in hotels in CY2019 was 66.2%, while RevPAR stood at Rs 3,967, according to HVS Anarock. Due to Covid, industry-wide occupancy and RevPAR dropped to 33-36% and Rs 1,500-1,800 in CY2020, respectively. India’s hospitality sector ended CY2021 with nationwide occupancy of 42-45% and RevPAR of Rs 1,800-2,100 due to a strong recovery in domestic leisure travel and a partial recovery in business trips, as well as weddings and social events. .

Jain pointed out that while the business was down around 40-50% at the height of Covid, it was not universal. “Also in India, some of our hotels have been doing very well during the pandemic, the reason being the quarantine cases,” he said, adding that revenue and net profit for all hotels n were not affected at this level.

The business segment contributed nearly two-thirds of the company’s business before the pandemic, with the remaining third coming from the leisure segment. According to Jain, it’s more than rocked today.

IHG also plans to bring brands like Regent, Vignette and Kimpton to India. “These three brands are suitable for India and with the right partners in the right place, we will bring them here,” Jain said.

Regarding expansion plans in South West Asia (India, Bangladesh, Nepal and Sri Lanka), he said that nearly 46 properties are under development. IHG was signing about 12-14 deals each year before the pandemic. “I think we will be back with increased volume in CY22 and CY23.”

IHG currently employs nearly 5,000 people across its 44 hotels in Southwest Asia. “That number is between 15 and 20 percent lower than what it was before the pandemic,” Jain said.

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