India is full of opportunity for Starwood: Stephen Ho
Starwood Hotels & Resorts expects India to be its third-largest market globally for the hotel chain as it plans to expand locally with 100 hotels by 2016. Stephen Ho, President, Starwood Asia Pacific Hotels & Resorts, spoke to ET's Sobia Khan in Bengaluru.
When I look at India there is more opportunity to develop. One of the key initiatives that we have taken is to expand our footprint here. India is the second-fastest growing market and currently the fourth-largest country for Starwood. Globally, North America is the biggest market followed by China, Canada and India. By the end of this year, it will be the third-largest after China and the US, as we add more properties. There are more opportunities here than there are challenges. India is catching up and this year alone, we will open 36 hotels in Asia-Pacific, of which eight will be in India.
How do you compare your China business with India?
If you want to be successful you cannot ignore any one of them. China had early urbanization, but India still has a long runway if we look at potential and the population. India can easily be a 30-million tourist country. One of the key initiatives taken by the new government that will boost travel is visa on arrival. In Asia-Pacific, almost 50% of our hotels are in China with 130 already opened and 110 in development. In India, we have 49 operational hotels with another 40 or so under construction.
You seem to have missed your target of 100 hotels in India by 2015?
Right now, including our partners, we are close to 90 hotels and this year our target is to get there. If we miss it we want to get there by 2016. We are trying to sign up with 16 hotels and are hopeful of meeting our target. India is not an easy place to open hotel as the interest rate is very high with multiple approvals required to open hotels.Borrowing cost needs to come down along with streamlining of the approval process along with increasing tourism base. I still see India as under penetrated.
With a supply glut here, it must be hurting now?
The supply glut is there due to slow growth. But with the push in tourism and getting more business in it will get absorbed. Many cities where people were worried about supply glut the demand has picked up. Also, we should not under estimate the domestic demand. When we went to China we had no Chinese guest but today 75% of our guests are Chinese.Even Japan and Australia 80% of our guests are domestic travellers. India will also follow the same path as domestic travellers are growing both in leisure and business.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.