International hotel chains are set to launch new brands in the country anticipating increased foreign tourism and higher spending by Indian travellers on vacations, weddings, and corporate events in the country’s booming hospitality industry. As the Indian hospitality market experiences resurgence , several hotel companies such as Hilton, Marriott, Indian Hotels, ITC Hotels, Hyatt, Accor, IHG among many others bluechip names are introducing new brands to cater to the diverse demographics of the nation.

While international hotel brands historically had a limited presence in the country but are now becoming more aggressive in their approach. Spiritual tourism has turned out to be a very big opportunity for hotels in the country with places like Ayodhya, Ujjain, Varanasi, Bodh Gaya and Mathura are experiencing booming bookings . It is interesting to note that Indians are discovering their own country in terms of the diversity, spirituality, wellness and leisure . The travel and tourism industry is seeing robust growth on the back of expanding spiritual and wedding tourism and outbound travel fuelling hotel demand. Even online booking companies such as booking .com which has more than 70,000 registered properties on its platform are bullish on India .

Domestic travel has gained momentum due to easier booking process, competitive packages , easy credit , higher disposable income, large population with a rising middle class, an increasing desire to travel, access to language education and growth in technology. There is a void of adequate hotels in the lifestyle space in the country and hence global hospitality giants are looking at investing in India at the faster pace. The Radisson hotel Group is the second largest international operator with hotels under brands such as Radisson, Park Inn and suites is investing in the country with about 60 new properties under development. The company has been in India for the last 25 years and has set up a target of opening 30 new hotels properties every year for the next five years to capture the boom in the Indian travel and tourism sector . Other global hospitality giants like Hilton attribute their recent success story in the country on the back of bent up demand, consumer confidence and infrastructure development to be the major factors .

The hotel chain has seen exponential growth and assuming the current boom to be the new normal , expect a cycle of sustained growth over long term. The management of Bengaluru headquartered , Royal Orchid hotels have recently announced that they are launching a hotel brand with five star offerings at the Mumbai international airport . Apart from the five star brand, the company plans to launch a Smart Basic brand and a Boutique brand. At present , Royal Orchid hotels have brands such as Regenta Central and Regenta Inn with a current portfolio of 100 hotels with close to 6000 rooms. On the other hand , Hyatt has 48 hotels in the country and expect to open another 50 hotels over the next five years at locations such as Goa , Bengaluru and Bhopal . According to analysts tracking the hospitality sector , high net worth individuals and institutions have been major investors in the Indian hotel industry with investments of over $400 million in 2023 which is four times as against last year .The French multinational hospitality chain ACCOR has 62 hotels in India with 11,000 rooms and the management has expressed that this is not enough for a country like India . The Accor group expect to open 30 hotels with 5500 keys over the next 5 years . It has luxury brands like Fairmont , Sofitel and Raffles as its brand and is currently No 2 in the world , behind Marriott in the luxury lifestyle space.

While hotel and tourism related stocks have done very well on the bourses over the last two years , analysts tracking the sector are extremely bullish and expect the industry to grow by leaps and bound in the next 5 years . In the homegrown hospitality space , ITC Limited has the bluechip brand ITC Hotels in their fold which they will demerge and list it separately on the stock exchanges during the course of this year . Portfolio investors looking at solid fundamentals can bet on ITC Ltd and expect handsome returns when ITC Hotels gets listed on the bourses . ITC Ltd stock is currently quoting at Rs 427 and can be purchased by investors for decent long term gains .

By Rajiv Kapoor