Indian Hotels Company (IHCL) announced the signing of a fourth hotel in Varanasi, a 101-key Ginger hotel. It currently has two Taj Hotels and a SeleQtions hotel (as part of the Tree of Life conversion) in Varanasi, a city with deep cultural and religious significance.
Accor’s Sébastien Bazin Bets Big on India's Middle Class
15.04.2024 - 18:31 / skift.com / Sébastien Bazin / Bulbul Dhawan
“Ninety percent of the success of hotel companies is linked to two things – demography and emerging middle class,” Accor chairman and CEO Sébastien Bazin said at the recent hospitality conference, HICSA 2024. This is especially true for India, he said, which has accounted for 25% of the emerging middle class in the past 10 years.
Skift, in its Megatrend earlier this year, pointed to the surging Indian middle class as a driver for the industry. The middle class in India accounts for 31% of the population, and it is projected to reach 38% by 2031, and 60% by 2047. Plus, 65% of the population is under the age of 35.
“India has been taking the lead in terms of economy and is the fastest growing country in the world right now,” said Bazin.
Bazin believes that India is an untapped market, and wants to take the lead. “We are in a market which is untapped in terms of branded hotels,” he said, adding that there are less than 200,000 branded hotel rooms in India, as compared to 3 million unbranded keys for a population roughly the same as China.
Accor currently has 62 operational hotels in India, and nine properties in its pipeline are set to open this year. Last year, the French hotel company signed a record 11 hotels in India and opened six.
Highlighting the potential of the Indian market, he said that the top five hotel operators in India collectively have less than 1,000 hotels. In China, this figure is 25,000. “Accor alone in France has 2,000 hotels for 70 million people.”
“The question before all of us is how we could collectively go from 1,000 hotels to 15,000 hotels without having to wait 15 years for it. There is a demand and there is the emerging middle class that needs affordable accommodation and wants to discover the country,” he said.
Bazin stated that out of 1.4 billion Indians, 1 billion live in secondary and tertiary cities, and that is the potential market area. He added that hotels can be set up in these cities, but companies would need to search for five families in each city having the means to invest in that development and these families would differ in each city.
“But these families exist, that demand exists, those cities exist, and now, airlines also exist because they have hubs,” he asserted.
Talking about the requirements for achieving this growth, Bazin said hoteliers need to be agile, adaptable, patient, and trusting. “Anyone who says that they will double their portfolio in five years lacks ambition. India has the potential and need for 10 times that ambition,” he said.
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