Hotels

Touch of the Orient

Symon Bridle COO Shangri-La Hotels & Resorts

Shangri-La Hotels & Resorts is poised to expand its presence in Indian metro and second-tier cities with its flagship brand Shangri-La Hotels & Resorts and its mid-market brand Traders. Symon Bridle, its COO, spells out his vision for India

The mythical connotations of the imaginary land Shangri-La in James Hilton's novel Lost Horizon is integral to what the hotel brand Shangri-La espouses in its lone property in India - a tranquil and magical haven. Its foray into India in 2004 with the Shangri-La Hotel, Delhi, in the ITDC-disinvested Kanishka with a management contract, marked the fastest entry into a country by a group.

With the Indian hospitality market set for a strong growth period, the chain perceives India as a fast maturing destination with immense potential for both its luxury and mid-range brand. Symon Bridle, COO, Shangri-La Hotels & Resorts, ascribes, "India is developing rapidly, particularly with the growth of the domestic market and the arrival of more international brands."

The game plan

Shangri-La Hotels & Resorts traditionally expanded through the ownership route, owning 37 out of 47 properties it operated. But it has taken the management route since the past few years. Taking a leaf from that philosophy, its expansion plans in India will not be any different. "Our initial approach is to expand in the market through management contracts with strong local partners, bringing in our brand strength, our hotel management experience and knowledge to the table and linking it with an owner's development sense in partnership," he explains.

Bridle does not rule out equity participation in the future but the franchisee route is, by far, ruled out in its corporate philosophy. "We want to ensure absolute brand integrity across our portfolio," he adds. Though the group had envisaged at least six hotels to be added to its Indian portfolio by this year end, the deadline has been pushed till a time it firms up on partners for these ventures.

He feels that there exists a confusion in the fundamental difference between management contracts and franchises vis-à-vis hotel owners. "This anomaly will be addressed by the entry of international brands into India," he says optimistically. With both the metro and non-metro cities offering huge potential, Bridle believes that international brands will first establish a foothold in key cities, particularly those bringing in five-star products, before targeting non-metro areas with mid-market and budget brands - a strategy the group believes in too.

The Oriental hotel chain is also actively pursuing an environmental interest with approximately 20 hotels certified as ISO14001 and independently audited by Lloyds Register annually for compliance.

On the horizon

Shangri-La's global expansion plans are hinged on a dual policy - to expand presence in key gateway cities of the world thereby cementing its global branding, coupled with rapid expansion both in India and China, a region from where over 50 per cent of the groups' revenues are expected to come in by 2010.

Its strategy for Shangri-La Hotel, Delhi, was to position it as a top-end property with a focus on optimising staff efficiency. "We are now looking to expand our full service luxury Shangri-La product in key metros without ignoring the smaller cities like Pune and Gurgaon for which we have our Traders brand, targeted at business travellers looking for affordable quality," he avers.

The group is looking at a dual hotel policy in the metro cities with both the brands complementing each other. "By 2007, the group's first Traders and its second Shangri-La in India will open in Bangalore, which will also witness the Shangri-La Resort & Spa by 2008. Meanwhile, a property in Mumbai is under negotiation. We operate both brands in international cities such as Singapore, Manila, Beijing and Dubai successfully and we will mirror that in Bangalore as well. We also see opportunities for our Traders brand both alongside the Shangri-La hotels as well as on a standalone basis in smaller cities like Pune. Our initial objective will be to create a network of 10 to 12 hotels over the next few years and then review our growth objectives," he states.

Bridle believes…

Shangri-La's outlook for India is positive and he views growth from all sectors - from the luxury to the mid-market segment. "Domestic, leisure and business demand linked with the expansion of low-cost airlines is being supported by international exposure, both on the business and leisure front. Fundamentally though, domestic demand is key to the continued growth," he opines.

Bridle also envisages an inflow of overseas funds in the segment. "But let's also recognise that the deals still have to make sense and costs need to allow the numbers to work," he cautions. The way to go in the future, he analyses, is the clear emergence of mixed-use developments, primarily in the lower tier segments, which will offer considerable opportunity to corner demand from this spectrum of the market.

He also foresees market expansion dovetailed with infrastructure development a key government-driven issue. "Infrastructure has to catch up to allow the market to fulfil its potential. I also see the tourism board's role as significant and with the Incredible India campaign, it is absolutely on the right track," he concludes.