Hotels

Ushering Swiss hospitality into India

Jean Gabriel Pérès President & CEO Movenpick Hotels & Resorts

Poised to enter the Indian market by 2008 with a business hotel in Bangalore, Mövenpick Hotels & Resorts' strategy will focus equally on business hotels in key cities and resorts in tourist destinations, says Jean Gabriel Pérès, president and CEO.

"There is huge potential for growth in the tourism sector in India and Mövenpick Hotels & Resorts intends to be well positioned to service this growth," believes Jean Gabriel Pérès, the company's president and CEO.

Though the international Swiss premium hotel chain traditionally had a geographic focus on the European metropolitan centres, the Middle East and Africa, it has over the past year laid the grounds of expansion into India, and from India to Asia Pacific. "The Indian market is of great importance and is predicted to grow in the coming few years, aided by a strong economy and a focussed government to make that happen," he opines.

The game plan

Mövenpick Hotels & Resorts is poised to introduce its five-star business hotel in Bangalore. It has signed a management contract with the owning company MS Ramaiah Hotels, a member of the MS Ramaiah Group. The new 220-room hotel will have conference facilities, a spa, leisure centre and a swimming pool. "India is renowned for its traditional palaces and luxury hotels that command a rate of some US $300 per night. But the country is a definite market for high class hotels that are 30 per cent less expensive both in room rate and the development cost per room," Pérès avers, citing the potential he foresees in India.

While he feels that hotels just below luxury have great potential, the increased trend towards management contracts is here to stay. "Our strategy in India will equally focus on managing business hotels in key cities as well as resort operations in tourist destinations. Our strength in this respect lies in our brand recognition and extensive sales network in Central Europe such as Germany and Switzerland which are key outbound markets to India and can be further developed," he adds.

Technology will play an integral role in Mövenpick Hotels & Resorts' growth plans with the group making considerable investments in e-commerce over the last three years. "The future will definitely include dynamic packaging that will eventually allow end-users to create their own package with airfare, ground arrangements and hotel accommodation all at once," Pérès says, pointing out that international hotel chains have realised, albeit somewhat late, the benefits of dealing directly with the end consumer via the Internet.

On the horizon

With their India strategy clearly etched out on the basis of two key factors - the Swiss connection and the reputation of Mövenpick Hotels & Resorts as a leading Swiss hospitality brand - Pérès is of the opinion that this will give the chain an opportunity to grow fast. "Our plans are to develop and manage a network of five to ten hotels in major Indian cities within the next two to three years, each property having between 150 to 250 rooms," he says. Apart from Bangalore, the chain is also looking at Delhi, Mumbai, Chennai, Goa, Pune, Kolkata, Hyderabad and Jaipur.

The company has access to sizeable funds ready to fuel its development, with the majority of the company held by the Mövenpick Holding (66.7 per cent) and the remaining with investment group Kingdom. "As a management company Mövenpick Hotels & Resorts does not invest in projects especially in the Middle East, the Indian Subcontinent and Asia Pacific. However, we often assist potential project owners on investment opportunities,” he adds.

He believes that growth in the hospitality segment lies both in metro and second-tier cities, and does not rule out mixed used developments in the future. "In our opinion, they do not compete but complement the pure hotel supply," he states. Currently, the group is managing several complexes - a mix of upscale hotels and service apartments in Doha, Dubai, Mecca.

Pérès believes…

Globally, Pérès believes, the Middle East and in particular the GCC countries will show dynamic growth. Select areas of Africa also hold considerable potential as do certain destinations in established Europe. But finally the focal point is where the market fundamentals are sound and India seems to meet this criterion well.

However, Pérès feels that the Indian hospitality and tourism sector is underdeveloped today, except in the luxury segment. "The issue is about perception; lack of proper airport infrastructure and intra-regional connections tend to create a negative perception of India while it is a country with great potential," he says cautioning that if not checked, could be detrimental to the great Indian hospitality boom. On a more positive note, he believes that the recent India initiatives show that many of these hurdles will be tackled over the next five years. "There is an increase in government participation towards hospitality and tourism," he concludes.