The Indian hospitality industry is on a roll. 2023 saw a record number of hotel signings and openings: 25,176 keys were signed and 12,647 keys were opened, taking the branded keys inventory to ~ 207,000, up from ~ 94,000 a decade ago, with a more equitable distribution across most segments, reports Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL. Hotel investments touched $401 million, nearly four-fold the volume witnessed in 2022. Last year also saw 22 hotel assets traded, the most in the previous decade, and three hotel companies successfully debuting on the stock market through their Initial Public Offerings. Also in 2023, the hospitality industry recorded a 30 per cent increase in revenue per available room (RevPAR), stimulated by a rise in corporate travel, wedding events, and the demand for meetings, incentives, conferences and exhibitions (MICE), says Dang. “This upward trajectory in growth persisted throughout the year, buoyed by international events and peak vacation periods.” An unparalleled growth story India’s hospitality expansion story is being scripted by groups like the Radisson, Accor, Marriott, Hyatt, etc. Further, Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE cites Curio Collection by Hilton, JdV by Hyatt (launched in Q1 2024) and Voco by IHG as examples of international chains with plans to launch new brands. “India remains one of our top global growth markets from a development point of view,” says Dhruva Rathore, Vice President, Development, India & Southwest Asia, Hyatt. “To align with the customer demand, we are opening new properties in some of the most sought-after existing and emerging destinations and introducing new brands from Hyatt’s global portfolio, such as the JdV by Hyatt brand in India, with the opening of Ronil Goa, and The Unbound Collection, a collection of truly distinctive properties, all with a different story to tell, in partnership with the Noor-Us-Sabah Palace, one of Bhopal’s oldest and most sought-after hotels.” “2023 was marked by unprecedented growth and success for the Accor Group in India, with the signing of eleven strategic hotels and the opening of six key properties, adding nearly 1,000 rooms to our Indian portfolio to bring the total number of hotels under our banner to an impressive 61,” says Aniruddh Kumar, Vice President of Development, India & South Asia for Accor. Notable Accor Group hotel signings in 2023 included the prestigious Fairmont Agra, Pullman Amritsar, Novotel Bengaluru Airport Varun, Grand Mercure Jaipur Kukas, and ibis Styles Bengaluru Airport Varun. According to Kumar, “each signing showcases our dedication to providing diverse and exceptional experiences tailored to the preferences of modern travellers.” Marriott International signed 28 deals in India adding close to 4500 rooms to the pipeline for the country. Tapping into evolving guest demands for high-quality service and immersive guest experiences, 77 percent of the rooms signed in 2023 were within the luxury and premium portfolio, compared to 48 per cent in 2022. Marriott International plans to debut the iconic Ritz-Carlton brand with The Ritz-Carlton, Amila Hills in Shimla, anticipated to open in May 2029. The JW Marriott, a brand rooted in holistic well-being, will expand its luxury footprint with the JW Marriott Surat Resort and Spa and the JW Marriott Sohna Resort and Spa in Delhi NCR. Marriott Hotels and Resorts, the company’s flagship brand, is expected to debut in Guwahati, Ludhiana, Ayodhya, Shimla and Amritsar. Westin Hotels & Resorts will augment the wellness portfolio with additions in Hyderabad and Coorg. Le Meridien Hotels & Resorts is expected to expand its footprint in North India with the Le Méridien Jalandhar. Some other openings include the Courtyard by Marriott in Gwalior and Guwahati Beltola, and the Fairfield by Marriott in Guwahati, Andheri and Jalandhar. Good tidings for 2024 Coming to 2024, “the year has started with strong tail winds as we saw prominent hotel deals valued at $78 million in the first quarter itself,” says Dang. “We expect last year’s growth story to continue on the back of diversified avenues of growth such as expanding commercial office markets, the development of new airports and expressways, and increasing pilgrimage travel leading to the emergence of new realty and tourism hotspots across the country.” “In 2024, we will build upon last year’s momentum and continue our strategic growth with the planned opening of nine new hotels across various segments, from the luxurious Raffles Jaipur to the value-driven Mercure Chandigarh and ibis Styles Mysuru,” says Kumar. For the Hyatt, 2024 will see eight new openings across legacy brands such as Hyatt Regency, Hyatt Place and Hyatt Centric, and 1200 new keys across leisure and city locations. The Hyatt Regency brand, a key growth driver for Hyatt in the region, will enter Kasauli and Ghaziabad, both new destinations. The Hyatt Place brand is expected to enter Aurangabad and Haridwar, again, both new destinations. The Hyatt Centric brand will expand its portfolio with openings in Hebbal Bengaluru and Ballygunge Kolkata. How brands chase deadlines With so much expansion, how do brands ensure they meet opening deadlines? “Rigorous planning, constant oversight and clear communication is essential to ensure property development progresses smoothly and meets opening deadlines,” says Rathore. “At Hyatt, we meticulously craft comprehensive project plans, closely track progress and foster open dialogue with all the stakeholders. Proactive troubleshooting is vital for swiftly resolving unforeseen issues. Upholding stringent quality control measures guarantees adherence to regulations and maintains Hyatt’s brand standards.” Kumar acknowledges the contribution of Accor Group’s esteemed partners such as JV Interglobe (21 hotels), JV Triguna (7 hotels), Varun Group (3 hotels) and the Brigade Group (3 hotels) in its success. “Our achievements wouldn’t have been possible without our partners with whom we have forged strong and enduring relationships,” he says. Opportunities from greenfield developments Key signings in greenfield projects numbered approximately 13,600 in 2023, up from 8,000 in 2022, according to JLL’s Hotel Investment Trends India 2023. Greenfield projects bode well for hospitality realty, with the opportunities spanning land acquisition, building design and construction. In fact, a quarter of the hotel investments in 2023 were for under-construction hotels in both business and leisure destinations, and a similar proportion was from real estate developers, followed by owner-operators at about one-tenth. With JLL reporting that 54 per cent of the keys signed in 2023 were in tier-2 cities, it’s clear that the opportunities for land parcels lie across tier-1 and tier-2 cities. Tier-1 cities typically have higher barriers to entry on account of high costs and the limited availability of land parcels. However, traditionally, large hotels comprising 250+ keys and ample banqueting space are concentrated in such key business cities due to strong social and corporate MICE demand, says Dang. On a positive note, the signings in 2023 show that substantial improvements in infrastructure and connectivity in recent years have notably expanded the scope for large format hotels beyond major metropolitan areas into prominent leisure destinations such as Jaipur and Goa, now evolving hubs for social and corporate events. In emerging markets, Dang notes that several established and upcoming mixed-use developments have looked to establish hotels in their precincts as they continue to grow on the back of new infrastructure developments and under-development airports. Coming to preferred locations within cities, Navneet Nagpal, Director & Principal Consultant, Spectra Hospitality Services points out that “big hotel brands want spots that are easy to find and reach, like in the middle of the city, close to airports, or out in beautiful, peaceful areas for resorts.” Openings for architects-designers Greenfield developments create opportunities for architects and interior designers alike. Dikshu Kukreja, Principal Architect, CP Kukreja Architects, designers of The Lalit, Taj, Marriott and The Westin hotels, believes that greenfield developments present a great opportunity for Indian designers to bring forth the unique facets of the design sensibility of the specific region and the unique ecologies of the places where these projects are being conceived to deliver a holistic experience of India’s wide art, culture and diversity. Mitu Mathur, Director, GPM Architects and Planners, who has designed for brands like the Radisson and Marriott, feels the emphasis on greenfield developments has heightened the focus on sustainable and eco-friendly designs. “The Northeast, for example, presents a unique opportunity for sustainable tourism development that prioritises environmental conservation and community involvement,” she says. Of course architects must adhere to their clients’ mandate. For instance, insofar as the structure is concerned, Nikhil Shah, Senior Director, Hospitality, Capital Markets & Investment Services, Colliers India points out that some chains necessitate standalone structures rather than mixed-use buildings, while others prefer sprawling resort layouts over compact hotel structures like box buildings. The square footage requirement varies across different hotel segments. Rooms in luxury hotels typically demand a gross floor space of around 1,000 to 1,500 square feet, while those in upscale hotels may range between 750 to 1000 square feet, explains Shah. “Midscale establishments typically target 500 to 800 square feet per room, while budget and economy hotels generally operate within a space of 400 or lower square feet per room.” Irrespective of the segment, he emphasises, “adaptable, efficient design layouts help cater to diverse guest preferences.” Indian versus overseas architects-designers Brands want their properties to reflect world-class aesthetics and functionality, as well as India’s rich cultural heritage, says Magazine. They choose between global or Indian architects depending on which of these leanings is more prominent. There’s no reason to doubt the capability of Indian architects. “Indian consultants have designed for national brands such as the ITC, Oberoi and Taj, which have developed their own standards and parameters in line with international norms, and a few like IMK Architects and CP Kukreja have also done international projects,” points out Prem Nath, Principal, Prem Nath and Associates, who has designed for the Hilton Group and the Taj. Khozema Chitalwala, Principal Architect, Designers Group, who has experience in designing for brands such as Marriott, Vivanta and Fairfield, too, is confident that India’s architect and designer talent pool has matured significantly over the years, reducing the need for excessive reliance on international expertise. “Many firms, including ours with a 25-year track record in hospitality, have honed their expertise in this sector and have delivered outstanding projects adhering to the highest standards,” he observes. Having said that, Chitalwala points out that “even if a hospitality brand brings onboard an international consultant, that firm often requires a local architect to navigate India’s unique norms and requirements.” Indian architects are best positioned to blend the best of both worlds: modern design skills with time-honoured Indian ways of building, opines Nagpal. Chitalwala agrees: “A local architect-designer with an understanding of local nuances and socio-cultural influences that shape architecture and interior design is invaluable in crafting designs that resonate with the community and reflect its identity.” Materials for branded projects Choosing materials for a branded hospitality project in India involves carefully considering several key factors to ensure the design aligns with brand standards, meets functional requirements, resonates with local aesthetics, and contributes to a memorable guest experience, says Mathur. While the selection of materials is governed by the project’s overall design aesthetics, we always also ensure that it responds to the local geographical context, adds Kukreja. For example, the materials for a project in the hills have to reflect its local sensitivities, a coastal project should use materials that emphasise durability and resistance to corrosion from saltwater and humidity, while a project in an urban setting might prioritise sleek, modern materials that complement the surrounding architecture, he explains. Additionally, choosing materials that are suitable as well as relevant to the area ensures that the selection not only enhances the design but also resonates with the surroundings, creating a cohesive and meaningful experience for guests. Chitalwala believes that a local hospitality designer or architect is better positioned to select materials that offer longevity, durability and sustainability, and ensuring that the project meets the highest standards of quality and responsibility though meticulous planning, and taking into account factors such as maintenance, housekeeping and engineering requirements. Preference for local materials An interesting ongoing industry-wide shift concerns the notion of luxury in interiors, this is moving away from its traditional connotation of expensive materiality and high-gloss finishes into something far more experiential, which offers immense opportunities to craft authentic narratives in the built environment, observes Asha Sairam, Principal, Studio Lotus, which has designed for brands such as IHCL, Oberoi, RAAS. We’re seeing a ‘go local’ trend, with Indian architects using traditional materials like jaali, earth, oxide finishes, and bamboo, which look amazing, show off India’s rich heritage and give guests a memorable stay that’s not just comfortable but also deeply immersive and genuine, opines Nagpal. “These preferences are sustainable, well suited to India’s climate and make economic sense, both from the out-of-pocket cost perspective as well as from the perspective of getting great guest feedback and attracting more business. In the present-day scenario, being green and sustainable is non-negotiable, and this, in turn, is driving the use of environment-friendly, local materials and energy- and water-saving technologies.” We prefer locally sourced materials over imports from distant regions, not only for their environmental benefits but also for their cost-effectiveness, says Chitalwala. “Although the quality and type of materials may vary depending on the brand specifications, these fundamental considerations remain consistent.” “Local materials and construction techniques can provide a characteristic aesthetic to design as well as promote indigenous arts and crafts,” adds Mathur. “At GPM, we believe in glocal, local is the new global.” Emerging trends and prospects Emerging trends are suggestive of the developing opportunities for allied industries and skilled people. For instance, Nagpal points out that in every hospitality segment but especially in the business segment, technology has become a big deal since the pandemic ushered in a shift towards hybrid events and digital meetups. Business hotels are getting a tech makeover, to ensure travellers have all they need to blend in-person and online work seamlessly. Health and wellness is emerging as a segment of its own and attracting more interest and investments, especially in a post pandemic world, notes Dang. “A noticeable surge in wellness tourism has doubled the domestic clientele at destinations like Ananda in the Himalayas,” adds Shah, in agreement. Magazine attests to a noticeable trend towards adopting the asset-light franchise model, enabling rapid expansion and flexibility in introducing new brands that resonate with the evolving tastes of domestic and international guests. Vivanta, Ginger, Accor and Treebo are some brands adopting this model. While management contracts continue to dominate the majority of signings, representing 78 per cent of the total number of keys, Dang points out that there has been a notable increase in lease and revenue share models across different tiers, comprising 4 per cent of the total keys signed. The going has been good and it promises to get even better. “Growing connectivity and government initiatives such as the Smart Cities Mission have led to the establishment of new IT hubs and industrial corridors that will need hotels to cater to the anticipated demand,” envisages Dang. While Magazine points out that India’s demographic advantages and sustained appetite for leisure and experiential travel has set the stage for continued growth and innovation in the hospitality sector real estate. What could be better?