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The hospitality industry may currently be grappling with 15 percent-plus occupancy dips, but the economic growth expected in emerging markets actually means more beds are being rolled out than ever before - and in far more directions.
In May, Four Seasons Hotels’ veteran CEO Isadore Sharp confirmed the company would double the number of its hotels and employees within the next 10 years, taking the group to more than 160 establishments and 80,000 employees. Starwood, whose brands include St. Regis, Le Méridien and Sheraton, insists it is on track to increase its global portfolio by 40 percent over the next five years, with Simon Turner, global development president, cheerfully talking about "building, opening, converting, renovating and innovating for the recovery and beyond." Meanwhile, Marriott, which manages the Ritz Carlton and Renaissance brands, plans to open 130 hotels in the next four years outside North America - half in China, India and the UAE.
According to the most recent research by global analyst Lodging Econometrics (LE), China is among the most dynamic building spots - of the 938 projects in the pipeline now being "actively pursued" there, an impressive 709 will probably open in 2009 or 2010 - as is India, where of the 462 projects in the pipeline, 202 look a safe bet to open by the end of 2010. In total, LE predicts that throughout the entire EMEA region, more than 81,000 new rooms will become available in 2009 and another 94,000-plus in 2010.
Yet many of these new projects will have an even more exotic flavour, reflecting the fact that increasing numbers of local players are now also investing in the future. Take India’s Leela Palaces, Hotels and Resorts, which boasts upscale havens in Mumbai, Goa, Kerala, Gurgaon, Udaipur and Bangalore. The company is frenziedly planning hotels for Chennai, New Delhi Agra, Hyderabad and Pune, in an effort to capitalise on India’s growing number of high-end business and leisure travellers. They also recently struck marketing alliances with Germany’s Kempinski Hotels and the US-based Preferred Hotel Group.
Giving Leela a run for its rupees is Taj Hotels Resorts and Palaces, which is currently adding to the 64 hotels it runs in 45 cities throughout India and the 16 international hotels it has the Maldives, Mauritius, Malaysia, Australia, UK, US, Bhutan, Sri Lanka, Africa and the Middle East. The Pierre, the group’s New York flagship, reopens on 1 June.
In Asia, several players have big plans. For example, anyone wanting to "experience the glamour of the Golden Age of Old Shanghai" could check out the new Langham Yangtze Boutique, Shanghai, part of Langham Hotels International, a Hong Kong-headquartered group planning several openings throughout Asia. From October, those wanting something sleeker and more modern could check out Swire Hotels’ second property, the 117-room Upper House in Hong Kong, which promises a sixth-floor garden and a sky lounge. The hotel will join The Opposite House, Swire’s first property, which opened in Beijing last September. Swire also plans to open East, a 345-room property in Hong Kong, in 2010.
Latin America is also benefitting from the general undersupply of hotels. Barcelona’s Meridia Capital has been discreetly snapping up hotels in underexploited cities such as Santiago, Chile, and it is also targeting São Paulo and Rio de Janeiro. GHL Grupo Hoteles, based in Bogata, Colombia, plans to open seven hotels in Colombia, Chile and Peru in the next year, with Boston-based Sonesta International Hotels Corp. In addition, Brazilian giant Atlantica Hotels began building three new projects in January and claims it is still on target to build 10 properties a year. Brazil accounts for a third of the Latin America pipeline, with 193 projects comprising 32,819 rooms as of year-end 2008, LE reports.
Meanwhile, following a massive restructuring, South Africa’s Protea - which owns African Pride, the company with luxury properties in South Africa, Kenya and Namibia - also promises several new openings in the next few years.
Patrick Ford, president of Lodging Econometrics, believes that despite the major international chains piling in to their territories, local players do have advantages. "In many cases, companies like Leela, Mandarin Oriental, Taj or Oberoi are regarded like the national airlines," he says. "They are very prominent brands in their own countries and are associated with the country’s culture. They have their own band of local frequent travellers who will need to travel regardless of how the global economy is doing".
Ford says that without employing the franchise model, new players will not be able to expand globally but can be in a strong position to build up a global reputation if they offer good service.
Leela seems to recognise this. The Indian company’s new ad campaign, designed to raise the brand’s profile outside India, features various hotel employees including the company’s chairman, Captain C.P. Krishnan Nair. The message is meant to convey that a luxury hotel group must be humble and welcoming - wherever it is." |
