Ground Report

 

 

Marriott International is planning to set up 100 hotels in India by the year 2015. At present it has two hotels in India under the brand name JW Marriott. The first hotel in Mumbai was opened a decade back. Recently it opened another hotel in the planned city of Chandigarh. It is JW Marriott’s 13^th property in India and altogether it has 53 JW Marriott properties worldwide. Marriott International has 3500 hotels in 70 countries and 30 million Marriott Reward members. Compared to its international scale of operations, Indian operations form only a very small part. But it is giving more importance to India because of the growth potential of the country. India is already recognised as the fourth largest economic power in the world, next to USA, China and Germany. In Asia it is the second highest economic power next to China. In terms of purchasing power, India is third largest in the world. Therefore, Marriott is sensing a big opportunity in India in the near-future. It also opened recently its 179-room Courtyard in Pune and 364-room Jaipur Marriott. In 12 years of operations in India, it has now 15 hotels. In another four years, this number will increase to 100. Marriott International Inc is listed in New York Stock Exchange and has a market capitalisation of more than $10 billion.

 

 

Under the Fairfield Inn brand, Marriott has no property now in India and is planning to have 24 properties by 2015. Under the Courtyard brand, Marriott has 7 properties in India now and is planning to increase it to 28 by 2015. Under the Marriott Executive Apartments brand, there is one property now, which will be raised to four properties by 2015. Under Marriott Hotels & Resorts brand, Marriott has 4 properties now and it will be increased to 6 by 2015. Under Renaissance brand, Marriott has one property now and it plans to increase it to 6 properties by 2015. Under JW Marriott brand, there are 2 properties now and it will be increased to 10 by 2015. Under Ritz Carlton brand, there are no properties now and it will be increased to 2 by 2015.

 

 

One aspect of the company’s expansion in India is that these hotels are not going to be concentrated only in big cosmopolitan and metropolitan cities like Mumbai, Delhi, Kolkata, Bangalore, Chennai etc but will be spread over important places across entire India. This will boost the hotel’s brand image and its Indian operations will be firmly entrenched in future. At the international level, Marriott uses 20 sub-brands. In India, is has used 5 sub-brands so far. It may use more brands when it increases its final tally to 100 properties by 2015. Even small and satellite cities like Gurgaon, Pune, Hyderabad, Ahmedabad, Bilaspur, Kochi, Guwahati, Raipur, Ludhiana, Shillong, Jalandhar, Bhopal and Amritsar will be covered in the expansion.

 

 

Marriott’s properties come under the divisions namely Americas, Asia-Pacific, Europe and Middle East & Africa. Among these divisions, Asia-Pacific is the fastest growing region. In Asia-Pacific, India is the fastest growing country. Therefore, one can understand the importance attached to India. Marriott has 60 properties in China, but growth in China is lopsided and coming only in the Eastern coastal region highlighting Shanghai port city. But in India, growth is sensed across all regions including the East. The growing income and with it the purchasing power has helped Indians to travel across the world and do business. Earlier, all international hotels including Marriott had their customer mix as 70% foreign travellers and 30% Indians. Today, the ratio has reversed with 70% of the customers coming from India itself and 30% from foreign countries. The economic slowdown and debt crisis in USA and Europe has compounded the problems of foreign business travellers and tourists arriving in India. At the same time, the prosperity and boom in India has helped Indians to spread their wings out. In India, the Rahejas are helping Marriott to develop properties in vital places like Mumbai, Pune, Bangalore and Chennai. Rahejas are well experienced in real estate and construction activities and can give timely advice on acquiring properties.

 

Marriott International Inc is the largest publicly traded US hotel chain. It is planning for a record number of 27 hotel start-ups in Asia in 2013. It started its Asian operations in 1989. Craig Smith is the Chief Operations Officer of Asia Pacific region. Marriott already has 135 hotels in Asia and another 110 hotels are under development. The majority of the hotel openings will cater to China and India. It will also open hotels in Thailand and Vietnam. Marriott has tweaked its Fairfield Inn and Courtyard brands to suit the needs of the Indian customer. It launched an economy band Fairfield Inn in India to suit Indian customers. The Courtyard looks different in USA. But in India, Marriott has added an executive lounge and free high-speed internet. A team from US spent six months, studying the needs of local people in India, before finalising the features of Fairfield Inn. At Manesar, these new features have been incorporated for the first time in Fairfield Inn. It has larger rooms, a three-means-a-day restaurant serving Indian and Western cuisine and a bar. India contributes 10% of Marriott’s annual revenue of $2.5 billion from Asia-Pacific region. In future, this share is expected to increase.

 

 

At a time when very little differentiates one hotel chain from another in the top category, it is service that can make a difference and bring the customer back. Marriott introduced the “voyager” programme in India, under which graduates from varied backgrounds are asked to undergo a rigorous two-year training programme at group properties across India before graduating as assistant managers. The success of this programme has prompted Marriott to extend this to other parts of Asia also. In addition to hiring people of right aptitude from right places with right background, the training programme takes care of the quality part of the service offered by Marriott. There is established system in Marriott to measure guest satisfaction scores periodically.

 

 

As stated before, Marriott has aggressive plans to increase its strength in India from 14 hotels and 3200 rooms to 100 hotels and 15000 rooms by 2015. Along with this tremendous expansion, it will be a challenge to maintain and improve the quality of service in order to service the brand image. Only if the quality of service is also maintained at the same level at least can the company realise its plans of India contributing around 35% of its Asia Pacific turnover. In India especially, Marriott will be concentrating on the Courtyard brand more than other brands as that suits Indian taste and culture. Moreover Courtyard can be expanded into even smaller cities. This year, Marriott has seen a double digit growth in revenue per available room. This shows that Marriott should be experiencing a good occupancy rate this year. In Ahmedabad, Marriott recently started a pure vegetarian restaurant called Shakahari. This is the first vegetarian restaurant started by Marriott anywhere across the whole world. It is a success. Now Marriott is extending this vegetarian concept to Pune. In Chennai also, there is a lot of potential as many people with high purchasing power are vegetarians.