India’s branded hotel supply may exceed estimates: Radisson

India’s branded hotel room inventory should far surpass the current around 200,000 in the coming years, supported by the country’s robust economic fundamentals, Federico J Gonzalez, CEO, Radisson Hotel Group and board director Louvre Hotels Group said on the sidelines of the ET World Leaders Forum.

Radisson has nearly 220 hotels in operation and development in the country. “I think everything seems to indicate that India is the right place to be,” said Gonzalez. “The supply in India should increase beyond the expectations we have. India has about 200,000 branded rooms, but this is well below what a country like India should have.”

He emphasised that there is possibly no other country growing at 6-7% annually with expectations the growth rate will sustain.

“I know there is an expectation of 7-10% supply growth every year, but if the country keeps growing at this pace, and there are considerable improvements in infrastructure, and in the complex permits situation that we have here…if there is progress in that direction, the pipeline will grow more,” he said.

In March this year, Gonzalez had told ET that India should emerge as the top hospitality market globally for Radisson and the chain should aim to have 500 hotels in the country by 2030.

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Radisson currently has a “meaningful presence” in India through its own brands and Sarovar Hotels in which group company Louvre Hotels Group has a majority stake, according to Gonzalez. He said if the hotel brands such as Sarovar under Louvre, and Radisson properties are combined, the portfolio would rank second in India in terms of number of hotels and third in terms of number of rooms.”When you benchmark us against competition in India, we keep doing better on the revenue generating index. That means the owner of the hotel can make more revenue with us,” said Gonzalez. “In terms of gross operating profit as well, we are making very good progress. We keep providing tools that help us increase the profitability of the hotels.” Gonzalez noted that China as a market has plateaued for Radisson, while Europe, Middle East, and Africa are performing well.”We have seen good growth in terms of signings and performance of existing hotels in France, Spain, Italy, the UK, and the Nordic markets. Baltics is a region that has been affected by the Ukraine and Russia conflict. With the exception of the Iran conflict, our growth in the Middle East, and markets such as the Emirates and Saudi Arabia has been very healthy,” he said.Gonzalez also pointed out that it is vital to maintain a good balance between managed and franchised hotels.

“Many of our competitors like Marriott and Hilton are moving only to franchised arrangements worldwide. Which means that they are no longer managing hotels in some markets and segments. We are very happy about that because we are better managers. That means we have more space to grow,” he said.

To increase foreign tourist arrivals, he suggested that India should focus on specific destinations and make them more accessible to overseas tourists.

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