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HVS is much stronger today with stronger and cohesive partners: Stephen Rushmore Jr.

2019 will set new records in hotel transactions in India: HVS Anarock

Wednesday, March 27, 2019, 14:36 Hrs  [IST]
HBI Staff | New Delhi

Stephen Rushmore Jr., President & CEO of HVS has said that the global hotel consultancy company is much stronger today with cohesive partners across markets including India.  He said that HVS has much more cohesive partners as replacements in markets including India to service the industry clients better. He was speaking to Hospitality Biz on the sidelines of the first formal partnership event organised by HVS Anarock for the industry partners in Delhi.

“The direction I wanted to give to the company was different from what my father was doing.  As a result of the new direction, the company is stronger today with “cohesive group of like-minded partners,” he said.  “It’s quite natural when succession happens in businesses,” he said playing down the question of few partners parting ways with new leadership taking over.  “A cohesive group is better than few individuals.  I am absolutely sure that the people who we are partnering with now are fully aligned with the new direction of the company.”  Instead of creating events which directly competes with existing ones, Rushmore said that they will look at building platforms to have “stronger engagement” with both hotel developers and brands in the market. 

Earlier, giving an overview of the performance of the hotel industry in India over the last two years Mandeep Lamba, President – South Asia, HVS Anarock,  said that the occupancies have grown by 8.2% in the last two years resulting in an ADR growth of 7.2%.  Although the RevPAR grew by 17% in the last two years, the same hasn’t been carried in the same fashion into the GOP of the hotels, which stood at 5.3%, he said.  HVS Anarock expects RevPARs and GOPs to rise further this year by 9.5% and 8%, respectively. “Elections will be a slight dampener this year,” he said. While supply is expected to grow by 4%, the demand for hotels will be around 7%. 

HVS Anarock expects 2019 to set new records in hotel transactions in India.  The company estimates the hotel transaction market in India to exceed US$ 800 million this year.  This is after a 10-year low in hotel transactions in 2018. He said that a number of big-ticket transactions are on the cards this year.  The volume of hotel transactions last year was close to US$ 78 million involving only three hotel properties.

There have been a 15% increase in new signings in the last two years in India and translated into hotel rooms, this comes to 20,000 new hotel rooms.  Among the business models, management contracts continue to be the most preferred partnership model in India with 76%.  There was phenomenal traction for rebranding in India, and the market has witnessed 67% growth in rebranding in the last two years, Lamba said.  

In the hotel development, the mid-scale and lower end of the upscale rules the roost and there has been a drastic decline in investments in the economy and luxury hotels in India.   There have been large addition in terms of new inventory in markets like Bengaluru, Goa, Jaipur, Noida, etc.  For a change, hotel companies have started stepping out of the key cities to tap opportunities in Tier II and III cities in the country, he added.

Lamba said that the hotel industry has to look seriously at emerging segments of travel like millennials, LGBT segment, etc. who are more experience-oriented.  He also advised the industry to look beyond the legacy F&B models to make public areas more revenue generating.  He suggested outsourcing and reverse the outsourcing of F&B outlets.

Earlier, in his introductory speech about the new tie-up between Anarock and HVS, Anuj Puri, Chairman of Anarock Property Consultants said that the joint venture was the “easiest association” that ever happened in any business tie up.  He said that Anarock has been doing hotel transactions for long, but the global knowledge, expertise, networking, and contacts of HVS being present in 50 different locations will help them to provide best of service to hotel clients in the region.  Puri said that the industry clients can expect a truly “Glocal” solution to their problems with the global knowledge of HVS and the local expertise of Anarock. 

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