Hilton is expanding its presence across Asia-Pacific as it bets on India becoming one of the world’s largest hotel markets, with Alan Watts, the company’s president of Asia-Pacific, calling India the most exciting travel and tourism market globally for the next decade.
Watts predicted that India will become the third-largest lodging market in the world. “We’re seeing strong momentum across a number of Asia-Pacific markets, including Southeast Asia and Japan,” Watts told CNBC. “One of the most important trends shaping our business is the strength of intra-Asia travel. Today, around eight out of every 10 room nights in the region are generated by travellers from within Asia, which gives us great confidence in the market’s resilience and long-term growth prospects.”
Why is Hilton betting on India?
Hilton’s bullish outlook on India comes as weakness in Chinese consumer confidence weighs on the company’s regional performance. Revenue per available room (RevPAR) in Asia-Pacific rose just over 1 per cent in the second quarter, which Watts said was entirely related to the business in China. The Chinese market has been hurt by weak consumer confidence outside holiday periods.
Religious tourism is one part of Hilton’s India strategy. Watts said there is almost no branded supply at pilgrimage destinations such as Ayodhya and Tirupati, despite the enormous crowds they attract. Indian real estate owners are also funding the build-out of hotels in these locations themselves, Watts said. “They’re of course coming to us to manage their properties, but we haven’t been asked for balance sheet commitment.”
Hilton currently has 60 hotels in various stages of construction in India, along with commitments for another 400 properties with major partners. The company is shifting its focus from flagship properties in tier-I cities towards mid-scale brands such as Hampton and Spark by Hilton, which are aimed at domestic travellers in tier-II and tier-III cities.
Hilton also sees opportunities across different segments of the hospitality business throughout the wider Asia-Pacific region. “We see opportunity at all price points, and continue to benefit from rapid infrastructure investments, paired with rising consumer appetite for travel, expanding middle classes and improving connectivity across the region,” Watts said, reported CNBC.
