Indian travellers are driving growth in the travel industry: Hyatt CEO Mark S. Hoplamazian

Mark S. Hoplamazian, President and CEO of the Hyatt Hotels Corp visited Mumbai recently. Earlier, he was President of The Pritzker Organization (TPO), the principal financial and investment advisor for the Pritzker family’s business interests. Moneycontrol caught up with him for a chat on the group’s business in India.

Hoplamazian detailed plans for the chain’s expansion, how the sector is poised for transformation, and why he prefers regular rooms to suites. Globally, Hyatt runs 1,200 hotels and properties, with brands such as Andaz, Hyatt Place, Miraval, Hyatt Centric, Park Hyatt, and more. The chain is present in 72 countries across six continents, has a market cap of $10 billion and generated revenues of around $3 billion in 2021.

Edited Excerpts:

Q. Now that the market is bouncing back, what are Hyatt’s plans for India?

A: There are two dimensions that we are looking at. One is growth. We've opened eight new hotels this year, and next year we are slated to open 10. We'll end up with around 50 hotels in India by the end of next year. I've been a big supporter of our presence and growth in India since I became CEO of Hyatt some 16 years back. There’s no question that growth has waxed and waned over the years. But it seems better now than it has ever been in my tenure.

We are also expanding the number of brands that we have in the country. JdV by Hyatt, which is a lifestyle brand, is slated to open in Goa in the coming year. The other is the Unbound Collection, a luxury brand. It's not a hard brand, it's a soft brand, where you take existing hotels that have something special about them and include them in your network. You support them with sales, marketing, access to a loyalty programme, and distribution. A palace in Bhopal will become part of the Unbound Collection. We have quite a few Unbound Collection hotels in Europe. They tend to cost 1,000 Euro per night on average.

So properties and brands is one dimension. The other dimension is people.

Q: Tell us more...

A: We are very focused on bringing more people from disadvantaged backgrounds into our industry because the hospitality business is uniquely placed to hire people with limited or no skills, train them, and give them a career path. I think this year we'll have about 300 new colleagues from such backgrounds.

Q: You acquired Sant Singh Chatwal’s Dream Hotel Group earlier – will that also come to India?

A: We're working on the blueprint right now because we think that being very deliberate about how we grow each brand is very important. I think there are markets in India which would be perfectly suited to a Dream hotel. The Dream hotel company has 12 hotels that are open, and 24 are in the pipeline. Quite a few of the ones in the pipeline are outside the US — in Europe, and also in the Middle East. So we have strength across Asia because we have a very good presence in most gateway cities. I think it's inevitable that we will bring the Dream to India.

Q: There is a lot more competition today with market leaders like IHCL as well as global juggernauts like Marriott expanding rapidly in India.

A: Our strategy has always been to grow with intent. What that means is being very deliberate about understanding where our customers are travelling to and what they're looking for. And then focusing on those markets with the relevant brands, as opposed to simply planting as many flags as we possibly can.

More opportunities in the leisure vertical in Rajasthan, which I consider to be one of the gems of India, would be fantastic. Further north and in the northeast, there's interest in wellness travel, and destination resorts. The recovery of the Indian market has been led by leisure like it has been in almost every market around the world.

The market is dominated by Indian customers because it's been so difficult to get into India with all the Covid restrictions. But that has changed since.

Q. How do you ensure that an employee who is a dish-washer imbibes the culture of the Hyatt family?

A: That's both simple and difficult. We're a family-owned company, and everyone who works with Hyatt is considered a member of the Hyatt family. This idea of the family has been with us since the company was founded in 1957. We care for our people so that they can be their best.

A lot of people in the hospitality industry talk about great service, but we don't think that that's what will have an impact on people and their experience. We believe that caring for them is what will do that. So what's the difference? The difference is that you have to practice empathy and understand what the person you're dealing with — whether it's a corporate executive, a family member, or a hotel guest — what's going on with them, and what they need in the moment.

To help them be their best does not mean creating an artificial environment, it means helping guests be their best whether they're at the hotel to celebrate a wedding, graduation, or a meeting. It doesn't matter what the purpose is.

We live in the real world. We're not at a theme park, we deal with the daily lives of human beings.

For example, you could come and stay at one of our hotels. We might put you in a big suite with a huge selection of alcohol. And you may be a teetotaller. Is that caring for you? No, it's pushing stuff at you. To care is to understand what you want and need. Like me, you might hate staying in suites because it takes too long to turn off all the lights. I like staying in regular rooms. These are the kinds of things that make a difference in how people experience us as a company, and how they experience their lives when they're staying with us.

Q: Do you see Indian tariffs ever reaching international levels considering they have historically been lower than most countries?

A: We operate in an industry that follows the basic rules of supply and demand, and supply has been very low. But demand has now exploded. So it's not surprising that you see rates escalating. In many ways, India is catching up after an extended period of very low rates once inbound international travel is back.

Today, international travellers comprise a small minority of our guests, whereas earlier they used to be the majority. That the rates have increased nonetheless demonstrates that Indian travellers have the appetite and the capacity to pay.

Q. In five years will Indian hotel rates be on par with foreign hotels?

A: It's going to happen faster than that because of the power of the Indian economy and the increase in international travel to India for business and leisure. I believe that once people really discover what India has to offer, they're going to be drawn to it more and more. So part of our job is to actually educate people about the incredible and unique experiences that are available in the country. There are positive growth drivers from both the leisure and business perspectives.

Q: What do you see driving the next wave of growth for hotels In India?

A: We have the G20 summit in the coming year. That's 250 separate meetings in different places across the country. That’s going to be a driver. Then the following year we have the cricket World Cup, which will trigger a lot of travel.

Mumbai is increasingly difficult to grow in because very few new sites are available. The same is true of old Delhi. But Bangalore has a lot of growth opportunities. We see significant growth potential in Trivandrum and across Kerala. It's going to be very widespread. But there's no question that the maximum growth will be in the major cities.

Q: Most corporations are chalking out their China+One strategy. How do you see that fitting into your plans?

A: Given the demographics of India, we're talking about serving a travelling public here which will be the travelling public of the next 50 years because the average age of the population is quite young. Those dynamics are going to be really powerful. From India, we've not only exported talent to other markets in Hyatt Hotels but also travellers. Everyone talks about outbound Chinese travel, but outbound Indian travel is also really significant, not to mention the huge NRI community that we serve outside of India, which also comes to India.

We've paid special attention to places that expat Indians come back to. For example, when we built the Grand Hyatt Kochi we identified locations where Keralites have concentrated abroad and made sure that we informed them through their travel agencies and otherwise, told them that there was a great new option back home for weddings and family gatherings. So the spending on travel, both inbound and outbound, is going to grow.

However, it'll be a long time before any market surpasses the United States. In China, we have about twice the number of hotels as in India.

Q. What is your biggest challenge at hand in India?

A: The last two years have been very challenging for a lot of owners. Now, revenues are up, and margins are up to record levels. We need to sustain that because a lot of owners ended up having to take on more debt. Thus, ensuring good cash flow for our owners is the immediate focus. In the longer term, the opportunity (not the challenge) is talent — which is the longer-term focus for us.