Global hotel chains eye India for development with more luxury signings

A room at Fairmont Hotels & Resorts. Image: Fairmont

International hotel chains are not only adding new rooms but are also increasing their luxury inventory in India with Hilton's luxury brand Waldorf Astoria debuting in India and Radisson and Minor Hotels bringing their premium brands to the country.

Hilton’s first Waldorf Astoria will launch in Jaipur with the hotel set to open its doors in 2027, even as the company explores other destinations like Goa.

Another luxury signing is from Thailand-based Minor Hotels, which will launch its Anantara brand this year, offering guests private plunge pools and terrace suits.

Radisson Hotels also announced the introduction of its luxury lifestyle brand, Radisson Collection, with the first such property coming up in Hyderabad.

Fairmont Hotels and Resorts, which is already present in Jaipur, said recently that it is gaining momentum in India and will be opening a property in Agra in 2025, with four others under development.

Marriott is in the early stages of developing its luxury industry portfolio in India and will continue to concentrate on this area in the future, said CEO Anthony Capuano during his India visit. The company's luxury brand JW Marriott made its debut this year in Goa.

As the Indian economy continues to grow, the demand for high-end luxury products in the luxury hotel market is expected to increase, said Nandivardhan Jain, CEO, Noesis, a hospitality consulting and hotel investment advisory firm.

The luxury hotels segment accounted for 14 percent of total signings by keys in India last year while its share was 11 percent in 2020 and 9 percent in 2018, according to industry estimates.

Keys refers to the number of rental units available for guests in a hotel.

While Indian brands such as Oberoi, Taj, ITC and Leela once dominated the traditional luxury hotel market in India, many global hotel chains have brought in their luxury brands to the Indian market in the last five years, Jain added. "The entry of brands like Ritz-Carlton, Park Hyatt, Raffles, Six Senses and Waldorf Astoria has diversified the market," he added.

Experts also note that in the aftermath of Covid-19, the luxury segment rebounded faster than other segments with the affluent class opting for premium stays for leisure holidays in the absence of international travel.

Love for luxury

"With a growing number of high net-worth individuals, India is becoming an attractive destination for luxury travel. This makes the luxury hotel market in India a highly attractive target for investment, and we can expect to see more supply coming in the next few years to meet the growing demand," Jain added.

According to recent research, the luxury hotels market in India is expected to grow at a compound annual growth rate of 18 percent from 2019 to 2025, noted Gautam Khanna, director of operations, Raffles Udaipur.

"The growth can be attributed to increasing disposable incomes and a rise in international tourism. The demand for luxury hotels is increasing due to the growth of medical tourism and business travel in India. The top luxury hotel brands are expanding their presence in top tourist destinations in India such as Goa, Jaipur, Udaipur and Agra to tap into the growing demand for luxury accommodation," Khanna added.

Rising disposable incomes, increasing tourism and the growing MICE (meetings, incentives, conferences and exhibitions) segment are some of the factors that will help expand the luxury hotel market in India, said hoteliers.

India is a lucrative market for luxury brands as India's middle class is expanding rapidly, and so is its disposable income, said Khanna.

"As India's economy continues to grow and more people enter the middle and upper classes, there is an increasing demand for high-end hospitality services. Also, India being a country with diverse cultures makes it a popular destination for international travellers from the United States, Europe and Asia as well," said Sumit Kumar, general manager of Hyatt Regency Dehradun.

The demand for luxury hotels has also increased in the wedding business, pointed out Puneet Dhawan, senior vice president of operations, India and South Asia, Accor.

He also said that compared to international travellers, Indians are generally price-conscious and seek good deals when booking hotels. "However, there is a growing number of affluent Indian travellers who are willing to spend more on luxury hotel stays and prioritise luxury experiences and amenities," he added.

Raffles' Khanna said that Indians are more likely to opt for premium services such as spa treatments, fine dining and personalised service from hotel staff. "In terms of priorities, Indians tend to look for hotels that offer a sense of grandeur and luxury, with iconic architecture and high-end amenities. In comparison to travellers in other international markets, Indians tend to prioritise value for money over the absolute cost of a hotel stay. While they are willing to spend a premium for luxury experiences, they are also mindful of getting the best deal possible," he added.

While the segment is expected to experience continued growth in 2023, Khanna pointed out some obstacles.

"The luxury hotel market in India is facing challenges, such as high real estate costs, labour shortages and intense competition. To stay competitive, luxury hotels need to differentiate themselves by offering unique experiences and exceptional service," he said.