Marriott International Inc., the top U.S. hotel operator, said on Friday it would more than triple its hotel portfolio in India by the end of 2010 as it cashes in on rising business and leisure travel.
Marriott, which manages nearly 2,900 hotels under brands including Ritz-Carlton and Residence Inn, will manage 21 properties by 2010 in India's underserved market, it said.
The hotel operator expects its moderately priced Courtyard brand will expand faster than its more premium brands as India's middle class grows more prosperous and more international operators crowd the luxury segment.
If you look at markets like China and India, most operators are coming in at the higher end, maybe from an ego standpoint, said Geoff Garside, executive vice president of Asia Pacific.
But we have seen our Courtyard brand growing more quickly, as it meets the needs of the middle management that is travelling more often, he told reporters.
Of the 15 Marriott hotels scheduled to open in India by 2010, eight will be Courtyard hotels, he said.
Global hotel chains are increasingly targeting booming emerging economies for expansion, with India and China set to become major battlefields for future growth.
InterContinental Hotels, Hilton Hotels, Shangri-La and Accor are among those expanding in India, often with management contracts for properties they do not own on account of the high cost of land.
Local operators include Indian Hotels Co. Ltd., the owner of the Taj chain of luxury hotels and resorts, EIH Ltd., the owner of the Oberoi hotel brand, Hotel Leela Venture Ltd. and Asian Hotels Ltd.
India has about 100,000 hotel rooms and needs an additional 100,000-125,000 rooms over the next five years, analysts say.
A booming economy is boosting business travel, while rising incomes and cheap air fares are encouraging domestic travel.
That is helping boost revenue per available room (revpar) -- a key measure of the health of the industry -- faster than even China's, which is a somewhat more mature market, Garside said.
We are seeing revpar increases in the low teens in China, and India is a little ahead of that, he said.
It may moderate a bit with more supply coming in, but supply is still not coming in quickly enough, so we are going to continue to see very strong occupancy, he said.