Dimitris Manikis, president of EMEA (Europe, Middle East and Africa) at US-based hotel company Wyndham Hotels & Resorts, who is in India on a market tour, told Mint that budget and midscale hotels will be the future, at least for their brands here.
“Luxury travel has peaked and we see it slowing down now. Every hotel CEO around the world is now talking about mid-scale and economy travel as the future. This is helping to democratize travel, just like budget airlines did. We believe in democratizing travel and adapting to the needs of the new consumer,” he said.
The company operates hotels under brands such as Ramada, Days Inn and Wyndham in India.
The focus will remain on the country’s economy and mid-market segments. “We and other Indian hospitality companies expanding overseas are inspired by the same thing: the 150 million people who travel abroad. Unlike the Chinese, who generally prefer to travel abroad in Southeast Asia, Indians prefer to travel globally,” he said. This makes sense, given that a recent report said Indian tourists going abroad are expected to spend $18.82 billion in 2024, according to a new report, as travel returns to pre-pandemic levels and new hotspots emerge.
Around 28.2 million Indians visited abroad last year, surpassing nearly 27 million in 2019. That year, Indians spent $28 billion on overseas travel, according to a FICCI-Nangia research paper titled “Navigating Horizons: The Rise and Future of Indian Outbound Tourism”, which cites government data.
Wyndham Hotels & Resorts has 63 franchised hotels in India, across seven brands, with about 5,500 rooms. There are another 45 hotels under construction with a similar inventory of 5,000 rooms that are at various stages of development. It has grown from about 50 hotels here in 2021. “We have more hotels under construction in India than ever before. We are also launching new brands like Wyndham Garden which will be launched by the end of the year,” Manikis said. It also has a new five-star hotel brand, Wyndham Grand, which will open in the first half of next year in Udaipur.
The company has about 500,000 rooms in the United States and another 385,000 in the rest of the world. It has over 9,200 hotels worldwide. But in the Asian context, in Asia (excluding China), the company has about 36,500 rooms, and India has more than one-seventh of its entire room inventory in the region.
Business in India
Manikis said the company bucked the trend of a weak first quarter, unlike other hospitality companies in India. Last week, Mint reported that the Indian hospitality industry reported mixed results for the June quarter as general elections, extreme weather and increased outbound travel hurt the sector’s performance. “Our books are growing in India. Because of the spaces we operate in – budget, economy and midscale hotels – we continue to do well here, because of our affordable pricing. Luxury hotels are only 12% of the hotels globally and that figure is perhaps even lower for India. Not many people can afford it.” ₹“24,000 rooms per night. Our focus is on the remaining 90%,” he said.
“Lowering rates is not a good strategy for hotels in general. We will not lower any rates. We will only do it for special events or occasions from now on. The luxury brand Gucci has lost value because it has not maintained its price range worldwide. In the consumer’s mind, buying a brand that does not change its rates is better than a brand that offers deep discounts,” he added.
In terms of average daily rates, a measure by which the rate of a hotel room is calculated, the first half of 2024 saw a growth of 7-8% over the same period last year, and also saw occupancy increase by 2-3%. This was despite the fact that the general elections and fewer auspicious wedding dates reduced travel during the period. The company also operates brands like Howard Johnson, Hawthorn Suites, Days Hotel, Trademark Collection here and recently opened hotels in Amritsar, Udaipur and Gorakhpur.
The Power of the Indian Tourist
He said it was a “stupid” decision for continents like Europe to delay issuing visas or deny visas to Indians. “Indians are the travellers of the future. They are young, have disposable income and are educated. They are going to want to explore places. It doesn’t make sense to me that European countries are not issuing enough visas to Indians. Europe has an ageing population. They should take a leaf out of countries like Georgia, Dubai and Vietnam, which are welcoming people with open arms. That’s why we, as a hospitality company, are looking at India from two angles: how to attract more tourists to India and how to get business from travellers who are leaving India,” he added.
However, India's business remains fairly modest in the company's overall picture. In fact, India isn't even mentioned in its global financial results for the quarter ended June.
