With hotel development in the dumper in the U.S., a number of chains are looking elsewhere for growth. This week, India came into focus for two companies—Choice Hotels and Carlson Hotels—as both made major announcements during the Hotel Investment Forum India Conference in Mumbai. Both chains made acquisitions and spoke of aggressive growth in the country.
Carlson raised its stake in RHW Hotel Management Services from 13 to 87 percent, creating a new integrated organization to develop, operate and market hotels in India. Carlson also said it plans to triple its Indian portfolio—from 28 to 78 hotels—by 2012. Half of the growth will come in the Radisson brand, with another 15 Country Inns & Suites and 10 Park Plaza or Park Inn properties in the plans.
Not to be outdone, Choice said it purchased the remaining 60-percent ownership in Choice Hospitality India, its master franchisor in the region. And without placing a number on its growth goals, Choice President & CEO Steve Joyce says the company plans to "focus extensive development resources on growing our presence in India." The company also currently has 28 hotels in the country.
While these grandiose announcements make good copy, it's a difficult process to develop hotels in India, a country that, despite its democratic traditions, solid workforce and economic growth, has major infrastructure issues that must be solved before any meaningful widespread U.S.-style lodging can take hold in the country. Roads are lousy, the power grid is sketchy and a potential for civil unrest or terrorism lingers. One strong positive, however, is the Indian-American hotel community. Many U.S.-based Indian hotel owners are very active in developing lodging properties in their native land. In many cases, they have the contacts and in-house partners available to make deals and developments happen. It will be very interesting to watch the Indian hotel market blossom in the next decade or two, thanks in large part to the efforts of American companies and citizens.