Patel motels look for space in India
The paucity of hotels in the country has caught the attention of Asian American hotel owners.
By TNN |
NEW DELHI: The boom in the Indian hospitality industry and the paucity of hotels in the country has caught the attention of Asian American hotel owners, who among themselves own and manage over 22,000 hotel properties in United States and Canada with an inventory of over 1 million rooms. Asian American Hotel Owners Association (AAHOA), a group of hoteliers of Indian origin — largely from Gujarat — are scouting for partnerships with local Indian developers and hotelliers, targeting the budget and mid-scale segments.
“We would like to understand the opportunities in India in the limited service market, mostly in the budget and mid-market segments,” Fred Schwartz, president, AAHOA, told ET. The focus would be to target gateway and destination cities, airports, and highways. One thing that the 55-odd delegates - many of them first-generation hotelliers - are clear about is that they would prefer entering the Indian market with a local partner, even when government rules allow 100% FDI in the hospitality sector. India is currently facing a shortage of three lakh hotel rooms. Interestingly, over the last 15 years, the country has attracted FDI inflows to the tune of $450million in the hotel sector despite liberalised norms. Many in the industry feel that given the thrust to infrastructure related investments, FDI into the sector would grow three fold in the coming years.
The change in mood among Asian American community towards investing into Indian hospitality sector is very visible. According to Mukesh Mowji, chairman, AAHOA, “This is the first time that Asian American hoteliers are stepping out of US and looking for opportunities outside. Given our origin and familiarity with Indian conditions, the comfort levels are higher in India than anywhere else,”.
From running family-owned and managed units in the 70s and 80s, many of the Asian-American motelliers are now taking the franchising route and have tied up with international hotel chains. Around 2/3rd of AAHOA’s 8,000 members run franchisee operations of leading international hotel brands such as Carlson, Intercontinental Hotels Group, Accor and America’s Best Franchising Inc.
A FICCI-Evaluserve study notes that the government should come out with 10-year tax rebate for new budget hotels. It observed that uncertain levels of taxation by various state governments have made foreign investors wary of investing in the country.
“We would like to understand the opportunities in India in the limited service market, mostly in the budget and mid-market segments,” Fred Schwartz, president, AAHOA, told ET. The focus would be to target gateway and destination cities, airports, and highways. One thing that the 55-odd delegates - many of them first-generation hotelliers - are clear about is that they would prefer entering the Indian market with a local partner, even when government rules allow 100% FDI in the hospitality sector. India is currently facing a shortage of three lakh hotel rooms. Interestingly, over the last 15 years, the country has attracted FDI inflows to the tune of $450million in the hotel sector despite liberalised norms. Many in the industry feel that given the thrust to infrastructure related investments, FDI into the sector would grow three fold in the coming years.
The change in mood among Asian American community towards investing into Indian hospitality sector is very visible. According to Mukesh Mowji, chairman, AAHOA, “This is the first time that Asian American hoteliers are stepping out of US and looking for opportunities outside. Given our origin and familiarity with Indian conditions, the comfort levels are higher in India than anywhere else,”.
From running family-owned and managed units in the 70s and 80s, many of the Asian-American motelliers are now taking the franchising route and have tied up with international hotel chains. Around 2/3rd of AAHOA’s 8,000 members run franchisee operations of leading international hotel brands such as Carlson, Intercontinental Hotels Group, Accor and America’s Best Franchising Inc.
A FICCI-Evaluserve study notes that the government should come out with 10-year tax rebate for new budget hotels. It observed that uncertain levels of taxation by various state governments have made foreign investors wary of investing in the country.
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