November 11, 2010 / 6:38 AM / 8 years ago

Marriott to expand India portfolio to 100 hotels

MUMBAI (Reuters) - Marriott International IncMAR.N, the largest U.S. hotel chain, on Thursday said it aims to expand its hotel portfolio to 100 hotels in India over five years, as it chases growth in emerging markets.

A view of the Marriott Shanghai Hongqiao hotel May 26, 2010. Marriott International Inc, the largest U.S. hotel chain, on Thursday said it aims to expand its hotel portfolio to 100 hotels in India over five years, as it chases growth in emerging markets. REUTERS/Aly Song

Marriott, which currently operates 11 properties in India, is looking to expand mainly through management partnerships with local hotel developers, President Arne Sorenson said.

The expansion is part of a broader plan to add over 600 hotel properties by 2015, taking its overall global tally to more than 4,000 hotels. The bulk of the additions will be in the emerging markets of China, India and southeast Asia.

“India is a growing economy and we expect demand to grow,” Sorenson told reporters in Mumbai.

“It has the second-largest hotel development pipeline in Asia, and is expected to double the number of branded hotel rooms over the next three years to about 120,000 rooms.”

International hotel chains including InterContinental Hotels, Starwood and Accor SA are still recovering from the effects of the global downturn that put a chill on travel for two years and are boosting operations in fast-growing economies like China, and now, India.

In May, Marriott said it aimed to double the number of Marriott brand hotels in China within five years.

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Marriott will add properties across seven brands in India including the premium Ritz-Carlton and moderate-priced Fairfield Inn, and said the expansion will create over 8,000 new jobs in India in the next three years.

“What Marriott provides is management expertise. So far, we have got tremendous real estate partners,” Sorenson said. “I suspect as we move forward, we may take some equity stake, but I expect most of this to be locally-driven.”

Marriott has not made any significant investment in its India portfolio yet, he said.

The hotel operator will add many more properties in secondary Indian cities, Sorenson said, adding that land acquisition issues are a major reason that a global hotel chain like Marriott has had to team up heavily with local partners.

India also has a longer gestation period for hotel properties and rising labour costs across the industry were a cause for concern, said Rajeev Menon, area vice president for India, Pakistan, the Maldives and Malaysia.

The company recently signed management agreements for seven new hotels in India, including five moderate-priced Courtyard hotels, one for the upscale Marriott hotel in Jaipur and another for the lifestyle Renaissance property in Raipur.

Sorenson said he expected Marriott could also add dozens of Fairfield hotels.

Writing by Prashant Mehra ; Editing by Bryson Hull

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