Rotana Hotels set for major expansion into India

Rotana Hotels is aiming to break into the Indian market with ambitious plans to have 20 hotels in the country within the next decade.

The Abu Dhabi operator hopes to secure its first hotel projects in India this year as part of its plans for an expansion across the South Asian country, as it looks to grow beyond the Middle East and North Africa.

"We're in the process of registering an office that is exclusively going to look at hotel management opportunities in the Indian subcontinent," said Selim El Zyr, the president and chief executive of Rotana Hotels.

The operator is setting up its office in Gurgaon, a satellite city of New Delhi, with the legal formalities expected to be completed within the next month.

The move is part of Rotana's plans this year to expand outside the Middle East and North Africa, and it is also studying opportunities to open hotels in Africa, Central Europe, Turkey and Iran, Mr El Zyr said. But its move into India is at the most advanced stage.

"We have decided to go to India because, number one, we have to continue our expansion programme and, number two, it has great potential," Mr El Zyr said.

India has a burgeoning travel market. With a population of more than 1.2 billion, millions of people travel within the country. At the same time, international tourist arrivals in the country are growing. Major international operators including Marriott and Hyatt are expanding in the country. India's GDP is expected to grow by 7 per cent this year, according to figures from the IMF.

"India's market is not only a great opportunity to manage hotels; it is very important for outbound travel," said Mr El Zyr. "And we can attract a lot of visitors to India because of our presence in the Middle East."

The operator already has outbound sales offices in Delhi and Mumbai to tap this market.

The number of people travelling out of India is expected to reach 50 million by 2020, according to the UN World Tourism Organization.

Rotana, which is already in discussions with many developers, is hoping to sign one of two management agreements in India this year, Mr El Zyr said. It is then likely to take a couple of years to build and open those hotels.

The operator wants to be in primary, secondary and tertiary cities in India, with all of its brands under consideration. Those range from budget three-star to luxury five-star hotels.

Several of Rotana's properties in the UAE have been delayed, while projects planned for Syria and Libya have been put on hold amid instability in those countries. But it is still pushing ahead with plans to expand outside the region.

"It is a natural growth path," said Chiheb ben Mahmoud, the head of hotel advisory, Middle East and Africa, at Jones Lang LaSalle Hotels.

"India, as a travel destination and as a hotel services potential, represents a strong proposition with important business and synergy potential," Mr ben Mahmoud said. "India is an important guest feeder market for UAE hotels, and the opportunities are important both in terms of leisure and business hotels."

Rotana was in a strong position to start moving outside its home base, Mr ben Mahmoud said. "Rotana Hotels & Resorts has achieved sufficient recognition at home that allows it to enter new markets such as India."

The company has already appointed a head of development at the office, who will lead the Indian expansion plan.

The estimated investment for the company before it was likely to see revenue in from India was Dh10 million (US$2.7m) to Dh15m, including setting up the office and paying salaries for about the next three years, Mr El Zyr said.

"Going into a new country is an investment, and we are willing to take the risk," he said. "We have evaluated and assessed the potential and the risk."

rbundhun@thenational.ae

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