“It’s really something, isn’t it?”
Simon Barlow is gazing out the car window, an amused grin on his face as he watches the flurry of cars and motorcycles and passerbyers zip frenetically across multiple lanes of traffic on India’s National Highway 8. The president of the Asia/Pacific region for the Carlson Rezidor Hotel Group is immune to the vehicular chaos unfolding around him. He’s as cool as a cat sleeping in the shadows.
Until a motorbike carrying a family of three passes within inches of his door.
“It does take one or two visits to get used to,” Barlow chuckles amid a symphony of honking horns.
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Simon Barlow Carlson Rezidor Hotel Group |
The president has had plenty of opportunities to acclimate to India’s unorthodox driving culture since signing on with Carlson in December 2010. During the two-plus years that have followed, he’s ventured over from his home office in Singapore more times than he can count. Such is the nature of the gig—especially when that gig includes overseeing one of the largest Indian portfolios of any global hotel chain.
Carlson boasts 63 hotels in a country where the total room count is less than that of New York. Barlow attributes that foothold to experience; Carlson has been in India longer than anyone, except maybe competitor Starwood Hotels & Resorts Worldwide, although the exact entry date is too close to call.
“Because we have such a strong and well-established local management team, we get things done. … We understand our customer, we understand the development community and we understand what it takes to get things done,” he says.
There’s been a lot more to get done in recent years. As India’s government ramps up infrastructure spending and the country’s middle class continues to grow, more travelers are hitting the road, which means more hotel rooms are needed to accommodate them.
Carlson executives are eyeing their share of the pie. The company has 44 hotels in the pipeline, the majority of which are Country Inns & Suites (14) and Radisson Blu (10).
But it hasn’t been easy, Barlow says as the car takes a dip down a highway exit ramp into a bottlenecked intersection. As it crawls slowly into the mass of motorized metal, other vehicles slowly flood around it, inching here and there, a crowded Tetris board of cars and motorbikes facing this way and that.
Barlow glances back to the journalist to his left. This, he says with a nonchalant shrug at the gridlock around him, is India.
Roadblocks
Barlow is sitting in a mock-up lobby of a new Park Inn by Radisson. Between bites of lunch, he’s tag-teaming a crash course on the history of India’s modern hotel industry with K.B. Kachru, Carlson’s executive VP of South Asia.
The space is surprisingly airy, considering it—and the two mock-up guestrooms in the adjacent space—are squeezed within a massive office complex owned by Indian real estate company Bestech Group.
The building, Barlow says, is a shining example of the country’s development boom—the type of immense, towering projects that were nonexistent a decade ago. Now the national highway is littered with these sentinels, each emblazoned with a different corporate logo announcing the presence of yet another conglomerate to the scene.
They’ve sprouted up with such speed that a passing observer might conclude it’s easy to build in India. That assessment couldn’t be any further from the truth.
“India is a difficult place to develop anything,” Barlow says.
The dichotomy between the rampant development churning in every major city and the debilitating red tape that accompanies it is almost impossible to believe, he says.
“It’s somewhere between 120 and 150 licenses to get hotels open. It’s about government regulations restricting the amount of built-up space on a land you’re allowed to build.”
Other roadblocks include, well, roadblocks. India’s infrastructure has come a long way, but “there’s so much more that needs to be done,” Barlow says. For every paved highway exists a dirt road that can at times be impenetrable.
The sewage systems also can be somewhat lacking, if they’re even present. And power outages are still the norm in many cities.
Then there’s the corruption. Though not a widely documented part of the business landscape, bribes are common and require a certain flexibility to circumvent, Barlow says.
It all makes for a cluttered minefield, fraught with risk and many casualties. There’s a reason so many other hotel companies have retreated from India after unsuccessful attempts to penetrate the market, he says.
Success here comes down to experience. Typically, the experience comes from a local partner—a seasoned guide to chart a path of least resistance. Carlson has worked with a few of them during the past several decades. There’s a reason Bestech houses the Park Inn mock-up, for example; the real estate giant is one of Carlson’s most recent strategic partners in the region.
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K.B. Kachru Carlson Rezidor Hotel Group |
The two companies signed an alliance in April 2012 to develop a network of 49 Park Inn hotels in north and central India by 2024. Under the agreement, Carlson and Bestech will invest $42 million in a joint venture to develop the first two hotels: Park Inn by Radisson Gurgaon Sector 88 and Park Inn by Radisson Chandigarh, Mohali.
“If you have experienced partners who know how to follow the process and the systems, they will be useful. We have been very fortunate that we have been working with very experienced developers who are big and who have huge organizations to process all these things,” Kachru says.
But it takes more than a good partner. It also takes guts, Barlow adds.
In America, hotel investors might hesitate to pull the trigger until every “I” has been dotted and every “T” has been crossed. In India, however, you have to dive in without knowing the depth of the water.
“Sometimes you’ve got to have faith in the people who are doing it and that the outcome that’s expected has a high probability of coming off,” Barlow says. “We’re not in an environment that is so black and white as the West. It is a challenge for any international company that is here. Sometimes you have to take a leap of faith.”
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| The recently renovated Radisson Blu Plaza Delhi is the Carlson Rezidor Hotel Group’s flagship property in New Delhi. |
Monetizing the middle class
Barlow’s current leap finds him immersed in Park Inn by Radisson. Though the upper-midscale brand boasts a 26-year track record of success in Europe, it’s a somewhat unproven commodity in India. There are only three Park Inns under operation at present.
But Barlow is confident. Very confident. When he tells you Park Inn is the future of India, it’s not opinion; it’s fact.
The brand, he says, is perfectly poised to ride the momentum of the country’s emerging middle class. There will be more than 500 million of them by 2025, he says, and India’s hotel market lacks a strong midscale player to meet their needs.
“Clearly we see the growth in opportunity for new hotels on the back of growing middle class wealth and growing infrastructure spending by government in India,” he says. “I’m excited about Park Inn as a brand for India.”
Investors seem to share his enthusiasm. There are 10 Park Inns in the pipeline. And more announcements are on the way, Barlow says.
They react well to the brand’s offerings, he says during a tour of the mock-up guestrooms, which feature rich wood floors, accents of deep red sprawled on furniture and the ceiling, and clean and clutter-free bathrooms. The familiar Park Inn DNA is strongly represented, but it’s the thoughtful adaptations that will truly make a difference in India, Barlow says.
The loveseats pull out into beds to accommodate family travelers, for example. And for business travelers sharing the same room key, certain layouts offer two twin beds and a separate shower area and a commode.
The result is an attractive, functional space that arrives to fill the next phase of India’s hotel industry cycle, Barlow says.
“You go from high net-worth individuals who want trophy hotel assets, which means the formative growth in the country is all about luxury and 5-star hotels. We’ve come out of that phase very clear,” he says back in the mock-up lobby.
“Developers are becoming much more savvy about the need to have a solid investment case before they put the first brick in the soil. That’s an evolution,” he adds. “We’re starting to see signs that the savvy owner and developers are taking a more institutional approach.”
The way forward
Lunch has been cleared, and Barlow is eager to depart the mock-up Park Inn to begin a busy afternoon of meetings. These trips are always a bit hectic, he says, but the frenetic pace gives him energy.
When others visit emerging countries like India, they might only see the dirt and rampant poverty and congested metropolitans. But Barlow sees potential. He sees a thriving economy driven by a hospitable people with one of the most fascinating, welcoming cultures in the world, he says.
His optimism mirrors that of Carlson’s executive team, Barlow says.
“We can afford to take maybe a more of a long-term view than some of our competitors. … We don’t need to go out and buy 60 or 100 hotels. We can build our business here in India in a more progressive way that continues to build wealth for the shareholders of Carlson generation to generation.
“Despite those things … we still continue to open more hotels than our competitors—31 in the last two years. I personally put that down wholly to the fact that we have such a competent, long-standing Indian management platform in place,” he says.
Challenges may abound, but Barlow is too busy pondering the possibilities to let them slow him down.
“The equation of large population, increasing government spending in infrastructure, spread of wealth across the demographics of India and a very young population … these are all factors which stimulate hotel growth or travel and tourism growth.
“Put all of those factors together and that’s why India is such a compelling proposition.”
Editor’s note: The Carlson Rezidor Hotel Group provided hotel accommodation and incidentals to the reporter during a two-day tour of the group’s properties in India. Complete editorial control was at the discretion of the HotelNewsNow.com editorial team; the Carlson Rezidor Hotel Group had no influence on the coverage provided.