Tamil Nadu hospitality continues to attract French finesse

In an interview, Jean-Michel Cassé, COO, India and South Asia, AccorHotels, a French MNC, offers insights into his experiences in the global hospitality arena.

Our new property into Chennai in the 10th year of our operations finds us with a total of 53 hotels. Two more will get added by the year end, taking our total to 55, across 10 brands with an inventory of 10,000 rooms. Under development are 30 hotels, that will raise availability by 5,000 more rooms. If you compare us with legacy operators like Taj, Oberoi or Starwood post-acquisition by Marriott, we have done a commendable job. Our two brands in India – Novotel and ibis, have been successful. Accor has entered and exited India for many years without really cracking the market. Our Board then decided it is a place, where if you want to be successful, you must invest. So, our effort was to find the right partner to enter into a joint venture or else grow by management contracts by becoming more selective in some locations. 

We have 800 hotels in APAC, which contribute 25 per cent of the global revenues. In India, we constantly ask ourselves what the right size could be – 200 or 300 hotels. The market is very young. Despite the burgeoning of hotels, the inventory is 1.40 lakh rooms, not much compared to China, which, in the last 10 years, has an inventory in millions. Our goal is to grow and be in the top three. Globally, anyone investing in this industry, three years later after ramping up, should be at par and be able to get an occupancy of 70 to 75 per cent. Now we have good occupancy, but price remains an issue. However, considering the sheer size of the country, people and the dynamics, we are bullish about India. 

The challenges remain the same whether an MNC or a homegrown brand. In 2009, we had our ground-breaking ceremony here. But our project took 7 years to come up. Elsewhere, a combo project like this, would take 3 to 4 years. We do realise licensing is determined by politics, and TN has been facing exceptional challenges on that front. However, the state has been friendly to investors especially since the biggest French companies are based out of here – like Renault, Nissan, Capgemini, Saint Gobain and Michelin, which has its biggest plant outside of France here.

The main challenge is licensing and you must be prepared to go through a learning curve. For instance, Ibis in Pune, from conception to construction took only 2 years, a reflection of our learnings in this market.

The Supreme Court ruling on liquor sales near highway, strongly impacted our hotel in Sipcot industrial corridor. We could not benefit from the location. The Ibis Chennai City Centre came up in 2015 but, till now, we have not obtained liquor licenses for that and it will take six months. Our investment in Sipcot is massive as it was based on the anticipated development. Under this circumstance, we must sell off the Sipcot facility. But, we do realise that in India, it pays to be patient as things do get resolved. The liquor ban has been resolved – 90 per cent – unless of course you are outside the CBD. We have appealed to the CM to support us in that respect. 

It is amazing to work with Indians. We are a young company and our corporate office in Gurugram, like in Chennai, is made up of mostly millennials. The workers of this generation don’t want to be dictated. They want to be empowered. Being able to adapt to their expectations is imperative. Either you do that or disappear. I find myself in this new game and I am at ease and have started to enjoy myself. 

In terms of leadership, the learning here is you cannot lead the same way as you would in other countries. You cannot deal with a person here as you would elsewhere as the expectation is different. Here, being recognised as a responsible person matters and India allows you to do that. For instance, one of our airline partners Indigo employs women, with the average age between 25 and 26 years.

Only the lady in-charge of cabin may be 26 years; anywhere else in the world – or in the UK, you would have to be 55 years old to attain that position. No one at such a young age is empowered there like in India. Look at the pilots here – they may be 30 years old. There’s not a single country in the world, where you will be given that kind of responsibility.