India's hotels are in danger of being submerged by a deluge of international brands, some of which are setting up hundreds of hotels under management contracts without investing even a rupee in the country, says Leela group patriarch CaptCPKrishnanNair.
"This is another form of indirect colonisation by foreigners. Foreign chains should have a stake in properties they develop, like they had to earlier," says the 92-year-old, who sees the growth of international brands as a poser for Indians hotel brands such as Taj, Oberoi and ITCBSE 0.64 %.
His answer to this new competition is going the asset light way. The company recently decided to manage hotels rather than just build properties on its own. Even in the properties it is building, it is bringing in joint venture partners. "We must get a good return on investment now. Unless we get it, we cannot put up more heavy investments without resorting to loans. We have a considerable amount of loan already and we have to reduce it drastically, which we are doing," says Nair.