Ascott loves blazing a trail in India

Ascott loves blazing a trail in India

The global serviced residence giant sees huge potential, with business travellers clamouring for home-like comfort and services, reports CHUANG PECK MING

 

WHAT the Singapore- based Ascott Group has to offer India is likened to ‘adding ciabatta and focaccia to a selection of pratas and naans to cater to different tastes and preferences’, says Gerald Lee, its deputy chief executive for operations.

 

‘We bring something that works in the Indian market, and up the standard and choice of accommodation offering,’ Mr Lee says.

 

Coming from an official of one of the world’s largest international serviced residence owner-operators, his words can be taken seriously. After all, the group offers three brands – Ascott, Somerset and Citadines – in 56 cities in 22 countries.

 

Ascott became a global player only in 2001, when it got listed on the Singapore Exchange. Since then, it has expanded into a business with a total of 5,000 employees and 21,000 serviced apartments in 158 buildings in key cities across Asia-Pacific, Europe and the Gulf region. Revenues swelled from $232 million in 2002 to $435 million last year. Net profits jumped from $18 million in 2003 to $177 million in 2007.

 

The group moved into India in August 2006 when it inked a joint-venture (JV) agreement with the Rattha Group to acquire and develop seven serviced residences with a total of at least 1,000 units in the country by 2010. Total investment is estimated to be 10 billion rupees (S$320 million).

 

Ascott has already unveiled six residences with 1,398 units in Ahmedabad, Bangalore, Chennai and Hyderabad. ‘These are all currently under development – the first, a Somerset property, is expected to open in Chennai later this year,’ Mr Lee says.

 

Economic powerhouse

 

Ascott’s Indian partner is in the businesses of exports, infrastructure development and leasing. ‘Rattha has strong networks, deep local knowledge and sizeable land banks in strategic locations,’ Mr Lee says. ‘They complement Ascott’s expertise in managing and owning serviced residences.’

 

What drew Ascott to India? ‘There’s a lot going for India, one of the two economic powerhouses in Asia,’ he says. ‘Foreign direct investment (FDI) in the country is increasing and more multinational corporations are either setting up shop or expanding their presence there.’ At the same time, India’s gateway and second-tier cities are seeing more business travellers, resulting in a rising demand for quality accommodation for extended stay. ‘We are geared towards providing business travellers with home-like comfort, space and wide-ranging services that they will look out for and appreciate after a long day at work in a foreign country.’

 

Given the shortage of quality accommodation in India, he says there is much room for Ascott to expand. But while India is rolling out the welcome mat to foreign investors, Mr Lee says operating a business in the huge country still steeped in many of the old ways is a challenge. ‘Often, there are no proper or clear-cut processes,’ he says. ‘In a highly competitive environment, you either run with the locals, or sit and wait for the permits to be approved.’

 

The problem, Mr Lee says, is how to get the balance right in terms of time-to-market – getting the products out into the shops – while waiting for the regulatory clearance, which may take longer than expected.

 

‘It’s an adrenaline rush juggling both,’ Mr Lee says. ‘You have to be mindful of regulatory and legal restrictions while keeping a close watch on your competitor’s moves – and getting your product out into the market quickly.’

 

India‘s creaking infrastructure is also a pain for Ascott. But the group also sees opportunity in this drawback. ‘Being the first to go into certain cities in India, we play a part in helping to put the right and necessary infrastructure in place,’ Mr Lee says. ‘It may be frustrating at times, but if you look at it from another perspective, we are actually a pioneer or trailblazer of sorts.’

 

Looking ahead, Mr Lee sees a more exciting time for India’s hospitality and travel industry – and for Ascott, too.

 

Source: Business Times

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