TD Conversations: JB Singh, President & CEO, InterGlobe Hotels

We talk to him about what the hospitality industry must do to recoup at this time, the evolving needs of the young traveller, how the ‘smart economy’ Ibis brand is evolving to meet these, and a hint at an exciting development on the horizon…

At the helm of one of India’s leading hotel development companies, JB Singh, President & CEO, InterGlobe Hotels (IGH), is in pole position to understand the ever-changing dynamics of the hospitality sector. IGH, with a dedicated investment of more than Rs 2,700 crore, has allied with Accor Asia Pacific since 2004 to build Ibis hotels across India, Nepal, Sri Lanka, and Bangladesh, serving more than six million customers through 18 operational hotels across 13 cities. He sheds light on his cautious-but-confident approach to investment, trends in the mid-market segment and IGH’s start-up-rich, forward-facing stance. Excerpts from the interview…

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JB Singh, President & CEO, InterGlobe Hotels. Image: Courtesy InterGlobe Hotels.

I’d like to know your views on where the industry is moving, post-pandemic. Your company’s been increasing capacity. You’ve said that you plan to expand to 23 hotels, with an inventory of at least 4,500 keys by 2024. So, obviously the prospect is positive, but what gives you the kind of confidence to say that?

When you look at these things, you look at it near term, medium term, long term… that’s the way we approach it. And we have great belief in the long-term opportunities in India. It’s going to get more structured, more compliant, it’s going to have more consumption per capita, GDP will grow from three per cent, etc.

And that confidence is reflected in most of our businesses, whether it’s in the airline business or the aircraft simulator business or any of the others, including hospitality. That’s a broad, 60,000-foot view. We’ve been in this game for a while, we approach things in a very structured way. We have learned a lot. We like to keep our business sustainable and scalable.

In this business, you have to be very careful how you invest, what you invest, where you invest, how much you invest, and map it with what returns you get. We’ve understood that and we’re getting more and more efficient in the last five-six years. We did take a little bit of a halt in the last one year financially, but we didn’t stop finishing whatever we had committed to, so that continues. We opened Vikhroli, we are going to open Bengaluru Hebbal and City Centre, Thane, Goa Vagator, and another one in Mumbai at Kalina, all that is running on track.

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The new ‘smart economy’ model is design-led and future facing. Image: Courtesy InterGlobe Hotels.

What, according to you, does the hospitality industry need to do to recoup right now?

The fundamentals are good. Times are going to be equally complex going forward at least in the near-medium term. It’s a good time for us, as an industry, to reassess how we run our businesses. We’ve done a lot of introspection, and we continue to do more, on how the new demographic is going to behave. It’s critical how we manage our people, the leadership agenda, how much diversity we bring in.

We are clearly in a digital economy. Are we ready for that? I don’t think so. In pockets people have done a great job but we have no idea where our data is, and we have no way to dissect that data over the years. Customer experiences are important, younger people want to consume products in a very different way. A more targeted approach is needed.

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Younger people want to consume products in a very different way. Image: Courtesy InterGlobe Hotels.

Having said all of that, India is a large market, 1.3 billion people and growing. From the influx of tourism, inbound will grow, regional will grow, which means it’s reasonable to say that there will be enough takers for different levels of products. If it were a small market, I can say okay, man, you got to be careful. But here, the challenge will be where do you want to play, how do you make it cost efficient, how do you make it absolutely right in terms of structure, investments, and everything so you can extract better returns for stakeholders.

India has always been underserved traditionally and we need to have more capacity but a lot of the hotel chains including international ones are now recognising your mid-market segment. How do you feel about the fact that there are so many players coming into the same sector?

That had to happen. When you look at it from an operator point of view, they will go with more with properties that will drive big volume at a lesser manpower, so their return becomes more efficient. When you go into an investment cycle, then that becomes a debate on whether you want to create multiple boxes which are efficient, the return on investment is more sustainable over a long period of time, so the operator follows the operator model.

We as investors/operators, follow both the models. But this is a big gap because people have not invested but now that we’ve made it a success (and so have others), I think that there are eyeballs. But, provided they can deliver that level of quality even at the mid-level. India needs quality infrastructure, especially in this category.

Jb singh, ibis, igh, interglobe hotels
India needs quality infrastructure, especially in this category. Image: Courtesy InterGlobe Hotels.

The consumers are much more aware, even the economy segment is now well travelled. What trends have you identified in this sector? Do you have big data on the current needs of the market?

Industry data is not that great and our ability to mine data has to improve. But when we look at trends, clearly the consumers are looking for more experiences, so products that are coming now, we may be considering some of those, also looking for a more lifestyle model. We started working on this four-five years ago and if you’ve seen Vikhroli, we have moved into that space. Our public areas have a lounge feel, libraries, community tables… All our refurb programmes are also tilting in that direction, Jaipur for example.

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Our public areas have a lounge feel, libraries, community tables. Image: Courtesy InterGlobe Hotels.

And then, of course, I think the younger customer aligns to different art and aesthetics. They align to music, which is why we have the Ibis music brand there. You can walk into our lifts and QR code and download a Spotify playlist curated by some of the top names in the world. Not just engage the customer but also show them other sides to music and art. Our next hotel will have some very interesting art from emerging artists.

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The younger customer aligns to different art and aesthetics. Image: Courtesy InterGlobe Hotels.

What’s the way ahead now? Of course, you’re expanding in terms of properties but what about within the properties… apart from art and music, do you have big picture plan?

We have to look at what else we can do with our spaces, from a revenue perspective and from an engagement perspective. Another thing we constantly encourage is giving start-ups a sandbox environment to test products. We were one of the first companies to put in an EV charging station, we are working with an energy efficiency one, etc. Over time, we have a big programme running on sustainability where all our buildings are being reset to LEEDS Gold. We are also doing extensive solar fit outs across all properties.

Just for the sustainability angle what kind of investment are you making?

I don’t have a number, but it would definitely bump up costs by about six per cent. We have already been evaluating this for a while now. In fact, Accor has a mandate worldwide top remove plastic from all the customer touchpoints by the end of this year.

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Clearly, the consumers are looking for more experiences. Image: Courtesy InterGlobe Hotels.

Any brands other than Ibis, in the pipeline?

We have one which we are thinking of, which is halfway through construction. This one is going to be kind of a luxe one, though we certainly will not go into, say, a heritage classic brand anytime in the immediate future! We will decide on this in the next two-three months. We are responding to how the market is moving. It may be one of the existing brands repurposed to create an experience that is different.

Will this one also be affiliated with Accor?

Yes, we are deeply embedded with Accor. We have learnt a lot from each other, and it has been a great relationship.

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‘We encourage start-ups by providing a sandbox environment to test products,’ says JB Singh. Image: Courtesy InterGlobe Hotels.

How did it come about?

The owners were wanting to get into hospitality. We went about it in a structured way, identifying one of the big gaps and how they would play out in the next 30-40 years and that’s where this whole thinking came that we needed to get into this spot. Then we went to the best operator that specialised in this space and that was Accor, simple as that. It took a good 2.5 to three years to get to that spot. Most of the businesses we do, we like to think through clearly exactly where you want to get with it and then you just keep doing it until you perfect it.

What’s your personal business philosophy and leadership style?

I’m pretty hands off. I think we are just custodians. Our job is to give direction, be the referee, make sure you foster the right culture which makes the organisation efficient. This culture is the bedrock at InterGlobe Hotels.

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