Ascott Ltd envisages delay in India expansion plan due to pandemic

Singapore-based Ascott Ltd, provider of serviced residences, expects its proposed expansion plans in India would be impacted due to the coronavirus outbreak besides impending monsoon, according to a company official.

The COVID-19 lockdown has also impacted short-stay and groups segment while people also cancelled their travel plans, the official said. The company has serviced residences and hotels in over 30 countries, including India.

"Our current project pipeline is experiencing delays in construction activity since labour and project teams have been demobilised and will further be impacted due to impending monsoon in parts of the country", company Regional General Manager, Middle East, Africa, Turkey and India, Vincent Miccolis told PTI.

Ascott has about 70,000 operating units and over 44,000 units under development in over 700 properties. To a query, he said, the company's existing projects were under development.

"Ascott Ireo City Gurugram and Citadines Paras Square Gurugram are stated to open later this year, while Citadines Calangute Goa and Citadines Candolim Goa are set to open in 2021 and 2022 respectively", he said.

On those challenges faced during the on-going lock-down, he said it impacted short-stay and groups segment while some people cancelled their travel plans. "From March till May 2020, over 3,100 room nights have been cancelled at both our properties in Chennai," he said.

The company manages 187 unit Somerset Greenways Chennai and 269 unit Citadines OMR Chennai and witnessed an average occupancy rate of 45 per cent. He said about one-third of operational staff at 'each' property had been working round-the-clock to ensure well-being of the guests. To a query whether there was any salary cut effected, he said, the company's global policy in challenging times was to continue initiatives of cost cutting on all fronts before being obligated to consider employee pay cuts.

"Staff efficiencies are higher in a serviced residence with staff to room ratio of 0.45:1 compared to hotels, hence the burden of payroll costs on the overall GOP is far lesser. We are focusing on optimising payroll costs by compromising on other indirect benefits," he said.

"Our teams of senior managers have been working round- the-clock to ensure that our staff are supported and feel motivated during this time", he said. On infusing capital, he said the company's expansion model was through 'management agreements' where the company undertakes operational responsibilities of assets built by Indian developers and private investors. "We will continue the same momentum for now", he said.

For the Indian sub-continent, the focus was to grow footprint through management contracts in tier I and II cities. As the real estate picks up steam, many hotel owners would be more inclined towards sustainable business models like 'ours', he said. On opportunities available to drive business growth, he said, when the lock-down is eased, the domestic market is likely to open first for business.

"Keeping these factors in mind, we have mediated a back- to-business strategy for our corporates, relocation companies and extended stay segment," Miccolis said.

"We expect to adapt to the changing times by implementing safety check points within our properties to make sure that our guests and employees feel safe and welcome." He said with some hotels shutting down operations 'temporarily' while others 'permanently', developers were witnessing first-hand sustainability in service residences model.

"We envisage possible conversions of existing hotels and serviced residences, or for new developments in select markets", he said. Ascott has a portfolio of seven properties across four cities with more than 1,200 units in the country.