When India’s economy opened itself to the rest of the world in the early 1990s, the middle class was exposed, possibly for the first time, to job opportunities beyond the ones offered by the government. This meant a sudden surge in travel and consequently a need for quality affordable accommodation. The gap between demand and supply was so massive that the rates and occupancies in most tier I markets hit stratospheric levels. We recognized this gap in the industry and formed a strategic joint venture with Accor - one of the largest hotel operators in the world, with heaps of operational experience in the mid-market space. Together, the JV introduced ibis brand in India, and today collectively owns and operates 18 ibis Hotels across the country.
InterGlobe Hotels today has one of the most significant investments in the mid-market space in hospitality in the country. From the time the first hotel opened in Gurgaon in late 2008, the company has been growing at a scorching pace both in terms of inventory as well as revenue. In the last 5 years, more than 1,900 keys have been added to the brand taking the number to 3,308 at a growth rate of 31% CAGR. During the same time, the pan India hospitality performance was slow; occupancy rose by meagre 6% points and the rate remained steady. IGH outpaced the market with a revenue CAGR of 26%.
With another 5 hotels under development, the room inventory will increase to c. 4,500 rooms by 2024. This would mean IGH will have an ability to serve c. 1.5 million guests every year. The growth story will also continue through further acquisitions both with greenfield and brownfield routes, keeping IGH in the pole position when it comes to investments in the hospitality space in India.