Jumeirah faces setbacks in India expansion plans

(Mumbai)

Dubai’s Jumeirah Group is reportedly in talks to open hotels throughout India, its next key market for expansion.

"We are in discussions with a number of owners and developers about opportunities right across India, including Mumbai, Goa, Bengaluru and New Delhi," Linda Lewis, Jumeirah Group’s VP of global sales, Middle East and Asia Pacific, told The National. 

Jumeirah already has one property under development in Mumbai, having signed a deal in November 2012 to operate a 470-guestroom hotel that was scheduled to open this year. Progress on that project has been "slower than expected," however, and while Jumeirah said that the property was "still in development," it did not have a new opening date.

India's Appeal

Since India has relatively few luxury branded hotel rooms per capita, global operators are eager to gain a foothold. Economic constraints have reduced the country's pipeline over the last few years, however, and Abhijeet Umathe, associate director of hospitality and leisure advisory at Knight Frank India, suggested that Jumeirah may have been held back in its India plans due to the brand's "positioning" at the luxury end of the market

"In the cities in India where Jumeirah wants to be present, the real estate costs are extremely high, so if you have to build over a very large average build size per room, the return is not there for the owner," Umathe said. 

As such, most of the expansion in India’s hotel market is focused on the midscale to upscale segments.

In spite of these setbacks, Jumeirah is still keeping its eye on India. This week, the company announced that it had opened a representative sales offices in India to target the luxury travel market for its existing hotels.