US moderate-tier hotel brand Fairfield makes first Asia entry via India

Known as an established leader in the moderate tier segment in the US, the Fairfield brand offers guests more affordable prices than hotels in the premium tier.

Considered a growth engine for the brand's expansion, the Asia market will see 12 hotels signed in a financial joint venture with hotel investment firm SAMHI in India and additional properties in Nepal and Indonesia.

Marriott International already offers eight hotel brands in the Asia Pacific, including The Ritz Carlton, JW Marriot, Marriott Hotels & Resorts, Renaissance Hotels, Courtyard by Marriot, and Marriott Executive Apartments. Within India, the company is understood to have about a market share of 8-10 per cent in the hospitality industry.

Don Cleary, Marriott International's COO in Asia, said, "The timing is right and the market is primed for a brand like Fairfield, as we see millions more people entering the middle classes across India and Asia."

Why Bangalore instead of New Delhi? "It has a voluminous middle class, and right now is the golden time of travelling for India's middle class," Cleary said.

The Fairfield product represents an entry price point into the Marriott portfolio for transient business travellers that full-service brands cannot deliver, Cleary commented. The core target audience is younger, middle-management types within the domestic, "purpose-driven" travel market.

Shruti Gandhi Buckley, vice president of global brand management, for Fairfield Inn & Suites, revealed that the brand will be reaching out to value-seeking Indian business travellers via social media, room displays at the main airports in India, and Fairfield-branded food trucks in prime office locations.

Sharmila Nicollet, a prominent Indian golfer who was the youngest to qualify with a full tour card for the Ladies European Tour in 2012, has also been appointed as the Fairfield brand ambassador.

Fairfield fills a "much-needed" gap in the mid-scale economy tier, explained Buckley to Campaign Asia-Pacific, with more functional amenities that is "the sweet spot" between either really basic accomodation or overly luxurious lodging in India.

Despite the IMF's growth rate projection of 3.8 per cent for India this year, both the Indian finance minister P Chidambaram and SAMHI MD & CEO Ashish Jakhanwala dismissed the impact of the country's downturn.

Chidambaram said India's economy will grow at over 5 per cent in 2013-14; while Jakhanwala said even if business-people cut back on spending, the moderate-tier segment will still benefit from essential business travel.

"Also, demand is impossible to measure in India. There is latent versus induced demand, and the latter means 'if we build it, they will come'," added Jakhanwala. "Opportunities do not disappear with one slow economic cycle".

For over a year, Fairfield conducted research in India to better understand guests' preferences. The Bengaluru product is the direct result of the research—mainly uncomplicated features in its 148 rooms as well as food and beverage offerings.

For example, guests normally "live out of their suitcases for the one or two nights they stay", making large luggage storage and other fancy facilities redundant, Buckley told Campaign Asia-Pacific.

SAMHI's land acquisition strategy taking advantage of corrected asset values has seen it helping Marriott acquire a partially-completed building in Bangalore "in an opportunistic development atmosphere", which after fit-outs is now India's (and Asia's) first Fairfield operation.

As part of its partnership with Marriott, SAMHI is developing another three Fairfield properties in other Indian cities with a population of at least one million, such as Mumbai. Introduced in 1987, the Fairfield brand already has more than 715 properties throughout the US, Canada and Mexico.