Radisson will Have 25 Hotels in Nepal by the Next Decade

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Radisson will Have 25 Hotels in Nepal by the Next Decade

Zubin Saxena, Managing Director and Vice President of Operations, South Asia of Radisson Hotel Group, was recently in Kathmandu to sign an agreement with Century Group for a new Radisson hotel in Biratnagar. Tamish Giri from New Business Age sat with Saxena to talk about the brand’s 24-year journey and expansion plan in Nepal. Excerpts:

Which brand of Radisson will Biratnagar have?
The Centurion Hotel group will have Radisson's 5-star property in Biratnagar. It is the same brand that Nepal currently has in Kathmandu. However, the hotel in Biratnagar will be the first property managed by the Radisson Group in Nepal.  

You chose a business hub over a tourist destination to start your new hotel in Nepal. Is there any strategic reason?
The hotel in Biratnagar is very opportunity based as we plan to continuously grow across all major locations in Nepal. The idea is to grow in markets and locations where there is a demand for high-quality international branded facilities, and many of these things happen to be opportunity-driven in Biratnagar, as well. We intend to have at least 25 hotels in Nepal in the next 10 years, and I think that can be very easily achieved. We want to have hotels in each of the seven provinces to achieve our number.  

How has been Radisson’s 24-year journey in Nepal?  
We have been here since the very beginning before anyone else. That should show the commitment we have to this market and how much we value and respect our owners here and our relationships with this country. We have a very long-term and successful association with the Radisson hotel in Kathmandu. So, our journey has been exceptionally good. We have renewed our association with this property in Kathmandu over the years after the initial term. I feel it has been a fulfilling journey so far. We have been able to establish ourselves as a high-level brand. We have been at the top of the table to establish ourselves as a facility which provides high-quality service. We have been able to put ourselves here and on the international map. Now is the time to step into the future and grow using the goodwill we have created and expand into the neighbourhood market.  

Why did you take so long to start the second hotel in Nepal?
A lot of these things are interlinked with how sometimes the economies grow and how sometimes the opportunities emerge. We had a second hotel in the pipeline in Pokhara. We were all set to take over the Grand Pokhara. Unfortunately, the COVID pandemic delayed it. We want to add more properties. But it has been a little slow in recent years. The most important thing is to be able to do the right development, not just the rapid expansion. The growth needs to be high quality as well. In India, we have 150 hotels and we are set to open almost one hotel every month for the next five years. Every hotel that is going to open is of extremely high quality. Sometimes it takes a little bit more time to have the right opportunities combined. But that is fine. What is more important is not to lower the quality of what you want and we are extremely proud.  

What do you think are the major operational challenges that hotel chains like Radisson face in Nepal?  
The operational challenges are quite similar compared to other countries. We are in the service industry and we always stick to high quality. To ensure that, getting a high-quality workforce and high-quality talent is extremely important. But getting a high-quality trained workforce is challenging everywhere. This is particularly also the challenge that we are facing in India now. Hotels are growing rapidly but are unable to find enough talented workforce. There is a lack of hotel management institutes. This is something that has impacted our industry and the airline industry after the COVID pandemic as most of the workforce has migrated into other industries and many of them do not want to come back. High-quality facilities also need to be run by high-quality people. It's a major challenge that the global hospitality industry is facing today.  

What needs to be done to overcome such challenges?  
We need to take a grassroot approach. We need to be able to place high-quality education institutions and hotel management institutions which can put out high-quality workforce. We need to have more of such institutes. One hotel room generates about 16 jobs directly and indirectly. You can imagine the impact it has. Some years ago, there were fewer big hotel projects in Nepal. But today, hotel projects are growing rapidly. Likewise, if you look at the supply of workforce in this market, it has multiplied but the talent pool has not. So we need to have all kinds of institutions which ensure that kind of talent grows at the same pace as the growth of the industry. Otherwise, we will not be able to have this lovely hotel serve our guests. This will mean that the quality of the overall destination at large will go down. People will then start thinking that hospitality is not a great sector to invest in. So, this is one of the key areas which are extremely important for the growth of the industry. The other thing, which I think is especially important for the industry to grow and the economy to grow, is to have a favourable credit line for financing the development of the hotel projects which require a huge capital.  

Did the property in Biratnagar have all the requirements to be a Radisson hotel?  
A world-class facility must have world-class planning. We did look at all those factors required in detail before we decided to sign up for this project.

How do you observe the Nepali market and what are your expansion plans?  
Nepal is an emerging market and has enormous potential. Over the next few years, we have significant expansion plans in Nepal. This is the market that we see as a natural extension of South Asia. We have defined India as part of the market for South Asia. South Asia for us also includes Nepal, Bhutan, and Sri Lanka. So, this market is a natural extension for us and has always remained. The economies are interlocked, the travel is very convenient, and the tourist visitation patterns are similar. To be honest, this is going to be an economy which will strengthen over the years and you can already see it. When the economy grows, there will be a lot of infrastructural growth. The tourism sector tends to be very linked to the economy of this country. It is, in fact, in many instances, a leading market indicator. Radisson is looking at Butwal, Lumbini, and Pokhara along with all the major areas across the seven provinces to expand its service. 

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