Building a hotel in India harder than anywhere else, says Marriott

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Scarce land availability and high cost of capital make India a harder country to build a hotel in than anywhere in the world, said a top executive of an international hotel chain.

“Sourcing land is extremely difficult in India and a bigger hurdle in building a hotel than anywhere in the world,” American hospitality major Marriott International’s President and Managing Director for Asia Pacific Craig S. Smith told IANS in an interview.

Though Smith is optimistic about Marriott’s future in India, whose economy is growing faster than China’s, the high cost of capital and expensive loans with hefty interest rates also make India a difficult place to invest in the hospitality industry, he said.

“There are a plethora of licences to obtain and regulatory laws to comply with, which differ in each of the Indian states, which makes building hotels even harder in the Indian subcontinent,” red flagged the company’s South Asia Vice President Neeraj Govil in an interview on the margins of unveiling Marriott’s new hotel in this tech hub, its 100th in India.

In China, Marriott manages a total of 300 hotels, thanks to access to cheaper capital than in India.

The 91-year-old hotel chain, headquartered in Bethesda in Maryland on the US East Coast, operates about 6,500 hotels across 127 countries, including 4,500 across the US and around 100 each in Canada and Britain.

India stands among the top five countries for Marriott in terms of the number of hotels and rooms, along with the US, China, Canada and Britain. While a hotel in Japan with over 300 rooms can be built within six months to two years, this takes at least five to seven years in India, Smith stated.

“Slowing down of permits makes the process of building a hotel longer in India,” he noted.

Contrary to the assumption that hotel licensing is controlled by the central government, Marriott found the hard way that it is issued by the respective state governments across the country.

“We have seen some progress over the years on licensing issues after we represented to the government the need for streamlining its process for hotels,” Govil recalled.

Of the 100 hotels Marriott operates in India under 15 various brands like Aloft, Courtyard by Marriott, Westin, Le Meridien, Sheraton, St. Regis and Ritz Carlton, among others, 40 are business hotels while the other 60 are upscale and luxury ones.

Employing over 30,000 people in India across 34 cities like Delhi, Bengaluru, Mumbai, Chennai, Gurugram, Hyderabad, Chandigarh and Bhopal, among others, Marriott said it will hire another 3,000 people this year as it plans to widen its presence in Indian cities and towns.

With improved road and airport connectivity in India over the years, the hotel chain has observed travellers from world over wanting to explore India beyond its cities.

“We are looking at Tier-II and Tier-III cities and towns for expansion and will soon have new properties in Ahmedabad, Jaipur and in Kerala,” Govil said.

The hotel chain has 50 projects in the pipeline for India to be completed within the next three years. The company hopes to open its next 100 hotels in the country by 2023.

Marriott, which operates in India through an “asset-light” strategy, where the property and the hotel building are owned by a private individual or a group and is only managed by the hospitality group, however, did not disclose the financial details of its operations in India, such as investments made so far, revenue earned and if it achieved its break-even point.

Admitting that the country’s high-value currency note ban on November 8, 2016, hit their business along with the industry, Govil said the effect of demonetisation has started to wane.

“I think the cash is back in the system. But it certainly took the whole industry a while to get used to the Goods and Services Tax (GST),” Govil asserted.

The GST indirect tax regime was introduced across the country from July 1, 2017.

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See 10-year bond yields in 7.00-7.30% range; rate hike in H2 likely, says ICICI Bank

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Reserve bank of India’s slightly dovish policy has brought cheer to the bond markets. The 10-year bond yields were trading around 7.14-7.15%.

The regulator’s inflation projects and banks now having more time for provisioning, has helped bond markets.

Although the fundamentals did not deserve yields going up all the way to 7.8% but the technicals were bad and there was not enough participation in the market, said B Prasanna, Head-Global Markets Group, ICICI Bank.

He said in the in the last 10-12 days there has been some good news for bond markets  — good borrowing programme was announced and now the RBI bringing down the inflation forecast for second half.

“The language of the policy was only marginally different from the earlier February policy statement but it was substantially dovish in the minutes that came after that, “said Prasanna.

Even though the yields are now lower around 7.14-7.15%, there are lot of positives as well risk factors to look forward to, so 10-year yields may range between 7.00-7.30%.

With regards to interest rate hikes, he said the bank is penciling in a hike in second half of the year.

According to him, inflation will likely overshoot RBI’s projection of 4.4 percent in the second half on back of higher borrowing programme, possibility of fiscal slippage, and increase in MSPs etc.

“The probability of a rate hike is very much on within this financial year but might have got delayed after August but definite possibility of rate hike in second half of this year considering the fact that upside risk to inflation are still there,” said Prasanna.

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Microsoft brings enhanced security features to Office 365

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a bid to protect users from phishing scams and ransomware, Microsoft is rolling out new security features for the Home and Personal versions of its Office 365 suite.

The new protection capabilities include email encryption, ransomware detection and recovery and files restore features.

“Today, we’re announcing new advanced protection capabilities coming to Office 365 Home and Office 365 Personal subscribers to help further protect individuals and families from online threats,” Kirk Koenigsbauer, Corporate Vice President, Office 365 Client Applications-Microsoft, wrote in a blog post.

Ransomware has become an increasingly pervasive attack method in which cybercriminals ‘lock up’ and prevent access to files in an effort to extort money from victims.

“To help protect customers, we are introducing two new capabilities that allow you to recover your files if they are affected by a malicious attack,” Koenigsbauer added.

The new email encryption feature in Outlook.com offers an added layer of protection and ensures end-to-end encryption of users’ email.

“When you use Outlook.com email encryption, your email remains encrypted over a secure connection-minimising the threat of your information being intercepted or leaked to cybercriminals,” the software giant added.

Explaining the files restore feature, Microsoft added: “Files Restore allows you to restore your entire OneDrive to a previous point in time within the last 30 days. You can use this feature to recover from an accidental mass delete, file corruption, ransomware or other catastrophic event.”

The new Office 365 can also detect ransomware attacks and help users restore their OneDrive to a point before files were compromised, so they don’t have to submit to cybercriminal demands.

“As these threats evolve, we are continuously improving detection capabilities to help keep you safe from the most advanced ransomware,” the software giant added.

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Markets trade flat, telecom stocks among top index losers

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The markets, as they opened, remained flat while approaching the second half of the trading hours. The BSE Sensex was trading at 33, 587 points and the NSE Nifty at 10,315 points.

Pharma stocks like Lupin, Dr Reddy’s Labs and Sun Pharma remained the top index gainers and oil marketing companies – HPCL and BPCL continued to gain.

The markets were extending losses due to weak global cues and weak performance by infra and telco stocks with Larsen, Vedanta and Bharti Airtel being the major index losers. The BSE Sensex and the NSE Nifty though trading at similar levels as yesterday show a downward trend in the intraday trend.

The markets on Friday opened flat with the BSE Sensex trading at 33,608 points and the NSE Nifty at 10,322 points.

Trump on Thursday announced that he was unhappy with China’s “unfair retaliation” and said that he had instructed the USTR (US Trade Representative) to consider whether $100 billion of additional tariffs would be “appropriate under section 301 and, if so, to identify the products upon which to impose such tariffs.”

Global markets reacted to the news immediately. Japan’s Nikkei and Korea’s Kospi began to trade sideways after Trump’s statement. The indices lost over 50 basis points in their opening.

Singapore’s SGX Nifty also reacted the same way. The index was trading at levels of 10,300 versus the Nifty April Future’s Thursday close of 10,352. The weak cues indicate a lower opening for the Indian markets.

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Singapore looking forward to expand its partnership with India during Modi’s visit

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India and Singapore will explore areas of further cooperation and take stock of progress of their strategic partnership during Prime Minister Narendra Modi’s June visit here.

“It would be a good opportunity for both sides to take stock of the progress that we have made in different pillars of our strategic partnership, and explore areas for further cooperation,” Singaporean Minister for Education (Higher Education and Skills) Ong Ye Kung said today.

“Next, we can collaborate to develop our technology and innovation ecosystems. Technology is changing the way we work, and how services are delivered and consumed,” said Ong, noting that “India has embraced this wave of change”.

Addressing the 12th International Conference on South Asia, the minister highlighted India’s achievement along with technology, such as Jan Dhan Yojana programme, Aadhaar and India Stack.

Financial technology, Ong said, has accelerated the digitisation of financial services in India.

“So in India, we have found a kindred spirit, because fintech is also a key activity Singapore is promoting.

“India has a vast market, and in Singapore, we have almost every global financial institution operating here, and they are interested in investing in and serving the Indian market. So there is a clear synergy between us,” he stressed.

Singapore, the minister said, is watching significant developments in India closely, such as the introduction of goods and services tax, adding “finally, India is a one single market”.

Demonetisation has boosted digital payments in India while initiatives such as Make in India, Skill India and Start-Up India are aimed at facilitating job creation and inclusive growth, he added.

“Our economic relationship with India is healthy and growing,” Ong said underlining the two countries’ bilateral ties.

India is part of ongoing negotiations for the Regional Comprehensive Economic Partnership Agreement together with ASEAN, China, Japan, South Korea, Australia and New Zealand, he said.

Sounding optimistic on the region, Ong said “So long as China and India, East Asia and South Asia remain stable and continue to grow, the entire thoroughfare of Southeast Asia, including Singapore, will stand to benefit”.

“But we need to work hard, be of service to others, be innovative, and add value wherever we can,” he said.

The annual conference was organised by the Institute of South Asian Studies, a think tank of the National University of Singapore.

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Mutual fund inflows see a sharp decline in March 2018, says AMFI

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A sharp decline of 59% month-over-month equity fund inflows was seen in the month of March 2018, Association of Mutual Funds in India (AMFI) said on Friday.

“Even as gross inflows continued to rise, redemption rose more on account of LTCG tax of 10%,” the body said.

Long-term capital gain (LTCG) tax is the profit earned from holding an asset for a longer period of time.

Equity inflows into mutual funds see a big drop to Rs 6,600 cr compared to more than Rs 16,000 crores last month. Catch @_prashantnair with more details pic.twitter.com/e3sMnYqOjD

— CNBC-TV18 News (@CNBCTV18News) April 6, 2018

The duration of LTCG asset holdings, in the case of immovable property being land, building, and house property, was reduced to 24 months from 36 months from the fiscal year 2017-18.

On a month-on-month basis, pure equity’s gross inflows for the month of March were down 21% to Rs 32,297 crore from Rs 39,102 crore, while redemptions rose about 105% to Rs 36,148 crore, from Rs 17,614 crore.

Gross inflows for equity-linked savings scheme (ELSS) saw a rise of 93% month-on-month, to Rs 4,542 crore from Rs 2,344 crore, and redemptions were up 11% to Rs 839 crore from Rs 759 crore, in the month of March.

A rise of 51% was seen in the gross inflows for balanced funds, at Rs 11,914 crore compared to Rs 7,890 crore, while redemptions rose 80% to Rs 5,160 crore compared to Rs 2,864 crore in the month of March.

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