InFocus | India
Booming hotel sector
A greater inflow of budget tourists highlights the need for rooms at more reasonable prices.
- By Rajendar Menen, Gulf News Report
- Published: 00:00 August 14, 2006
For the ninth and 10th five-year plans, the Ministry of Tourism's official projection of hotel rooms is pegged at a conservative 125,000 (for an estimated 3.5 million foreign tourists a year).
Indian travellers have not been factored in.
With international air capacity into the country increasing several times over, and its markets pointing the future for companies and countries worldwide, India's room rush is huge. Markets such as Mumbai, Hyderabad, Bangalore and Chennai are buzzing.
Chains can't seem to get enough rooms even in the same city. ITC, with two hotels in Chennai, is adding another. The Oberoi Group wants a third hotel in Delhi and is building a second one in Gurgaon.
The Shangri-La, a recent entrant into the Indian market, is entering Bangalore with three hotels. Bharat Hotels' Lalit Suri has staked out the under-construction 320-room, seven-star hotel from Balaji Hotels and Enterprises in Chennai. Foreign player Accor has just completed the 280-odd room Novotel in Hyderabad, Marriott commissioned a hotel in Chennai earlier this year, and will add Bangalore to its expansion plans. It also has hotels coming up in Noida and Gurgaon. ITC subsidiary Fortune is staking out Ludhiana, Siliguri and Vijayawada in its current phase of growth.
Mumbai's hospitality market is booming with ITC, Trident, Ibis, Park Plaza, Sofitel, Four Seasons and Taj set to start new hotels. According to a recent study by hotel monitoring body HVS International-India, while Hyderabad, Mumbai, Goa, Chennai and Bangalore occupy top slots for hotels, emerging markets for the hotel industry include Pune, Kochi, Chandigarh, Ahmedabad and Vishakapatnam.
According to the study, Hyderabad will need 8,000 rooms by 2009, Goa 6,500 rooms, Chennai 7,500 rooms and Bangalore 14,000-20,000 rooms. “This is certainly boom time in terms of construction and investment in hotels in India,'' says Andrew Quinlan, General Manager, Shangri-La, New Delhi, whose chain is targeting eight to 10 hotels by 2010.
But the yawning gap is the mid-segment hotels. Accor, for instance, which has 4,500 economy hotels worldwide, or the Taj Group's IndiOne that has morphed into the recently launched Ginger brand, is slated to launch a property every six weeks, and offer wi-fi systems, chic furniture, plasma TV, a tea kettle in the room and international toiletry at sub-Rs1,000 rates. Launches are expected in Pimpri, Thiruvananthapuram, Bhubaneswar and Mysore.
Delhi-based InterGlobe Hotels, a joint venture between InterGlobe Enterprises and Accor Asia Pacific, plans to build 25 hotels under the brand Ibis in 12 years, five of which are already under execution. With 150 to 215 rooms, Ibis hotels will focus on emerging cities such as Gurgaon, Jaipur, Ludhiana and Jalandhar.
Others in the mid-segment are Sarovar, Easy Group, Country Inns and Suites, and Indo-Asia Tours, the last set to have four-star properties with three-star tariffs (Rs2,000 to Rs2,500) in tourist destinations such as Jaipur, Jodhpur, Coorg and Hampi.
On the other hand, Sarovar's no-frills Hometel hotels are commissioning in business locations in Hyderabad, Pune, Mumbai and Chennai, and in newer destinations such as Pushkar, Indore, Udaipur, Mussoorie and Baddi. With more low-cost airlines, there is a greater inflow of budget tourists seeking out rooms at more reasonable prices. The Rs18 billion mid-hotel segment is expected to burgeon to Rs46 billion by 2010.
According to analysts, at its current strength, the five-star hotel industry in India has a turnover of Rs43 billion. Add to this the mid-segment of Rs18.5 billion, which makes a total of Rs61.5 billion. Growing at an annual 8.5 per cent, hotels will earn Rs78.55 billion in another three years.
