Hotel chains to pump in Rs 4,500 crore in 2 years
Global hospitality majors such as Intercontinental, Starwood, Hilton, Accor, Carlson are all stepping up their global offerings in the Indian market given the upbeat demand.
By Lijee Philip, TNN |
MUMBAI: HOSPITALITY majors are likely to pump in close to Rs 4,500 crore in new projects and expansion over the next two years on the back of a massive growth in business and leisure travel. Indian Hotels (Taj brand), Leela Venture, EIH (Oberoi Group), Kamat Hotels, Royal Orchid and other leading chains are likely to see room inventory go up by around 6,500.
Global hospitality majors such as Intercontinental, Starwood, Hilton, Accor, Carlson are all stepping up their global offerings in the Indian market given the upbeat demand.
While Leela Ventures is investing around Rs 1,265 crore, Indian Hotels is expected to invest around Rs 1,250 crore. EIH, Kamat and Royal Orchid are expected to invest around Rs 1,150 crore, Rs 365 crore and Rs 500 crore, respectively. A total of 60 new properties across categories are likely to come up in India, sources said.
The country is witnessing a spurt in hotel expansion in the face of severe shortage of quality hotel rooms because of increased business activity and a spurt in leisure travel by the country’s middle class as well as international tourists, says Chender Baljee, CMD, Royal Orchid. The demand-supply mismatch is likely to last for another two years with most of the fresh supply coming in 2009.
A buoyant economy, growth in aviation and real estate, improved infrastructure and the easing of restrictions on foreign investments is expected to fuel demand across star categories in a majority of markets across India. “Hotels on an expansion phase will be in a better position to absorb the decline in occupancies and rates over the long term, as any additional supply can offset the pressure on room rates,” said Nitesh Shetty, MD, Nitesh Estates. Analysts also indicate that room additions on the back of a strong tourist inflows would ensure better margins and profitability.
Foreign tourist arrivals have grown by 10-15% in the last one year. Over the last few months, tier-II cities like Jaipur, Gurgaon, Hyderabad, Pune, Bangalore are seeing growth both in occupancy and room rates. While occupancy is around 75-80%, room rates are up by 15-20% in these markets, sources said.
Global hospitality majors such as Intercontinental, Starwood, Hilton, Accor, Carlson are all stepping up their global offerings in the Indian market given the upbeat demand.
While Leela Ventures is investing around Rs 1,265 crore, Indian Hotels is expected to invest around Rs 1,250 crore. EIH, Kamat and Royal Orchid are expected to invest around Rs 1,150 crore, Rs 365 crore and Rs 500 crore, respectively. A total of 60 new properties across categories are likely to come up in India, sources said.
The country is witnessing a spurt in hotel expansion in the face of severe shortage of quality hotel rooms because of increased business activity and a spurt in leisure travel by the country’s middle class as well as international tourists, says Chender Baljee, CMD, Royal Orchid. The demand-supply mismatch is likely to last for another two years with most of the fresh supply coming in 2009.
A buoyant economy, growth in aviation and real estate, improved infrastructure and the easing of restrictions on foreign investments is expected to fuel demand across star categories in a majority of markets across India. “Hotels on an expansion phase will be in a better position to absorb the decline in occupancies and rates over the long term, as any additional supply can offset the pressure on room rates,” said Nitesh Shetty, MD, Nitesh Estates. Analysts also indicate that room additions on the back of a strong tourist inflows would ensure better margins and profitability.
Foreign tourist arrivals have grown by 10-15% in the last one year. Over the last few months, tier-II cities like Jaipur, Gurgaon, Hyderabad, Pune, Bangalore are seeing growth both in occupancy and room rates. While occupancy is around 75-80%, room rates are up by 15-20% in these markets, sources said.
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