Hotels make room for more

NEW DELHI: Hotels in India are thriving like never before with average room rates (ARRs) skyrocketing and the second quarter growth pegged at 35-40%. No wonder then the hospitality industry wants to make it even bigger, by opening new hotels.

Hotel chains such as Marriott International, Claridges, the Oberoi group and the Clarks group are all busy expanding their operations in India. While Marriott International will be opening four properties, Claridges, Oberoi, and Clarks will be opening two properties each.

Claridges is inaugurating two properties on the outskirts of Delhi. Its Atrium Hotel is scheduled to open doors to customers on December 1. The second property will be a 5-star facility spread over 100 acres, at an investment of about Rs 100 crore (excluding the price of the land), and is scheduled to open in October ’07. “The next 4- 5 years is the right time to expand operations in India as the demand is more than the supply,” says Sanjeev Nanda, managing director, Claridges Hotel.

The Oberoi group of hotels has two projects in the pipeline — The Oberoi, Gurgaon, a super luxury hotel; and Trident Hilton, Mumbai, a business hotel. The investment in the Gurgaon property will be around Rs 400 crore.

The 150-room hotel will offer its customers the luxury of staying in a 600 sq ft room — perhaps the largest in India. Trident Hilton, Mumbai will have 440 rooms and the investment will be to the tune of Rs 600 crore( including land price).

Marriott International will be adding around 852 rooms under its brand, Courtyard. The 199-room Courtyard, Gurgaon and the 210-room Courtyard, Noida are scheduled to open in ’08 whereas the 250-room Courtyard, Kolkata and the 193-room Courtyard, Hyderabad are slated to open in ’09.

On the other hand, the Clarks Group is targeting tier 2 cities with its budget hotels. Clarks Inn, Gorakhpur, a 70-room hotel with investment per room of around Rs 5 lakh will start operations in November this year. With over 325m domestic tourists criss-crossing India, the group is having a special focus on them, while also targeting foreign tourists and business travellers.

“The growth of domestic tourism is humongous and the purchasing power of Indians is increasing. This is just the right time for expansion, be it the deluxe or the budget segment,” Rahul Maini, chief operating officer, Clarks Inn, told ET.

The Intercontinental Hotels Group is also in an expansion mode in India, targeting business centres such as Hyderabad, and tier 2 cities. However, the group spokesperson did not reveal any details as the deals have not been finalised yet. The group is likely to announce a couple of deals in the next few months.