HVS releases Hotels in India - Trends and Opportunities, 2009 Edition
The New Delhi office of HVS has released the 2009 edition of "Hotels in India - Trends and Opportunities". The report presents market performance across 11 major cities in India and highlights important trends in the Indian hospitality industry.
Tweet-- According to the report, in 2008/09 the industry saw anoverall decline in occupancy and revenue per available room (RevPAR) in mostcities in India. This was expected in view of the global economic contraction. However, the report states that despite a contracting global economy, India recorded 562.9 million domestic travellers in 2008, as compared to only 5.37 million international travellers: domestic travellers being 104 times that of international ones. According to HVS, domestic tourism has neverbeen given its due. Even today, the statistics on foreign travellers attractmedia attention, while it is the less represented domestic travellers that formthe major component of revenue generators for the Indian travel industry.According to Manav Thadani, Managing Director, HVS, “HVS has observed twocycles for the hospitality industry from 1997 till now, both with distinctpeaks and troughs. In the downturn of 2001/02, it was the domestic travellerwho rescued the tourism industry; and this time around, too, it will be thedomestic traveller who will swing the tide for the industry”.
The report gives an account of the new supply entering themarket in 11 major cities across the country. It states that in a period of 11years, from 1998/99 to 2008/09, the supply of rooms increased by 109%. Thesupply is further expected to increase by 94% by 2013/14 from that in 2008/09;therefore, reflecting a faster growth in the coming years.
Table: Growth of Room Supply – India (1998/99-2013/14)
According to HVS, the addition of new supply across thecountry in each of the hotel categories, particularly in the three andfour-star ones, will ensure that hotels charging high rates have a product thatcan support their rate. Current hotel operators will need to realise that oncethe consumers have several options, they will settle for the best valueproposition and be quick to switch loyalty from hotels that they believe areovercharging them.
With the Commonwealth Games due for October 2010, Delhi-National Capital Region (NCR) remains the focus amongst all cities. Though the city is set to witness a growth of 192% over its existing supply (16,560 rooms), HVS expects only 53% of these rooms to be built over the next five years. According to Manav, “the whole process of auctioned hotel sites was poorly managed between the various government agencies involved and this hasled to the current situation of shortage of rooms.” More importantly, a large numberof the ongoing hotel projects will not get completed before the Games. HVS estimates that only 5,700 rooms will open before the Commonwealth Games. HVSassociates have physically verified the development stages for each hospitalityproject and have reported the numbers based on hotels under construction inDelhi, Gurgaon and Noida. Also, HVS expects the NCR to see a major rate correction in the short term.
Notes to Editor
HVS Global Hospitality Services is a leading consultingfirm dedicated to the hotel, tourism and leisure industries. Founded by StevenRushmore in 1980, HVS currently has 29 strategically located offices around theworld and a staff of over 300 highly trained consultants to fulfil a wide rangeof requirements related to the industry. Manav Thadani is the managing directorand partner of the New Delhi office, established in 1997, which overseesactivities in India and the Indian subcontinent region. HVS activities in theregion include Consultancy & Valuation, Executive Search, Marketing &Communications Services, Web Strategies, and Asset Management & OperationalAdvisory Services.
