| High tariffs, good occupancy levels, but seasonal fall in traffic |
Development of serviced apartments gains ground
Global hotel
chains keen to
enter India
UP AND COMING: A five-star hotel project of the Indroyal Group coming up at Chakkaraparambu in Kochi.
CHENNAI: Following the boom in the real estate sector, the hotels and hospitality sector appears poised for a major push over the next two to three years. According to some estimates by the Union Tourism Ministry, there can be an up to 80 per cent rise in hotel rooms in the next two years.
At the beginning of 2007-08, it was estimated that there were about one lakh rooms available for occupation across the country. It was felt to be 1.5 lakh rooms short at that stage. Given the expansion plans of existing hotels, and the expression of interest by new hotel chains to enter the high-demand Indian market, the tourism authorities expected an addition of 80,000 rooms by 2009. That could still meet just over half the projected demand, leave alone the growth potential during this period.
Corporates and visiting businessmen from abroad have been complaining both about non-availability of rooms in some cities, and correspondingly the ever increasing hotel tariffs. “We have metros where room rates have hit the roof top at between $400 and $500 per night. It is not as though all rooms cost so much. But the tariff goes that high, and during the season, it is not even possible to get good rooms in the city centre. On an average, the rates are upwards of $200 (about Rs. 8,000) for quality rooms,” explains a Vice-President (Finance), who handles the business for visiting foreign clients.
Rooms are difficult to come by in New Delhi, Kolkota, Mumbai, Chennai, and Bangalore in particular. There are centres where not many quality or star hotels are available, but industrial and commercial development has already taken place. The hotel chains may be taking their time to develop facilities there.
Sensing the potential of the market, at least a dozen leading global hotel chains have shown considerable interest in India. Some of them, such as the Hilton group, have also identified partners to take up joint venture development here. Builders such as the DLF group are also getting into the hospitality sector to meet this demand. Hospitality industry sources say that Hyatt, Intercontinental, Marriott, and Starwood, are some of those who will be entering the Indian market in a big way in the next couple of years.
Another concept that has gained ground here seems to be the development of serviced apartments. Especially in centres with a ballooning IT and ITeS (IT-enabled Services) business, these apartments have become useful and provide attractive rates for those renting or leasing the accommodation for an extended period, say three months or even more. It comes in handy for couples who come together, or executives willing to share an apartment with common facilities. Industry sources say this segment of the hospitality sector may also be expanding significantly in the years to come. But both tourism authorities and the industry welcome the clear separation of the hospitality sector — five-star hotels, the three-star category, serviced apartments, business hotels, and budget hotels. But the key to success lies in good maintenance and excellent service. That means, aside from the development or building of hotels, the industry needs to recruit and train qualified service staff.
The Hindu
