In recent years, the Indian hospitality sector has become a focal point for global investment from top hotel chains. Numerous prominent international hotel companies are eager to establish a presence in India, while those already operational are clamoring for expansion opportunities. Their enthusiasm stems from the noticeable deficiency of hotel rooms throughout the nation.
Photo by Michel27 Reports indicate that approximately 40 international hotels will be functional in the country within the next three years. These global hospitality brands plan to cater to a diverse clientele, spanning upper scale, mid-scale, economy, and budget segments.
Prospective entrants into the Indian market include MGM Mirage Hospitality, Amari from Thailand, Fairmont Raffles Hotels, Golden Tulip Hotels, Movenpick Hotels and Resorts, Corinthia Hotel Group from Europe, Carlson, Starwood, Choice, Marriott, Accor, Hyatt, Intercontinental, and Hilton.
Notably, Amari Hotels is preparing to launch Amari India and is actively seeking expansion opportunities in urban and tier-II cities, with plans to open seven hotels and resorts over the next 5 to 7 years. Parallelly, MGM Mirage Hospitality is pursuing management contracts through joint ventures with local real estate developers for establishing hotel properties within the country.
Kaushik Vardharajan from HVS Hospitality Services noted, “India is more profitable for global hospitality firms than the international market. There is a huge demand-supply gap which offers opportunities for international firms.” Data from HVS indicates that while international and domestic chains announced plans for 9,400 new rooms in August, actual construction is progressing on only 3,840 rooms.
Another hotel chain, Fairmont Raffles Hotels International, is deep in negotiations for properties in key cities including Delhi, Gurgaon, Bangalore, Hyderabad, Mumbai, Goa, and Chennai.
Golden Tulip aims to introduce 10 new properties, totaling 800 rooms in tier-II towns by the conclusion of the next fiscal year.
Four Seasons, known for luxury, is currently in various negotiation stages with developers to establish properties across Bangalore, Delhi, Hyderabad, Pune, and Goa. “There is enough room for several players to enter the market. India will become a major market for our company,” stated Sanjiv Shukla, Director of Marketing for Four Seasons.
Accor plans to expand from its current five hotels to 50, targeting 10,000 rooms across 15 cities by 2012.
Meanwhile, ITC Welcomgroup intends to grow its portfolio by adding 40 hotels to its existing 113 across its four brands, with 25 under the Fortune label specializing in business hotels. Pawan Verma, Senior Executive Vice-President at ITC, expressed, “We are attached to the ground unlike them (international chains). We excel in Indian hospitality.”
The Taj Group is pursuing aggressive growth domestically and internationally, looking to launch over 70 new hotels across various categories, including its budget offering, Ginger, alongside its existing 105 hotels, with 17 set to be abroad.
However, the hospitality industry is facing challenges, including declining rates that have dropped by up to 18 percent compared to last year. In 2008-09, the average room rate was Rupees 7,800, which has since fallen to Rupees 6,396 per night.
Despite these hurdles, it’s evident that the Indian hospitality sector is thriving, with hotel constructions proliferating rapidly, resembling a well-organized military operation.