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Hotels in India - Trends and Opportunities 2009.
By Manav Thadani and Inshita Wij
Wednesday, 7th October 2009
 

This publication highlights the current trends and future opportunities for the hospitality industry in India.

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 and highlights important trends in the Indian hospitality industry.

The year 2008/09 saw declines in occupancy and RevPAR in most cities in India, following the global contraction. The industry experienced an overall decline in occupancy of 12.4%, following the downward trend that started last year. Surprisingly, the average rates for the industry declined only by 1.9%. The industry-wide RevPAR saw a decline of 14%. The five-star deluxe segment took the biggest hit followed by the first class and mid market segments, respectively.

Not even a single city in India could escape the decline in occupancy levels: Mumbai (-18.4%) and Jaipur (-16.4%) were the worst hit, followed closely by the leisure destination, Goa. Bangalore, Hyderabad, and Pune, which are majorly dependent on the ITeS sector for room nights demand, saw a sharp decline in 2008/09 as compared to other major Indian cities. In terms of average rates, Agra and Ahmedabad were the only two cities that continued the upward trend.

Despite the declines in occupancies and average rates, the outlook for the Indian tourism industry remains positive. With 5.37 million international travellers and 562.9 million domestic travellers visiting India this year, India saw an overall growth in tourism. Even in the global downturn, the domestic travellers, which were 104 times the international ones, continue to sustain industry growth. However, there is still a lot of room for growth in the industry, as India accounts only for less than 1% of the world tourism market.

As the tourism industry in India continues to grow, HVS continuously monitors the new supply entering the market. In a period of 11 years, from 1998/99 to 2008/09, the supply of rooms increased by 109%. The supply is further expected to increase by 94% in 2013/14 from that in 2008/09. The new supply entering the market across all star categories will prompt rate corrections and will force the hotel operators to justify high rates with the services and facilities they offer.

To access the full PDF report, please CLICK HERE:

www.hvs.com/StaticContent/Library/TrendsandOpportunities2009.pdf

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