News: Premium hotels fare better in non-metros
(TNN 22/08/2006) Mumbai - Premium segment hotels are recording better growth rates in non-metro markets compared to the metros. Cities like Pune, Hyderabad and Bangalore have recorded higher occupancies in the range of 77-84% in the April-June ‘06 period compared to their metro counterparts like Mumbai, Delhi, Chennai and Kolkata where the rate was 71-76%.
The demand from new businesses like IT, retail, BPO and the shift of several businesses away from metros has spurred premium segment growth in these cities.
Bangalore continues to retain its position as the city with the highest room rates among all the business and leisure destinations with an ARR (average room rate) of Rs 13,218, followed by Hyderabad and South Mumbai at Rs 8,218 and Rs 8,000 respectively, according to a recent study undertaken by Cris Infac.
Industry sources indicate that the performance of premium hotels in Delhi, Bangalore, Agra and Jaipur is expected to be better mainly due to limited room additions.
Bangalore, for instance, has the highest average room rate mainly because it has just seven premium segment hotels. In a reversal of recent trends, hotels based in north India have pipped those in the southern part of the country, on occupancy rates, while in terms of room rates Southern hotels have recorded a higher average.
“The hospitality industry is witnessing unprecedented growth and the increase in revenue and profitability of most of the premium hotels is an indication of this,” said Binaifer Jehani, analyst, Cris Infac.
The demand for premium hotel rooms increased at a rate of 8% between the years 1997-’01. Thereafter, it had declined 10% because of the terrorist attacks in the US in ‘01 and conflict in South Asia. However, growth in the premium hotel segment is likely to be 8-10% in the next five years, as there are fewer expansions in the industry, sources said.
A huge demand-supply gap may force hotels to increase room rates by 20% in the next few months. Currently ARR in premium hotels is around Rs 6,550/day with occupancy levels ranging between 77-84% at most business and leisure destinations. With summer occupancies in most of the hotels touching peak levels, most of the hotels have had to postpone renovation plans.
“Strong tourist inflow, on the back of a growing economy fuels strong demand for hotel rooms,” said Alok Agarwal of Motilal Oswal. FY06 (Apr ‘05 to March ‘06) saw 4.01m tourists arriving into the country, up 11.5% from 3.6m in FY05.
The demand from new businesses like IT, retail, BPO and the shift of several businesses away from metros has spurred premium segment growth in these cities.
Bangalore continues to retain its position as the city with the highest room rates among all the business and leisure destinations with an ARR (average room rate) of Rs 13,218, followed by Hyderabad and South Mumbai at Rs 8,218 and Rs 8,000 respectively, according to a recent study undertaken by Cris Infac.
Industry sources indicate that the performance of premium hotels in Delhi, Bangalore, Agra and Jaipur is expected to be better mainly due to limited room additions.
Bangalore, for instance, has the highest average room rate mainly because it has just seven premium segment hotels. In a reversal of recent trends, hotels based in north India have pipped those in the southern part of the country, on occupancy rates, while in terms of room rates Southern hotels have recorded a higher average.
“The hospitality industry is witnessing unprecedented growth and the increase in revenue and profitability of most of the premium hotels is an indication of this,” said Binaifer Jehani, analyst, Cris Infac.
The demand for premium hotel rooms increased at a rate of 8% between the years 1997-’01. Thereafter, it had declined 10% because of the terrorist attacks in the US in ‘01 and conflict in South Asia. However, growth in the premium hotel segment is likely to be 8-10% in the next five years, as there are fewer expansions in the industry, sources said.
A huge demand-supply gap may force hotels to increase room rates by 20% in the next few months. Currently ARR in premium hotels is around Rs 6,550/day with occupancy levels ranging between 77-84% at most business and leisure destinations. With summer occupancies in most of the hotels touching peak levels, most of the hotels have had to postpone renovation plans.
“Strong tourist inflow, on the back of a growing economy fuels strong demand for hotel rooms,” said Alok Agarwal of Motilal Oswal. FY06 (Apr ‘05 to March ‘06) saw 4.01m tourists arriving into the country, up 11.5% from 3.6m in FY05.
posted by InCar Group Press Room at 19:39
0 Comments:
Post a Comment
<< Home