News: Rising demand for rooms fuels Indian hotel expansion spree
(TNN 05/10/2006) New Delhi - The hospitality sector maybe sporting no vacancy signs more often today, but the hotels industry is expanding big time.
Estimates suggest that close to 48,500 rooms are under active development in 10 cities in the country which will help to bridge this huge shortage of rooms. Leading the packs are IT hubs Hyderabad and Bangalore where 60 new hotels, service apartments and mixed used development are coming up with more than 15,000 rooms.
According to consultancy firm HVS International’s annual report, most of this supply will become operational between ’08 and ’10. The traditional markets of the National Capital Region(NCR) and Mumbai are still way ahead. Most of this development is taking place in Gurgaon and neighbouring Noida and amounts to 47 new hotels with 10,800 rooms much of this is due to the Commonwealth Games scheduled for ’10.
Only 50-60% of developments have started in these new projects. Manav Thadani MD, HVS International, says, “The supply of new hotels represents branded properties. The demand for rooms has risen significantly in nearly all cities for the current financial year and since supply has increased only marginally this has led to a sharp increase in average room rates in Bangalore, Delhi, Hyderabad, Mumbai, Chennai and Pune.”
In the Mumbai market, the research indicates that demand grows by nearly 1,000 room nights per day every year. The proposed new supply — which will equal about 36% of the existing 9,000-odd rooms — will be inadequate to meet the city’s requirements, especially keeping in mind that the city will shortly have an upgraded airport and also a new convention centre.
In Pune alone, at least 25 hotels are under development and more than 3,500 rooms will enter this market in the next five years. Says Ranjan Bhattacharya, president, Country Inns & Suites, “Going forward, the biggest challenge, given the present supply scenario, will be the availability of quality sites for hotel projects. Site location, accessibility, visibility and proximity to key demand areas are critical factors for long-term feasibility of hotels and lack of good sites would have a negative impact on the supply front.”
Adds Sanjeev Nanda, MD, The Claridges Hotels & Resorts, “There is no doubt in my mind that for hospitality sector to grow we need better infrastructure and more rooms. Now, big groups are realising this need and expanding to other cities. The real estate market too has seen its best times in the last two to three years, and existing land prices across most cities are somewhat prohibitive, especially for stand alone property developers.”
Estimates suggest that close to 48,500 rooms are under active development in 10 cities in the country which will help to bridge this huge shortage of rooms. Leading the packs are IT hubs Hyderabad and Bangalore where 60 new hotels, service apartments and mixed used development are coming up with more than 15,000 rooms.
According to consultancy firm HVS International’s annual report, most of this supply will become operational between ’08 and ’10. The traditional markets of the National Capital Region(NCR) and Mumbai are still way ahead. Most of this development is taking place in Gurgaon and neighbouring Noida and amounts to 47 new hotels with 10,800 rooms much of this is due to the Commonwealth Games scheduled for ’10.
Only 50-60% of developments have started in these new projects. Manav Thadani MD, HVS International, says, “The supply of new hotels represents branded properties. The demand for rooms has risen significantly in nearly all cities for the current financial year and since supply has increased only marginally this has led to a sharp increase in average room rates in Bangalore, Delhi, Hyderabad, Mumbai, Chennai and Pune.”
In the Mumbai market, the research indicates that demand grows by nearly 1,000 room nights per day every year. The proposed new supply — which will equal about 36% of the existing 9,000-odd rooms — will be inadequate to meet the city’s requirements, especially keeping in mind that the city will shortly have an upgraded airport and also a new convention centre.
In Pune alone, at least 25 hotels are under development and more than 3,500 rooms will enter this market in the next five years. Says Ranjan Bhattacharya, president, Country Inns & Suites, “Going forward, the biggest challenge, given the present supply scenario, will be the availability of quality sites for hotel projects. Site location, accessibility, visibility and proximity to key demand areas are critical factors for long-term feasibility of hotels and lack of good sites would have a negative impact on the supply front.”
Adds Sanjeev Nanda, MD, The Claridges Hotels & Resorts, “There is no doubt in my mind that for hospitality sector to grow we need better infrastructure and more rooms. Now, big groups are realising this need and expanding to other cities. The real estate market too has seen its best times in the last two to three years, and existing land prices across most cities are somewhat prohibitive, especially for stand alone property developers.”
posted by InCar Group Press Room at 17:10
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