A Golden Opportunity?


MARKET OVERVIEW


The latest research from leading industry analysts points to a promising future for India’s hotel industry, but in this land of opportunity it is the domestic market that offers the real potential, finds Catherine Martin.


financial meltdown, it continues to be a challenge to those who come to seek their fortune. Yet India has emerged as one of the world’s leading markets for hotel development and potential growth. Speaking to Sleeper India from his Delhi


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office, Manav Thadani, Managing Director, HVS India, recounts: “The hotel industry in India went through a fairly good phase from 2005 all the way through to 2008 when the global recession came along.” And whilst the country’s hotels were affected, he explains, it was to a far lesser degree than in other


ndia’s hotel industry paints a fascinating picture. From its first real growth in the Nineties through a spate of terrorist attacks and the effects of a global


markets thanks to a resilient economy. “To show that we’re back to 2007 levels despite adding 25-30% of our room inventory is quite a strong statement for the industry,” he adds. This sentiment is backed up by a new


report presented at the recent Hotel Investment Conference South-Asia (HICSA) held in Mumbai. The Hotel Valuation Index


saw strong increases in demand and were optimistic about the future outlook to increase rates despite new supply entering their markets.” (See Table 1). The report also estimates year-end


(31 March 2011) occupancy at 68%, just 0.8% short of 2007/08 highs: quite an achievement given the number of new hotels that have opened in India since then.


2010/11 proved to be a comeback year for the Indian hospitality industry after two


difficult years. Hotel Valuation Index and Compensation Survey, HVS, HICSA Edition 2011


and Compensation Survey(1) produced by


HVS India states: “The year 2010/11 proved to be a comeback year for the Indian hospitality industry after two difficult years that saw nationwide revPAR drop by 14% and 11.6% in 2008/09 and 2009/10 respectively. Nationwide revPAR is estimated to have increased by 10.7% in 2010/11 through increases in both occupancy and average rate, as hotels across the country


20 Performance results from market data


provider STR Global further support this: “Increases in occupancy have generally outweighed the falls in average daily rate (ADR), resulting in improved revenue per available room.’ The report continues: ‘RevPAR for India as a whole was up 6.2% during 2010 compared with 2009, led by individual revPAR gains in Goa (11.4%), Delhi (8.1%) and Chennai (7.4%). Only Hyderabad


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