The year 2014 was a triumphant one for the hospitality sector, having got the much longed for industry lending status as well as the optimism of the new government’s thrust on the tourism sector, Manav Thadani, Chairman, HVS Asia Pacific said, adding that he expects the year 2015 to look even brighter.
According to him, the hotel industry is beginning to see some green shoots of revival in the current year. “Our 2014 report shows that occupancy picked up marginally, maybe by a per cent or so, and rates went down. The trend has been reversed and there will be a lot more pick up in next seven to eight months. In 2015, I see occupancy going up but still not the rates. Rates generally take a little longer to settle,” he opined.
Speaking about the sector’s bullishness on the Indian hospitality space, he said that the market sentiments have changed and we are seeing a lot of interest by businesses to come to India, explore, meet and so forth. “In the next six to eight months, India will see a lot of infrastructure development starting to happen. Following that the business cycle will start returning to India,” he said and opined that India will see a spurt in the inbound leisure market which will start seeing a fair amount of uptake with the eVisa coming into place. As we all know, the visa was a major deterrent to inbound traffic thus far. The real turnaround, I believe, will come about next year in the winter season,” he stated.
Replying to a question on the growth pattern for the sector next year, he said that the growth will be in two segments – one is the real two star branded economy hotels, such as Formule1, Red Fox, Ginger and so on, and the real mid market brands. Anything priced below Rs. 4,000 in India is likely to do well, he said. However, luxury residence segment also has a very good potential. “The branded luxury segment is very small, and I can count the 8-10 projects currently operational and related to the hotel sector. It can easily fit into the 6-7 per cent of the population that the analysts say is willing to spend that kind of money,” he added.
