2013 has been a year of mixed emotions for the hospitality industry in India, bearing in mind the devaluation of the rupee against the US$, expensive real estate, taxation issues, infrastructure woes, clearance issues and dearth of an efficient construction industry. However, experts believe that the overwhelming requirement for quality hotel rooms ensures that there still is huge potential for growth in the Indian hospitality market for the right players.
The hospitality industry was under constant pressure in the year 2013 because of numerous reasons. The overall slump in the global and local economy, consequential in lower spending by people during business trips/ holidays resulted in massive discounts being offered by hoteliers which impacted the Average Daily Rate (ADR’s) and RevPARs, stated Ajay Bakaya, Executive Director, Sarovar Hotels & Resorts. On a positive note, he said that, regardless of the rupee slump, the hospitality sector continued to be forerunners across all markets that come under the umbrella of Travel and Tourism.
India’s rapidly expanding middle class; increasing buying power and growing infrastructure make it a lucrative inbound and outbound tourism destination. This is leading to a growing need for affordable yet quality hotel rooms, as five star hotels may not always be the most viable option, stated Rahul Pandit, CEO, Lemon Tree. “A stable economy and government is the backbone of any industry in the world. When the economy or the Government is in stress the hospitality industry will suffer. We expect the New Year to be much more hopeful for the industry. Social and financial situation in the country is likely to witness improvement, and that would definitely improve the business,” he added.
Dilip Puri, MD, India and Regional VP South Asia, Starwood Asia Pacific Hotels & Resorts believes that India is going through trying times, and everyone is feeling the pressure. “However, the two most important components supply and demand should balance and complement each other for a smooth sailing business. We are aware that supply is growing at a fast pace, but not demand. Luckily, India has a strong demand growth. This is an encouraging development and will continue to move the industry forward.”
Shwetank Singh, Regional Vice President – Sales and Operations, Premier Inn, South Asia revealed that expansion plans for any hotel chain should be realistic considering the development process in India is quite difficult and time-consuming. “Other than the financial situation we are in now, I believe India is going through a maturity phase,” he said.
Over 52 per cent of Accor’s development projects in the pipeline are in the Asia-Pacific region revealed Jean-Michel Cassé, Senior Vice President-Operations, Accor India. “Despite the current slowdown, we continue to be positive. India holds strong demand across all segments. India offers tremendous potential for the development of hotels,” he stated.
