About 600 new hotels were planned to be launched or to be in various stages of development across India, expecting to be commissioned over the next year or two. It appears that less than half might actually materialize.
While plans for 150 new hotel projects have been completely dropped, as many as 18,000 guestrooms across 150 other hotels are up for sale. These properties are under various stage of construction, including projects that are about to start, half-built, in shell structure form or even in the finishing stages, reports DNA.
"Around 150 hotel projects have just disappeared because of tall claims made primarily by the real estate companies. Then there are another 150 properties which are on the block. So realistically speaking, just around 300 new hotels are actually being built," Manav Thadani, managing director of hospitality consulting firm HVS International-India, is quoted as saying.
Most affected as the companies which had entered the business to make a quick buck due to the boom in economy and the predicted continuous shortage of hotel space. They are opting out now as they are feeling huge financial pressure in their core business, which is building and development of real estate.
HVS released a report titled ‘Trends and Opportunities Report’ last August, which analyzed the supply pipeline for different India cities. The report said approximately 114,000 rooms were being planned across the country, of which 58% would actually materialize
"We have gone back and done that survey all over again and the figures are startling," said Thadani. The new numbers, unveiled at the two-day Hotel Investment Conference South Asia, reveal a recessionary scenario. Now only about 84,000 rooms are being planned, of which 61% or 51,240 rooms might materialize. That's a drop of 14,880 rooms, or 22.5%, from the estimate made last year.
Officials of other hospitality consulting firms, including Knight Frank India, Mahajan & Aibara, Cushman & Wakefield, reportedly support the HVS survey findings
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