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Hotels Betting Big on Indian Story

Posted: Friday, 05 April 2013 11:02

Hotels Betting Big on Indian Story

April 05: According to a recent report by global database and research service for hotel construction projects,, India’s hospitality sector is likely to see investment in excess of $200 billion over the next three years when around 300 branded hotels will come up in India, constituting about 17% of Asia’s hotel construction pipeline.

India has the second largest number of hotels under construction with 292 first class and luxury hotels, second only to the 592 hotels that are coming up in China over the next three years, according to Livemint. The hotel projects under construction include projects from companies such as Hyatt, Hilton, Carlson, Accor and Indian Hotels,

Experts feel that if one assumes a fair mix of budget to luxury hotels, with over 100 rooms per hotel, on an average each room will cost over $100,000 in construction. “From the growth perspective globally, higher growth is coming out of India. Where global economies are growing at around 2 %, Asian economies are growing at 5-6%. Hospitality industry is closely linked with economy,” said an expert and consultant in real estate and hospitality who adds, “besides, it will still be a while before India becomes a mature market like US or Europe. Even China has huge supply coming in; thus growth prospects in India are better.”

The government of India has termed the shortage of branded hotel rooms as an acute shortage. It estimates an additional need of 180,000 branded hotel rooms in addition to the existing 128,000 rooms in order to increase India’s share of global inbound tourists to 1% from the current 0.6% by 2016-2017.

HVS, a hotel consultancy company on the other hand, puts the number of hotel beds available across the country in the organized sector at 84,000 and outlines a need for 90,000 hotel beds over the next five years in India’s metropolises, including 11,000 in Mumbai and 10,000 in Bangalore.

Of those hotel companies which will be opening properties in India, Accor is currently looking at eight hotels, Carlson Rezidor is developing 30 new properties while Hilton and Intercontinental are planning 9 and 16 new hotel openings respectively, according to the report. Hyatt, which operates 13 hotels in India, will also come up with 15 new hotel opening in the near future. Hotels are betting big on India’s growing middle class of over 350 million people having spare money to spend on travel, adds Livemint.

The study comes on the heels of a recent announcement by Ms. Priya Paul, chairperson of the home-grown Apeejay Surrendra Park Hotels Ltd, which runs the Park hotel chain. She says that the group will spend Rs.1.2 billion to build three hotels over the next four years and introduce a new marketing campaign to rebrand itself. This is only the third expansion initiative of the group in the past 25 years and shows the belief of the hospitality company in the expanding market. They have an inventory of 1,200 luxury rooms and expect to add an additional 800 over the next 3 to 4 years.

Please visit for details

For an earlier related article, visit Spate of New Luxury Hotels healthy for Wine

Tags: Hilton, Hyatt


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