Increasing influx of international and domestic tourists has made Indian hotel business an attractive destination for domestic developers, international hotel chains and foreign investors. India is currently witnessing an unprecedented growth in hotel construction in metro cities as well as in suburbs to cater to rising demand.
In a recent poll conducted by ConstructionBiz360, around 60% voters feel that India's hospitality real estate market has enough room for growth, whereas 20% responded in the negative and the remaining 20% chose to stay neutral.
The Department of Tourism has also geared up to position India as a global brand to take advantage of the burgeoning international travel and trade and the vast untapped potential of India as a tourist destination.
According to HVS, a global consulting and services organisation catering to hospitality segment, India is likely to add nearly 114,000 hotel guest rooms to its inventory over the next 5 years.
A promising road ahead encouraged reputed real estate player Disha Direct to enter the hospitality space. The company’s hotel division called Greenarth Leisure targets to set up weekend retreats for families for enjoying a quick break any time. A top company official requesting anonymity said, “The Indian hospitality market presents tremendous growth opportunities and is projected to grow at 9% till 2018. At present, the country attracts 6 million international visitors and 750 million domestic tourists and the figures are expected to rise multifold.” There is a huge demand in the mid-level segment, 3 and 4-star category hotels in particular, he added.
Coming on the market performance, Sudeep Jain, vice president (Hotels) at JLL India, says, “Bengaluru is initially numbered among the best-performing hotels markets in India, thereby attracting a number of developers to enter the hospitality space.”
Indian hotel market under-penetrated
American hotel chain Hilton Worldwide feels that the hospitality market in India is under-penetrated and there is a massive shortage of world class guest rooms. Ian Carter, president (Global Operators) at Hilton Hotels told media persons that the hotel chain is bullish on the Indian market and will be focusing on strong brand positioning to serve the local market and Indian guests travelling abroad. There is a huge shortage of branded rooms, thereby presents a growth opportunity in cities and non tier-1 markets, he added.
However, Hilton Hotels sold its 26% stake in DLF Hotels & Hospitality to India’s realty giant DLF in December 2011.