AHMEDABAD: A Cushman & Wakefield (C&W) report states that the hospitality sector will see a rise of over 65 per cent in total hotel inventory by 2017. Approximately, 52,000 new hotel rooms are expected to come into existence in the next five years (2013-2017). Despite a slow response, the hospitality sector of India, is expecting to witness better demand, in the coming years, on account of improved global economic conditions. Many hotel projects, that were delayed in the last two years, are also expected to get completed, adding to the inventory, in the next five years. The NCR is expected to contribute approximately one-third to the total expected hotel rooms supply, in the period under consideration, which is expected to see 17,000 keys. Kolkata, at 105 per cent, will witness the highest percentage increase in inventory by adding 3,813 rooms to its existing inventory by 2017. Pune, at 41 per cent, will contribute the lowest number of rooms (2,853) to its existing 6,970 rooms.
Akshay Kulkarni, regional director – hospitality, South and South East Asia, Cushman & Wakefield, says, “Even while India is considered to be an attractive market for both, leisure and business travel, there are some inherent deficiencies due to which hospitality projects have hitherto, taken long to come up, including aspects like funding and regulatory issues, which have either delayed or in some cases, stalled projects. Despite a significant number of leisure travel both, international and domestic, hoteliers are seen to be concentrating on business destinations, specifically, gateway markets of the NCR, Mumbai and Bangalore.” Kulkarni further says, “The expected growth in Chennai and Pune is largely driven by the current paucity of branded hotels in these cities, which has given the hoteliers an opportunity to look at upping their presence in the city. Taking a cue from the economic fundamentals of the cities, which are strong on the basis of a more holistic growth of services as well as the industrial sector, these cities are expected to see a corresponding rise in the estimated demand, in the next few years as well.”
Of the total expected supply of hotel rooms in the next five years, mid-scale hotels are expected to see the highest supply of 18,500 units, followed by luxury, which is estimated at 10,300 units, contributing 36 per cent and 20 per cent to the total expected supply, while budget (9,000 units), upscale (6,800 units) and upper upscale (6,900 units), are estimated to be contributing approximately 44 per cent to the total supply, in the next five years.
City-wise overview and outlook
The mid-scale segment is seen to have the largest inventory of 29 per cent, followed by the budget segment with 27 per cent, luxury with 23 per cent, upper upscale with 11 per cent and upscale with 10 per cent. The average inventory per hotel is currently 91 keys; the largest hotel currently operational is the Taj Mahal Palace located in south Mumbai, with a total of 560 keys. Mumbai currently has a total upcoming supply of 12,098 keys, of which 35 per cent is in the mid-scale segment, 22 per cent is in the luxury segment, 17 per cent in the upscale segment, 16 per cent in the budget segment and 10 per cent in the upper upscale segment. Approximately, 17 per cent of the upcoming supply is expected to open in 2014, which includes brands, such as Lemon Tree (298 keys), JW Marriott (525 keys), Radisson Blu Plaza Hotel Powai (335 keys), etc. The city has a total of 12,098 keys upcoming, which accounts for almost 71 per cent of that of the existing pipeline.
Ahmedabad has about 3,439 keys in the organised segment as of 2013. Almost four new hotels opened for business in 2013, adding a total of 512 keys to the existing room supply, namely Tune Hotels (100 keys), Aloft (176 keys), Easy Eastin Citizen (52 keys) and Novotel (184 keys). Moreover, Crowne Plaza with 200 keys, was also expected to start operations in 2013 but is currently on hold. Ahmedabad is expected to have an addition of over 1,800 keys over the next five years. Of the total supply, 39 per cent belongs to upper upscale, 25 per cent to mid-scale, 14 per cent to luxury, 11 per cent each budget and upscale. It is likely to see an upward movement in demand in 2014, given the upcoming inventory of office stock in the city and being an emerging city along with the development as a twin city, with Gandhinagar in the neighbourhood.
Bengaluru has a total hotel inventory of approximately 11,089 rooms. Leela Place is currently the largest hotel in the city with a total of 357 keys. During the last four years, Bengaluru saw the largest increase in inventory during 2010, with 23 per cent, with an addition of almost 1,522 keys with brands, such as Lemon Tree (173 keys), Vivanta By Taj (199 keys), Crowne Plaza Electronics City (195 keys), etc. Bengaluru currently has a total upcoming supply of 6,978 keys by 2017; of which 27 per cent is expected to account for in the budget segment and in the mid-scale segment respectively, 25 per cent in the upscale segment, 17 per cent in upper upscale and 4 per cent in the luxury segment. Of the total upcoming supply, 38 per cent is expected to become operational during 2014, which includes brands, such as Encore (90 keys), Double Tree By Hilton (185 keys), Hilton Residences (250 keys), Renaissance (278 keys), Conrad (250 keys), etc. Of the total room demand, 60 per cent comes from corporate clients, and is further expected to see steady growth in time.
Chennai has a total hotel inventory of approximately 7,517 rooms. During the last four years, Chennai saw the largest increase in inventory during 2012 with 21 per cent, due to the addition of the ITC Grand Chola (600 keys), The Leela Palace (188 keys), Park Hyatt (188 keys) and the Radisson Blu City Centre (162 keys). Chennai currently, has a total upcoming supply of 3,274 keys by 2017; of which 51 per cent is in the mid-scale segment, 29 per cent is in the budget segment, 11 per cent in the upper upscale segment and 9 per cent in the upscale segment. Approximately 20 per cent of this total inventory is expected to become operational in 2014, which includes brands, such as Ibis (160 keys), Gateway (159 keys), Formule 1 (150 keys), Holiday Inn (200 keys), etc.
Hyderabad has a total hotel inventory of approximately 6,448 rooms. The average inventory per hotel is currently 46 keys, with Westin having 428 keys in Madhapur. Within Hyderabad, the mid-scale segment constituted 45 per cent of the total inventory, followed by the upper upscale segment with 19 per cent, upscale and mid-scale with 17 per cent and budget with 2 per cent. Hyderabad currently has a total upcoming supply of 4,057 keys; of which 46 per cent is in the mid-scale segment, 23 per cent is in the budget segment, 13 per cent in the luxury segment, 12 per cent in the upscale segment and 6 per cent in the upper upscale segment. Approximately, 50 per cent of the upcoming supply is expected to open up in 2014, which includes brands such as Formule 1 (174 keys), Mercure (128 keys), The Oberoi (220 keys), Hyatt Place (148 keys), etc.
In 2013, the NCR had 26,500 keys out of which, 77 per cent comprised of the organised segment. The NCR featured a 16.5 per cent year-on-year growth in total organised supply of over 20,457 keys, during 2013. Close to 15 new hotels opened up for business in 2013, adding a total of 2,920 keys to the existing room supply. The NCR is expected to have an addition of over 17,000 keys, over the next five years. Of the total supply, 31 per cent belongs to Delhi, 27 per cent to Noida, 12 per cent to Greater Noida, 5 per cent to Manesar and 3 per cent to Faridabad.
Pune has a total hotel inventory of approximately 6,970 rooms. During 2013, the city witnessed an increase of 8 per cent, with the opening of Novotel (251 keys), Formule 1-Hinjewadi (105 keys), Courtyard By Marriott-Chakan (180 keys), Doubletree by Hilton-Chinchwad (115 keys), etc. Pune currently has a total upcoming supply of 2,853 keys, of which 40 per cent is in the mid-scale segment, 20 per cent is in the luxury property segment, 18 per cent in the upper upscale segment, 13 per cent in the budget segment and 9 per cent in the upscale segment. During 2014, almost 24 per cent of the total supply are expected to open, with brands such as Hyatt Place (130 keys), Lemon Tree Pune City Centre (230 keys), Country Inn, Suites (230 keys), etc.