Indian hotel rooms market to touch Rs 119 bn by 2013

Presently, the market in these cities stood at Rs 74 billion, according to a study released today on the country's Hotel Market by Knight Frank India.

Among the cities, Mumbai followed by Goa is likely to be the most attractive hospitality markets in the country for during 2010-13.

The main drivers for this are mainly the strong GDP growth and the rising activities in the banking and financial services and insurance (BFSI) and Information and Technology sectors, Knight Frank India National Head - Research and Advisory Services Samantak Das told reporters here.

However, the report said that the hospitality market is likely to witness an over supply of rooms as compared to demand in the next three years.

The demand is likely to grow by 10.3 per cent, while the supply is expected to grow by 15 per cent during 2010-13.

"A total of 24,211, 8,709 and 3,057 additional rooms are expected to become operational by 2013 across upscale, mid-scale and economy category hotels, respectively," Knight Frank

India National Director – Hospitality Agency - Shreenath Shastry said.

The study has taken both the demand and supply scenario of the hotel industry of 10 major cities like Ahmedabad, Bengaluru, Chennai, Goa, Hyderabad, Jaipur, Kolkata, Mumbai, National Capital Region and Pune.

Presently, the total number of rooms available in all the three categories are 53,412, he said.
Similarly, the study said, this high supply will lead to considerable fall in the occupancy level in all three categories of hotels, except in Mumbai and Goa.

In Mumbai and Goa the demand will surpass supply. City wise the demand in Mumbai will grow by 24 per cent, while the supply segment will rise by 16 per cent.

Similarly, in Goa the demand will grow by 7 per cent while the supply will be 6 per cent.

Rooms demanded per day estimated to grow at an average annual growth rate of 13.9 per cent for upscale hotels and 9.3 per cent for midscale and economy hotels in the western suburbs of the financial capital of the country, it said.

Occupancy level in Mumbai might reach 84 per cent in upscale hotels and 76 per cent in midscale and economy hotels by the end of 2013.

Total 2,843 rooms are expected in upscale and midscale categories hotels in Mumbai, of which 1,797 rooms might be added in the western suburbs by the end of 2013, the study added.