By BW Hotelier
THIS YEAR’S edition of the 2015 Hotels in India Trends & Opportunities report by HVS, brings forth a fair measure of cautious optimism. In marginal contrast to last year's publication, the report asserts the view that while the Indian hotel sector has indeed seen growth in both product and performance, it has come in a paced and moderated fashion. One could even draw comparison to the way the newly formed central government began its tenure in 2014 on a high note, and though its one-year performance has not been spectacular per se, it has been steadily moving in the right direction. The report draws attention to the under tones of hope, optimism and positivity in the previous publication; since then, the nation’s hotel sector may not have found reasons for exuberance, but it has certainly been witness to a year that outpaced the preceding one on various fronts.
An essential driver of growth, the Indian travel and tourism industry has emerged as a significant employment generator, a major source of foreign exchange and an integrating factor for the local and host population. The industry has registered prominent growth over the past few year, supported by the rising purchasing power of the traveler, increase in commercial development and foreign tourist arrivals, a growing airline industry and impetus from government-led initiatives. In 2014, the total contribution of travel and tourism to the GDP was Rs 7,642.5 billion (6.7 per cent of total GDP). This is projected to grow by 7.5 per cent in 2015, and eventually reach Rs 16,587.2 billion (7.6 per cent of total GDP) in a decade's time, according to World Travel & Tourism Council's Economic Impact 2015 ’ India report.
In keeping with the outlook presented in the previous edition of this report, the nationwide RevPAR performance was recorded at Rs 3,324 in 2014/15, a sound growth of 1.5 per cent over that of the preceding fiscal year. The nationwide weighted occupancy (60.3 per cent) of hotels grew by 3.4 per cent, corresponding with a marginal decline of 1.8 per cent in the weighted average rate (Rs 5,510). Individually, each star category registered a year-on-year increase in RevPAR, with the hotels in the three-star category recording the highest growth of 3.5 per cent. The improvement in RevPAR is clearly occupancy-led, as the weighted average rates have either declined or remained almost stable across all categories.
The existing rooms supply tracked by HVS in the organized hotel market grew by 11 per cent in 2014/15 over the previous year totaling to 112,284 rooms as of March 31, 2015. This takes into account 9,588 new openings during the year, and the rest are an expansion of the sample set being tracked by HVS. The pipeline for proposed supply totaled 114,466 rooms in 2007/08. With a 139 per cent growth in existing supply since then, the proposed supply was down to 56,270 rooms at the close of 2014/15.
Concluding the report, HVS continues to emphasise the shift towards the mid-market and budget segments across markets. While on the subject of budget and economy hotels, it would be a fallacy to not discuss the development of hotel aggregators in the budget space in the year 2014/15. Recognising the massive unorganised hotel market, companies such as Oravel Stays (OYO Rooms), Zostel Hospitality (Zostel and ZO Rooms), WudStay, FabHotels and Treebo have partnered with standalone hotels and guesthouses in order to provide marketing, distribution and quality assessments to them. Riding on the back of technology and providing App-based convenience to the consumers, these new-age brands intend to consolidate the unorganised hotel market.
The report has been authored by Achin Khanna, MD of Consulting and Valuation at HVS South Asia and Hemangi Bhandari, Associate ’ Consulting and Valuation with HVS New Delhi. The survey was conducted across 872 hotels with a room count of 1,08,452 in 2014/15 across India.
HVS - 2015 Hotels in India_ Trends Opportunities
THIS YEAR’S edition of the 2015 Hotels in India Trends & Opportunities report by HVS, brings forth a fair measure of cautious optimism. In marginal contrast to last year's publication, the report asserts the view that while the Indian hotel sector has indeed seen growth in both product and performance, it has come in a paced and moderated fashion. One could even draw comparison to the way the newly formed central government began its tenure in 2014 on a high note, and though its one-year performance has not been spectacular per se, it has been steadily moving in the right direction. The report draws attention to the under tones of hope, optimism and positivity in the previous publication; since then, the nation’s hotel sector may not have found reasons for exuberance, but it has certainly been witness to a year that outpaced the preceding one on various fronts.
An essential driver of growth, the Indian travel and tourism industry has emerged as a significant employment generator, a major source of foreign exchange and an integrating factor for the local and host population. The industry has registered prominent growth over the past few year, supported by the rising purchasing power of the traveler, increase in commercial development and foreign tourist arrivals, a growing airline industry and impetus from government-led initiatives. In 2014, the total contribution of travel and tourism to the GDP was Rs 7,642.5 billion (6.7 per cent of total GDP). This is projected to grow by 7.5 per cent in 2015, and eventually reach Rs 16,587.2 billion (7.6 per cent of total GDP) in a decade's time, according to World Travel & Tourism Council's Economic Impact 2015 ’ India report.
In keeping with the outlook presented in the previous edition of this report, the nationwide RevPAR performance was recorded at Rs 3,324 in 2014/15, a sound growth of 1.5 per cent over that of the preceding fiscal year. The nationwide weighted occupancy (60.3 per cent) of hotels grew by 3.4 per cent, corresponding with a marginal decline of 1.8 per cent in the weighted average rate (Rs 5,510). Individually, each star category registered a year-on-year increase in RevPAR, with the hotels in the three-star category recording the highest growth of 3.5 per cent. The improvement in RevPAR is clearly occupancy-led, as the weighted average rates have either declined or remained almost stable across all categories.
The existing rooms supply tracked by HVS in the organized hotel market grew by 11 per cent in 2014/15 over the previous year totaling to 112,284 rooms as of March 31, 2015. This takes into account 9,588 new openings during the year, and the rest are an expansion of the sample set being tracked by HVS. The pipeline for proposed supply totaled 114,466 rooms in 2007/08. With a 139 per cent growth in existing supply since then, the proposed supply was down to 56,270 rooms at the close of 2014/15.
Concluding the report, HVS continues to emphasise the shift towards the mid-market and budget segments across markets. While on the subject of budget and economy hotels, it would be a fallacy to not discuss the development of hotel aggregators in the budget space in the year 2014/15. Recognising the massive unorganised hotel market, companies such as Oravel Stays (OYO Rooms), Zostel Hospitality (Zostel and ZO Rooms), WudStay, FabHotels and Treebo have partnered with standalone hotels and guesthouses in order to provide marketing, distribution and quality assessments to them. Riding on the back of technology and providing App-based convenience to the consumers, these new-age brands intend to consolidate the unorganised hotel market.
The report has been authored by Achin Khanna, MD of Consulting and Valuation at HVS South Asia and Hemangi Bhandari, Associate ’ Consulting and Valuation with HVS New Delhi. The survey was conducted across 872 hotels with a room count of 1,08,452 in 2014/15 across India.
HVS - 2015 Hotels in India_ Trends Opportunities
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