Category Archives: Hotels

Asia Pacific hotel performance for 2019 by STR states that Delhi hotels have recorded its fifth consecutive year of RevPAR growth (8.5% to Rs 4801.75), and the absolute occupancy level was the market’s highest for any year since 2007. STR analysts point to a 7.1% jump in demand as the driver of that performance. November was the strongest month of the year for RevPAR growth due to the Diwali festival calendar shift from November in 2018 to October in 2019. Occupancy: +4.9% to 73.0% ADR: +3.4% to INR6,581.95 RevPAR: +8.5% to INR4,801.75

Martin R. Smura, CEO, Kempinski Hotels and Chairman of the Management Board, says,”India is a very dynamic market and offers enormous potential for future growth in the hospitality sector. Our plans are to intensify our efforts to bring Kempinski back on the Indian sub-continent. India is a growing market to us where we see huge potential for future growth for outbound travellers. Several of our hotels already enjoy a strong wedding business from India. We tapped into the market last year and opened a Global Sales Offices in partnership with Nijhawan Group. Since 2018, we see very promising results with revenue from the Indian market increasing by 30%.  

Explaining the group’s plans for 2020, Pradipta Mohapatra, Asst. Vice President (Sales & Marketing), MAYFAIR Hotels & Resorts, says, “We will be opening a tea resort in Siliguri this year. Other projects in the pipeline include a 252-key five-star deluxe property in Kolkata- the work for which is also underway, and we plan to make it operational latest by early 2021. We are also in process of establishing a Golf Resort in Satapada region of Puri, Odisha, wherein our group will be investing Rs 125 Crores. It will be a Five Star Deluxe property featuring facilities like helipads.

According to a recent report by HVS, India ranks amongst the countries with the highest cost of capital for the hospitality industry. Lending norms for the industry are extremely stringent with interest rates ranging between 11% and 14% for borrowings as against an average of 4% to 5% in most developed economies. Given the higher cost of servicing debt, the quantum of debt available to the sector averages at 50% of the total project cost further restricting the capital available for hotel development. And finally, the cherry on this cake is the short tenure for repayment of debt which averages at circa 10 to 12 years including the construction period moratorium. Assuming a three-year construction moratorium and a three-year period for hotel revenues to stabilise, the effective repayment term ranges from 4 to 6 years causing severe stress on hotel owners and operators. Given the cyclical nature of the business, if the hotel enters the market in a down cycle phase, it is almost certain to head towards becoming an NPA as has been evident from the last cyclical downturn.

After overcoming a major civic and tourism infrastructure challenge post Cyclone Fani, Odisha Tourism is looking to prepare a blueprint for developing its most-visited tourist destinations with a focus on creating a land bank for hotel projects. Vishal K Dev, IAS, Secretary, Odisha Tourism, said, “One of the challenges that Odisha Tourism faced was creating a land bank for developing premium tourism and hospitality infrastructure. We are looking to consolidate an investment-ready land bank of over 2,000 acres for the sector in the coming years.” He added that this plots of land will be identified near all major touristic sites. Land banks will be created in areas close to Chilika, Bhitarkanika, Similipal, Hirakud, Satkosia and sea coastline. Dev added that the tourism board had already developed and launched its Marine Drive Eco Retreat at the Ramachandi Beach near the grand Konark Sun Temple. “It has been developed as an environmentally sustainable model incorporating best practices in material utilisation, zero liquid and sewerage discharge and holistic waste management. It has been envisioned as eastern India’s first glamping set up. Scheduled from 14 December 2019 to 31 January 2020, the Eco Retreat is a unique experience of glamping in 50 luxury cottages along with adventure and water sports activities. We plan to replicate the Eco Retreat model at suitable times of the year on prominent beach stretches along our 482 km coastline, each having its own unique experience,” Dev added.

Twenty14 Holdings, hospitality investment arm of LuLu Group International, is developing two high-profile properties in Bengaluru at an investment of Rs 800 crore that will open in 2020 and 2021, respectively. Adeeb Ahamed, Managing Director, Twenty14 Holdings, says, “We currently have three projects in India, one of which is already operational – the first Tribute Collection by Marriott called Port Muziris in Kochi. The other two are brownfield projects under development in Bengaluru – one is near the airport and the other is in the Electronic City. One of them will be ready by 2020 and the other by Q1 2021.” The two Bengaluru properties are at a combined investment of up to Rs 800 crore, Ahamed reveals while the one in Kochi was at an investment of Rs 52 crore. “We are looking to expand in India and are in final stages of negotiations for other projects across India. We are looking at one resort property and one hill station property but we haven’t finalised yet. We are also looking at Dharamshala and Hyderabad as potential destinations,” he shares. Twenty14 Holdings was established in 2014 and aims to become a billion-dollar investment company by 2025. It is an asset-heavy hospitality investment arm of LuLu Group International and already has a few properties operating in different parts of the world. It is now planning to expand further in India and is looking for appropriate hospitality partners.

Sarovar Hotels and Resorts has announced its Eco-friendly initiative in collaboration with MakeMyTrip towards sustainable and responsible tourism in partnership with MakeMyTrip Foundation, a public charitable trust that supports sustainable tourism. On every stay at Sarovar Hotels booked through MMT website, the hotel will contribute Rs.5/- in addition to that an identical contribution requested from guests, which will then be used towards sustainable tourism and betterment of ecological balance. Anil Madhok, Executive Chairman, Sarovar Hotels, says “We are delighted to partner with MakeMy Trip for such a great initiative and will do our utmost to contribute to sustainability through adopting a proactive environmental policy. We are conscious of the world we’ll leave behind for future generations”.

The existing supply in Delhi is expected to experience an increase of approximately 768 keys over the next 1-2 years, reveals JLL’s report titled Delhi NTR-Charting Delhi’s Tourism Potential. Delhi currently has a total room inventory of 16,912 rooms, spread across more than 80 branded hotels. Although the growth of new supply is moderate with Delhi’s position as a mature and established hospitality market, there are ten hotels in various stages of development, which are expected to add more than 1,800 keys over the next 3-4 years. The bulk of the upcoming supply coming from the Upscale segment and luxury segment.

Talking about the group’s aggressive growth in the Indian market, Ajay Bakaya, Managing Director of Sarovar Hotels & Resorts, said “We are looking forward to open around 10-15 hotels in 2020 and I hope to crack 100-hotel mark by the end of this year. As far as our international growth is concerned, I think Middle East is where Sarovar wants to be for the simple reason, I can source business and talent from both Africa and India.” Some of the locations where Sarovar will open its properties include Greater Noida, Dalhousie, Latur, Udaipur, Panipat, Bodhgaya etc.

HVS Ease of Doing Business report has revealed that around 70 licences & approvals are needed to open and operate a hotel in India, while only 45 are required in China. However, in Singapore, only 26 licenses and approvals are needed for opening and operating a hotel. The study states licensing requirements in other countries are not as complex as in India. The number of licences needed to operate a hotel in India are far too many and vary across states.