Slowdown in economic growth notwithstanding, the hospitality industry is confident of 13-15 per cent annual growth over the next five years, banking upon surge in business travel and expansion in number of hotels in the country.
Hotel majors such as ITC, Starwood and Berggruen are out to woo business tourists by betting big on the low-to-mid segments, a category which is expected to grow higher than the industry rate. The growth in the Indian hospitality sector will outpace that in the overall global hospitality sector, according to industry leaders and analysts.
ITC plans to double its room count in next seven years, said SC Sekhar, senior executive vice-president, hotel division, ITC. “Our country’s growth projection is 6.9 per cent for 2011-12, so what if it is not 8 per cent. We are still far ahead of many other destinations,” Sekhar said at the state tourism seminar on Saturday.
ITC that started hotel business in 1975 operates and owns over 100 hotels in India in 18 cities and will open at least three hotels in next few years. Sekhar added that ITC does not plan to foray overseas as it plans to meet demand for hospitality services in the country.
Same is the story of Mumbai-based Berggruen Hotels that plan to cash in on growing demand by opening 10 more hotels in next three years, the chain’s managing director and CEO, Sanjay Sethi said. The company at present operates around 30 hotels.
The story is no different with US-brand Starwood that is gearing up to operate about 100 hotels in India through management contracts. “We are currently operating 33 hotels in the country and the number will increase to 50 by 2015. By then, another 50 hotels projects will be on course,” said Dilip Puri, managing director (India) and regional vice-president (South Asia), Starwood Asia Pacific Hotels and Resorts.
The Lemon Tree Hotel Company that owns 18 hotels in mid-market segment also announced that it aims to be the second largest asset owner in the country in hospitality sector if one were to go by Rahul Pandit, president and chief operating officer, The Lemon Tree Hotel Company. At present, it claims to be fourth largest asset owner in hospitality business in the country.
“Globally, the penetration rate of hotel rooms is 28 per 1,000 people. In India, it is much lower at 1 per 1,000 people. There is huge room to grow in mid-scale segment. In the next couple of years, we plan to go public with an IPO (initial public offering),” Pandit said.
Other global hotel chains such as Marriot and Carlson also plan to expand in India. Marriot plans to introduce its mid-segment Fairfield brand the year end while Carlson will add 19 more hotels in the country, taking its total count to 50.
“About 13 to 15 per cent growth is expected in hospitality sector over long term in India. The growth in the mid-segment will be higher and ultra-premium segment will be smaller. However, the realisation of sustainable growth depends on expanding infrastructure and better managing of talent,” said Timmy S Kandhari, leader (hospitality and leisure practice), PwC India.
The global consultancy firm also released a hospitality report on Saturday based on interactions with 20 top CEOs of the hospitality industry in India, which pointed out that revenues from business travellers will grow significantly over next few years followed by meeting incentive conference and exhibition segment (MICE) segment and lastly from leisure travelers.
Hotel majors such as ITC, Starwood and Berggruen are out to woo business tourists by betting big on the low-to-mid segments, a category which is expected to grow higher than the industry rate. The growth in the Indian hospitality sector will outpace that in the overall global hospitality sector, according to industry leaders and analysts.
ITC plans to double its room count in next seven years, said SC Sekhar, senior executive vice-president, hotel division, ITC. “Our country’s growth projection is 6.9 per cent for 2011-12, so what if it is not 8 per cent. We are still far ahead of many other destinations,” Sekhar said at the state tourism seminar on Saturday.
ITC that started hotel business in 1975 operates and owns over 100 hotels in India in 18 cities and will open at least three hotels in next few years. Sekhar added that ITC does not plan to foray overseas as it plans to meet demand for hospitality services in the country.
Same is the story of Mumbai-based Berggruen Hotels that plan to cash in on growing demand by opening 10 more hotels in next three years, the chain’s managing director and CEO, Sanjay Sethi said. The company at present operates around 30 hotels.
The story is no different with US-brand Starwood that is gearing up to operate about 100 hotels in India through management contracts. “We are currently operating 33 hotels in the country and the number will increase to 50 by 2015. By then, another 50 hotels projects will be on course,” said Dilip Puri, managing director (India) and regional vice-president (South Asia), Starwood Asia Pacific Hotels and Resorts.
The Lemon Tree Hotel Company that owns 18 hotels in mid-market segment also announced that it aims to be the second largest asset owner in the country in hospitality sector if one were to go by Rahul Pandit, president and chief operating officer, The Lemon Tree Hotel Company. At present, it claims to be fourth largest asset owner in hospitality business in the country.
“Globally, the penetration rate of hotel rooms is 28 per 1,000 people. In India, it is much lower at 1 per 1,000 people. There is huge room to grow in mid-scale segment. In the next couple of years, we plan to go public with an IPO (initial public offering),” Pandit said.
Other global hotel chains such as Marriot and Carlson also plan to expand in India. Marriot plans to introduce its mid-segment Fairfield brand the year end while Carlson will add 19 more hotels in the country, taking its total count to 50.
“About 13 to 15 per cent growth is expected in hospitality sector over long term in India. The growth in the mid-segment will be higher and ultra-premium segment will be smaller. However, the realisation of sustainable growth depends on expanding infrastructure and better managing of talent,” said Timmy S Kandhari, leader (hospitality and leisure practice), PwC India.
The global consultancy firm also released a hospitality report on Saturday based on interactions with 20 top CEOs of the hospitality industry in India, which pointed out that revenues from business travellers will grow significantly over next few years followed by meeting incentive conference and exhibition segment (MICE) segment and lastly from leisure travelers.
Source : mydigitalfc.comCrosswoods holidays 2011
absolutely!!! there are many Star Hotels diversifying focus to tier 2 cities. Some MNCs focusing the upcoming cities also a major reason for this diversification. The economic growth and shuffles dint much affected the travelers to go out, so we can hope for the best growth.
ReplyDeleteThanx for sharing this post. Indian service industry is growing very fast. This industry has shown tremendous growth in the recent past years. Where India is facing slowdown Industrial production. This industry is showing good sign of growth in the coming years.
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