With increasing demand for affordable business hotels in India, major hotel chains across the world are all prepared to open their business in the country.
Presently, when the hotel industry is struggling with declining occupancy levels and slumping average room rates, which are compelling local hoteliers and developers to postpone their projects, global hotel chains are gearing up to enter the hotel business in India, as reported by Business Standard.
According to experts, there is an increasing demand for budget business hotels during recession. Hotel chains in India have recently made 15% reduction in their prices to draw more and more customers during ongoing economic turmoil. Also, hotels are offering special accommodation packages, daily room rates and discounts to deal with declining occupancy levels.
Companies such as MGM Mirage Hospitality, Langham Hotels International, Wyndham Hotel Group and Corinthia Hotels and Resorts are busy giving final touches to plans of launching their brands in India in the coming couple of years. Hotel chains like Dubai-based Jumeirah Group, Swissotel Hotels and Resorts and Movenpick Hotels and Resorts are also on the verge of finalizing their plans in the country.
Moreover, recession has not affected the expansion plans of hotel chains like Hyatt, Royal Orchid, Accor and Marriott. Hoteliers are viewing this downturn as a regular phenomenon and are anticipating a rebound by 2010-11.
Also, as per the Pacific Asia Travel Association (PATA), Asia-Pacific’s hotel industry could start recovering by end-2009. The latest report from PATA says that Southeast Asia is to see growth in international arrivals, reaching 77 Million by 2011 from 62 Million recorded in 2007.
It is notable that since November 2008, hotel industry in India has been experiencing a slowdown, following the set back in leisure and business travel after the terror attacks on Mumbai. Though, resort destinations like Goa, Jaipur and Kerala have cashed the trend. The occupancy levels and room rates have also been affected by the oversupply in Pune, Bangalore and Hyderabad. Additionally, cost-cutting moves of India Inc contributed to the fall in room rates.
According to a Senior Research Analyst at RNCOS, “Hotels, airlines and travel agents have witnessed hard times with tourist arrivals in the Asia-Pacific region declining towards the end of 2008. Thus, the hotel industry in India has also been registering fewer tourist arrivals. However, signs of revival should appear by the end of Q3-Q4 2009, but the consistency in the business may be seen not earlier than 2010-2011.”
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