Indian Hotel industry registers growth


India’s hotel industry has shown robust growth in the fiscal (2011-2012) till November, notwithstanding the global and local economic slowdown, reporting continuous revenue-per-available-room (RevPAR) growth and the hotel inventory is expected to add another 61,000 rooms in the next three years, according to a survey.

Based on the market survey by STR Global, the global market watch on hospitality industry, India's hotel industry showed overall revenue growth in 2011. "India, with a population over 1.2 billion and a growing economy, is allowing the Indian hotel market to prosper as hotel brands continue to expand their portfolio in the main cities and in the regions," says Elizabeth Randall, managing director for STR Global. "Our partnership with Horwath HTL-India will help us to better assist our existing and future clients across India and provide more market visibility for international and national operators and investors alike,” she adds.


The year-to-date (YTD) hotel performance results showed that all major regions, with the exception of Kerala and Maharashtra, reported continuous revenue-per-available-room (RevPAR) growth with Goa reporting an eight percent increase. Looking at the hotel pipeline, India's hotel inventory is expected to increase by more than 61,000 rooms in the next three years with over 30,000 rooms currently under construction based on STR Global's pipeline database.

The central region of Madhya Pradesh reported the largest RevPAR growth (+19.0 percent), led by a 12.7-percent increase in occupancy YTD, the report points out, adding, the neighbouring regions of Uttar Pradesh and Rajasthan saw RevPAR increase by 10.8 percent and 3.3 percent, respectively, driven by increased average daily rate in Uttar Pradesh of 2.8 percent to Rs 5,527.43, whilst occupancy rates in Rajasthan increased by 6.8 percent to 40.8 percent during the same period. 

In Kerala and Maharashtra, occupancy and ADR growth declined moderately YTD when compared to the same period last year. Demand in Kerala, following strong growth between 2009 and 2010 (16.3 percent), remained flat at 0.7 percent between 2010 and 2011. In Maharashtra, demand growth jumped by 10.6 percent YTD compared to a negative trend between 2009 and 2010.


RevPAR grew across most Indian cities, with the exception of Chennai (-1.1 percent) and Delhi (-10.6 percent). Chennai's demand and supply increased almost in equal measures (6.0 percent and 5.4 percent, respectively) making it more difficult to hold average room rates. Delhi reported the highest supply growth (+13.0 percent) of the cities for the period. Likewise, Jaipur and Bangalore experienced stronger new supply growth compared to demand and saw their occupancy decrease YTD.

Leading the best performing markets in terms of RevPAR growth, Goa reported an 8.0 percent RevPAR increase, led by year-on-year demand growth of 4.1 percent. Second was Mumbai with the highest ADR of all Indian cities sampled at Rs 8,450.84. This financial capital also saw demand growth reaching 9.1 percent.