Latest Property News on 'Hotel Industry in India'

DB Group Plans Rs 5,500 cr Investment to Build 9 Hotels across India by 2014

DB Hospitality, part of the Mumbai- based real estate developer DB Group, will invest around Rs 5,500 crore to build nine hotels across India by 2014, a top company official said. “We plan to have a minimum of 12 properties by 2014. We plan to set up nine more hotels by then at an investment of Rs 5,500-crore,” DB Hospitality’s CEO Julian Groom told PTI here. The company has three properties–Le Royal Meridien in Mumbai, Le Meridien in Ahmedabad and one property in Rajasthan, currently shut down for refurbishment.

Groom said the company has tied-up with Hyatt International to set up five hotels–Park Hyatt (125-storeyed iconic India Tower) in Mumbai, Grand Hyatt in Goa and Pune, Hyatt Place in Hinjewadi, Pune and Hyatt Place in Mundra, Gujarat. Besides, the company is setting up four hotels in Delhi’s hospitality district, expected to be ready by end-2013. The company is eyeing private equity investment to part-fund its expansion and is already in talks with a few firms, he said, without, however, disclosing further details. “We will fund the remaining requirements through internal accruals and bank-loans,” Groom said.

Hotel Royal Orchid Enhances its Investment

The worst seems to be over for the Indian hospitality industry. Nothing illustrates this better than the turnaround in the fortunes of Bangalore-based Royal Orchid Hotels. With four properties in the IT city, it was one of the many hotel stocks which fell when the Indian IT industry began to face headwinds in 2008. In the past one year, however, the stock has managed to beat the Sensex , though not by a very wide margin. The stock has generated a return of close to 80% since the beginning of the current year against a 70% appreciation in the Sensex during the period.

With factors such as a revival in business travel , concerns over security ebbing and start of the peak holiday season , hotels are seeing rising occupancy levels. Being an upcoming player in the hospitality industry, Royal Orchid Hotels has not been untouched by these developments. In January, occupancy levels at the company’s properties had fallen to as low as 30%. They subsequently improved to 70% by the end of November this year. Its average room rate during the period jumped from Rs 3,500 per night to Rs 4,700-4 ,800 levels. With the upswing in business, the company seems to be stepping up its investment. Read More »

MGM Mirage to launch Luxury Hotel Brands in India

MGM Mirage, the Las Vegas Strip’s largest casino owner, is entering India with non-gaming luxury hotels as the struggling gaming and hospitality giant turns to emerging markets like India and China to get over the recession blues. “India is one of the fastest growing regions for both business and leisure travel. In the next few months, we would launch two of our brands — Bellagio and MGM Grand — in the country,” said Rishi Kapoor, vice president (development), India, at MGM Mirage Hospitality, the non-gaming hotel business of the second largest gaming in the world. “We are in advanced stage of talks with developers for the same,” he added.

While Bellagio is positioned as the super luxury brand, MGM Grand is positioned a tad lower. The company will also bring in a third luxury hotel brand, Skylofts. The company is already pursuing development opportunities in select locations across the country, Mr Kapoor said. “We have identified several cities such as Delhi and the National Capital Region, Mumbai, Hyderabad, Bangalore and Chennai and leisure destinations in Kerala, Goa and Rajasthan to establish these brands.” MGM Mirage, however, will keep its investments minimal by going in for the management contract business model to bring in its brands of hotels. Read More »

Commonwealth Games will Boost Hotel Industry Business

The Commonwealth Games would be a good opportunity to showcase the rich cultural heritage of the state to the international community more so with the Union government aggressively promoting the Golden Triangle circuit. In a bid to boost Jaipur for the Commonwealth Games, the parliamentary standing committee on transport, tourism and culture, had recommended tax incentives for hotels in Jaipur like those applicable for hotels in the National Capital Region (NCR).

The report laid emphasis on the development of trains and airlines, especially international flights, and also for roping in the private sector for development of better tourist packages. In fact, the state government also informed the committee on its willingness to provide land free for the construction of Kota and Ajmer Airports. The report also stated that the other tourism initiatives taken by the state consist of framing a proper tourism policy and promoting golf, resorts and spas. Read More »

Hotel Industry Unites for delicensing

The hospitality industry in India has been one of the first sectors to recover from the global economic slowdown. Hotels, in metros across the country, have witnessed an increase in occupancy since September, with Mumbai hotels recording occupancy as high as 65%. With a complete recovery expected in 2010, hoteliers now want the hotel industry to be delicensed for further growth.

“There are about 104 licenses required to set up a hotel in Maharashtra and it takes up to 2 years to obtain the licenses. This increases the cost of the project,” Suresh Talera, president, Hotel and Restaurant Association of Western India (HRWAI), said. “We plan to request the government to reduce unnecessary licenses and to implement a single window system.” Read More »

Hotel Industry Seeks Reduction of Tax

Hotel and restaurant players who are braving a series of setbacks caused by the global economic slowdown, the Mumbai terror attacks and the H1N1 virus scare, are demanding that the centre and states take a fresh look at both the nature and level of taxation for the hospitality sector. Speaking at the All India Convention of Hotels and Restaurants in Thiruvananthapuram on Monday, South India Hotels and Restaurants Association of India (SIHRA) president MP Purushothaman said a streamlining of taxes as well as a reduction of tax levels was required to reinvigorate the hospitality sector in the country.

He said that state governments ought to appreciate the hotel industry’s role in employment generation and forex earnings, and therefore consider it appropriate to confer the status of industry for the sector, to stabilize the sector’s growth. Mr Purushothaman said that state governments in the south should ideally “promote and market the South as one region with diversified tourism products”, and that the state tourism departments should work together in a fashion that would facilitate hassle-free intra-region travel for tourists. Read More »

Duet Hotels to Pump in $500 to Expand its Hotel Business

Duet India Hotels, a Delhi-based real estate investment company with interests in the development of hospitality assets in India, will invest $500 million (Rs 2,300 crore) over four years to build 5,000 hotel rooms in the country. The company, which will invest in both mid-scale and entry 5-star (as opposed to luxury 5-star, another sub-segment) properties, has tied up with New York-based Starwood Hotels & Resorts Worldwide to develop its hotels, to be run under the brand name of Four Points by Sheraton.

Likewise, Duet aims to join hands with other international hotel players to launch their brands in the country. It is thus in talks with a host of hotel chain operators. “Apart from a handful of domestic hotel brands, in India there is a sheer lack of presence of any international brand name within the mid-scale segment,” said Dilip Puri, CEO. Read More »

NCR Hotels Increase Tariff as Business Recovers

It’s proving to be a cracker of a Diwali for Delhi’s hotel industry that had been reeling under the impact of global recession and had seen a sharp erosion in occupancies and tariffs since last year. With the economy gradually recovering and industry expecting a significant increase in inbound travel this winter, hotels have hiked tariffs by 15% to 25% for this peak travel season. As a result, five star tariffs — that had fallen to an unprecedented low of Rs 6,000-8,000 this summer — are now upwards of Rs 12,000 as hotels try to make up for the business lost since early last year.

The newly opened Leela Kempinski, Gurgaon, — which since opening this summer has emerged as the luxury hotel with the highest tariff in the NCR — has raised room rates by Rs 2,000 and suites are dearer by Rs 5,000-10,000. According to the online published tariff, room rates have gone up from the summer range of Rs 19,000-26,500 to Rs 21,000-28,500 now. Federation of Hotel and Restaurant Association of India (FHRAI) vice-president Rajendra Kumar said on an average, tariffs have gone up by 25%. Read More »

UK’s Premier Inn to open its First Hotel in Bangalore

Premier Inn, the UK’s largest hotel chain, is popular among international travellers as a budget hotel. But in India, where it will open its first hotel in Bangalore early next month, Premier Inn is pitching itself as a value-for-money mid-market brand. “In India we realised that the consumers’ connotation of a budget hotel means something that might not offer quality. So we decided to term ourselves as value for money mid-market hotel brand,” says Aly Shariff, managing director of Premier Inn, which plans to build 80 hotels across the country for an investment of 300 million pounds.

It’s not an exception, though. As a rule, most international hotel chains are positioning themselves higher than their global equity in India, thanks to the country’s peculiar business model for building and running hotels that just can’t survive here without restaurants and banqueting facilities. For example, Park Inn, an international three-star hotel chain belonging to the US-based Carlson Hotels Worldwide, is branded as four-star hotel in India. “Mid-market hotels in the western countries do not have elaborate food and beverages options or room service since people tend to be select service hotels. But in India, food and beverages contributes significantly to the overall hotel revenues and so most international mid-market brands tend position themselves as 4 star,” says Ajay Bakaya, executive director of Sarovar Hotels & Resorts that runs Park Inn and Park Plaza hotels in India under a franchisee agreement with Carlson. Read More »

Indian Hotel Industry Plans to Add 55,000 Rooms in 4 years

The Indian hotel industry will almost double the number of rooms from the current levels in 3-4 years by adding an estimated 55,000 rooms, as per a study by consulting firm HVS India. The development of new rooms is going to be led by regional real estate players and hospitality firms as most large real estate developers have abandoned or scaled down their expansion plans. The study revealed that fewer new rooms were announced last year but developers started work on a higher proportion compared to 2007-08.

Of the 94,115 rooms announced by various hotels and real estate developers for the year ended March 2009, 60% of the rooms saw some active development. Compared to this, in the previous year (April 2007-March 2008) companies announced plans to build over 1.14 lakh rooms of which 58% saw actual development. “Despite the economic downturn, Indian hospitality will see the maximum development of rooms in the next 3-4 years. The rate of development of rooms would be much higher, something that we have not seen in the past ten years,” said Manav Thadani managing director at HVS India. Read More »