The hospitality spread laid out for the year ahead was cooked up for the most part, or so this downturn is set to show.
The hospitality spread laid out for the year ahead was cooked up for the most part, or so this downturn is set to show.
Going by industry estimates, nearly 600 new hotels were planned or under various stages of development across the country, for commissioning over the next year or so.
However, the number that actually materialises might at best be half of that, it seems now.
While plans for 150 new hotel projects have been completely dropped, as many as 18,000 guestrooms across 150 other hotels are up for sale. These properties are under various stage of construction, including projects that are about to start, half-built, cold shells and finished.
“Around 150 hotel projects have just disappeared because of tall claims made primarily by the real estate companies. Then there are another 150 properties which are on the block. So realistically speaking, just around 300 new hotels are actually being built,” Manav Thadani, managing director of hospitality consulting firm HVS International-India, told DNA.
Experts say companies which had entered the business to make a quick buck are the ones exiting the business, as they are feeling huge financial pressure in their core business.
In August last year, HVS had released its Trends and Opportunities report, which analysed the supply pipeline for different India cities. The report said approximately 1,14,000 rooms were being planned across the country, of which 58% would actually materialise —- that works out to 66,120 rooms (58% of 114,000).
“We have gone back and done that survey all over again and the figures are startling,” said Thadani.
The new numbers, to be unveiled today at the two-day Hotel Investment Conference South Asia, reveal a different scenario. According to them, around 84,000 rooms are being planned, of which 61% or 51,240 rooms might materialise. That’s a drop of 14,880 rooms, or 22.5%, from the estimate made last year.
Officials of other hospitality consulting firms, including Knight Frank India, Mahajan & Aibara, Cushman & Wakefield, support the HVS survey findings.
“There are a lot more transactions happening these days. In fact, we are working on multiple asset portfolios on an exclusive basis for the Indian market,” said one of the consultants.
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