HICSA 2007

Presentation

India Outlook 2010

Manav Thadani, Managing Director, HVS Hospitality Services

To make most of the current boom in the Indian hospitality, investors and hoteliers enrolled themselves for the Hotel Investment Conference - South Asia (HICSA) held on April 4 - 5, 2007. Manav Thadani, managing director of HVS Hospitality Services, in his presentation 'India Outlook 2010' laid down hard facts from the research conducted by HVS.

The research was conducted to find out the eight top markets and the eight emerging markets based on the following parameters - rate potential, demand growth, product orientation, infrastructure, site availability, replacement costs, induced demand and new supply risks. He also pointed out that alternate hospitality will be the most emerging market in the near future.

According to the report, Mumbai, India's commercial capital, has jumped one level to achieve the top position in the list of top eight cities for hotel investment in India. But the last year's most promising destination, Hyderabad, has slipped to the third place this year as leisure destination Goa claimed the second slot. Delhi, Chennai, Jaipur, Bangalore and Kolkata followed in that order. "Mumbai has bounced back and shows very strong signs of a very attractive hospitality market in the country. While there is considerable supply coming into the city in the next three to five years, the room rates will continue to increase," said Thadani.

The top eight emerging markets in South Asia, according to the ratings in sequence are Lahore, Islamabad, Ahmedabad, Pune, Vizag, Cochin, Chandigarh, and Bhubaneswar and Mysore getting the same points.

Thadani added, "There are close to 100 hotels under various stages of development in the Delhi market and we estimate these developments to add between 22,000 and 30,000 hotel rooms in the National Capital Region. The said inventory will be up on time to meet the demand for Commonwealth Games in 2010." But he warned, "The aspect of oversupply might start surfacing post 2010 and that is something hoteliers will have to keep in mind before setting up properties in Delhi." On bridging the demand-supply gap he advised the investors, "All investments and projects will have to be made keeping human resources, infrastructure, brand availability, positioning, land values and interest rates in mind."