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August 2011
Disclaimer
This report is prepared in accordance with our findings on the Hospitality Industry in India. This
report has been prepared on the basis of desktop research conducted from 22 Aug to 26 Aug
2011. Because it’s a sample report created for business development purposes, our report may
not be suited for any purpose other than to assist you in your evaluation of our research
capabilities. Additionally, our report reflects events and circumstances as they currently exist.
We have not independently verified the information gathered or contained in this report
and, accordingly, express no opinion or make any representations concerning its accuracy or
completeness.
Our report is for your information only and should not be quoted, referred to or transmitted to
another party, in whole or in part, without our prior written consent.
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Hotel industry is expected to grow from USD 16.7 bn to USD 30.7
bn at 26% CAGR between 2008-13
Indian Hospitality market size (USD bn)
The Indian hospitality industry is one of the fastest growing
Restaurant sector 26% CAGR 12% CAGR
Hotel sector sectors of the Indian economy; except for a short phase the
Total Hospitality
38.8 during recession and the terrorist attacks in 2008 and 2009
2008 2009 2010 2013 In 2010, 30% and 16% of the Indian hotel and restaurant
Incentives by Central and the State Strong economic growth Hosting major sporting events
governments
GDP growth of 9% p.a. in 2010. International sporting events like
Elimination of Customs Duty on Forecasted to grow at a rate of Formula One race in the National
import of raw 8.7% p.a. till 2016 thereby enabling Capital Region (NCR) in 2011 are
materials, equipment, liquor etc hospitality sector growth set to boost hospitality
Fringe Benefit Tax exempted on Increasing FDI inflow Demand-supply imbalance
crèche, employee sports, guest
FDI inflow increased due to Ministry of Tourism estimates a
house facilities
allowance of 100% FDI and better shortage of 0.15 mn hotel rooms
Five year income tax holiday granted infrastructure availability in 2011, of which two-thirds are
to 2-4star hotels established in in the budget category Indian
Increasing tourist arrivals
specified districts having UNESCO-
declared 'World Heritage Sites Hospitality sector handled 5.58 mn
Rising income and spending Hospitality
Exemption of Luxury Tax and Sales
international tourists arrivals(8.1% Rising disposable sector
Y-o-Y growth) and 740.21 mn incomes, cheaper
Tax for 5-7 Years for new projects
domestic tourists in 2010 (10.7% Y- airfares, changing consumer
Government’s open sky policy has o-Y growth) lifestyle and ease of financial
boosted number of passengers in transactions leading
India tourism campaigns
India
The “Incredible India” and “Atithi
Introduction of Medical or M-VISA to
Devo Bhavah” campaigns have
boost medical tourism
improved foreign tourist outlook
for India
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Source: Technopak Report “Dissecting the Indian Hospitality Industry” 2009, TCFI Report “Hospitality in India”, Oct. 2010
… rising occupancies and RevPAR, post 2008-09, indicates signs of
recovery in the hospitality sector
Occupancy levels(%), Average Room Rate (USD) and
Hospitality industry in India witnessed a sharp downfall in its
RevPAR* (USD)
revenues in 2008-09 and 2009-10 as traveler volumes contracted
Average Room Rate
RevPar due to the economic downturn and the terrorist attacks in
Occupancy levels Mumbai, India
200 75%
5.58
5.08 5.28 5.17
4.45
A tax rebate equal to 100% of the profit and gain for the first 5 consecutive years to an hotel in specified areas, if such hotel / convention
centre is constructed and has started operations before 31st July, 2010
A tax rebate equal to 100% of the profit and gain for the first 5 consecutive years to an hotel located in the specified district having a
World Heritage Site and has started functioning before 31st March, 2013
Finance Bill 2009, which has proposed to abolish Fringe Benefit Tax with effect from 1st April 2009 has become major advantage to the
Hospitality industry
Crowne Plaza
Luxury, mid- Holiday Inn
Plans to operate 45 new hotels by
segment and Holiday Inn Express
2015
business Hotel Indigo
Staybridge Suites
Candlewood Suites
Carlson Radisson Hotels and Resorts
Luxury, business, Plans to increase its presence in India
Park Plaza
economy and to 78 hotels by 2012, from 28 in
Country Inns & Suites
cruises 2009
Park Inn
Indian Hotels Luxury, mid- Taj, Gateway Plans to construct 50 budget hotels
segment and Vivanta under the Ginger brand over the next
budget Ginger four years
ITC Welcome group ITC Hotel – Luxury Collection
NATIONAL PLAYERS
Luxury, budget Welcome Hotel – Sheraton To invest USD 2,000 mn over next
and heritage Fortune few years
Welcome Heritage
EIH Plans to develop 750 additional hotel
Business , leisure Oberoi
rooms under the Trident brand over
and cruises Trident
the next 2.5 years
The Leela
Luxury and Leela penta Expected to add 349 more rooms in
heritage Leela palace 2012
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Source: TCFI Report “Hospitality in India”, Oct. 2010
Hence, hotel room supply is expected to grow at 15% CAGR surpassing
demand which is estimated to grow at 10.3% CAGR during 2010-13
Indian Hospitality Market : No. of Keys * (2010-13) Room demand distribution in top 10 cities (2013E)
Demand Supply Mumbai
11%
NCR
53,412 66,487 75,967 81,296 3% 24%
Pune
32,660 9% Ahmedabad
35,503
38,789 43,828 Goa
4%
Chennai
2010 8% Jaipur
2011 F
2012 F 24% Bengaluru
2013 F 7%
3% 6% Kolkata
(*) Note: Number of keys :The number of guest rooms in a hotel
Hyderabad
Upcoming room supply (2010-2013)
Economy The Indian government through Budget 2011-12 has proposed
Midscale several measures that will increase investment into hospitality
13,075
Upscale sector and accelerate the process of development
Total Rooms 1,087
9,480 The huge influx of incremental rooms will result in the occupancy
8,092 2,363
levels of hotels for most of the cities falling considerably except
684
543 Mumbai and Goa during 2010-13
5,330
1,835 3,231
9,625 743 Despite a similar quantum of room demand in Mumbai and the
1,280 NCR in 2013, the size of Mumbai market, at USD 930 mn, will be
5,714 5,565
3,307 substantially greater than the NCR market size of USD 620 mn
Loca -vore: Local cuisines concept that believes in maximizing Local cuisines in
benefits to cultural heritage will be adopted in F&B F&B
Growing Importance of healthy and organic food will result in Healthy & Organic
its introduction in the menus of all day dining and multi Foods
cuisine restaurants
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Source: HVS Report “Hotels in India- Trends and Opportunities 2010”, Oct. 2010
Contact Details
Ms. Nibha Kaul, CEO
Email: nibha.kaul@sumoresearchsolutions.com
Mob: +91-98192 13030
URL: www.sumoresearchsolutions.com
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