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ePaper created 2017-02-14, 09:48:07 | version 1.33.0
hOTELs + rEsOrTs 17 HVS is tracking approximately 3,000 rooms expected to enter the market over the next five years and likely to play a role in shaping the nature of the Kolkata hotel market in future. Due to the micro-market distinction, the impact on existing hotels may be cushioned to some extent; however, it is likely that the city hotels will experience supply pressure. Mumbai Mumbai’s hotel market achieved the high- est occupancy recorded over the past four years amongst all major markets across the country. This continued upward trend in occupancy over the past six years is testament to the inherent strength and robust nature of the market. Additionally, Mumbai also recorded the highest average rate, further consolidating its position as the best performing hotel market in terms of RevPAR too. A closer look at Mumbai’s three micro-markets, namely South, Central and North Mumbai, which have minimal overlap in room night demand, reveals an increase in occupancy and average rates2 in each. Many factors – strong growth in corporate travel, an upswing in MICE demand and the promising growth in the Extended-Stay seg- ment – have favourably impacted Mumbai's hotel market. In the short term, the bulk of the supply is expected to be within the upscale and luxury positioning and that should further assist in raising the overall average rates. In the medium to long term, we expect the Mumbai International Airport Limited (MIAL) landside development that includes several new hotels, commercial and retail complexes and hospitals to change the face of Mumbai at large. However, in the short to medium term, we anticipate certain im- provements in infrastructure – the Coastal Road, extension of the Metro and Monorail and the proposed convention centre in BKC that is expected to augment MICE demand – to assist in hotel perfor- mances. Going forward, HVS forecasts steady growth in the city's performance in the coming years. New delhi New Delhi is home to the largest branded hotel market in the country. Its hotels recorded a year-on-year growth in RevPAR, despite supply pressure, in 2015-16. When considering the self-contained micro- markets in the city, the Aerocity hospitality district saw an increase in occupied room nights driven by growth in Corporate, Transient and MICE demand. The demand previously catered to by the unorganised sector in the area has been absorbed by the branded mid market and budget hotels located within the district. On the other hand, Central, South and East Delhi hotels dipped their average rates in the effort to capture some of the demand lost to the Aerocity hotels. This resulted in a drop of 4.6% in mar- ketwide average rate which was, however, compensated by a robust 8.2% growth in occupancy over that recorded in the previ- ous year.3 The pace of new supply is expected to remain sluggish while demand is anticipated to witness steady growth in Pune. HVS anticipates India's capital to add approximately 2,800 rooms over the next five years. HVS anticipates India's capital to add approximately 2,800 rooms over the next five years, with the major part of the supply in the upscale and mid market positioning. However, demand for room nights does not show signs of slowing down, and given that the existing hotels move towards a rate driven strategy, the market is anticipated to absorb the new supply successfully over the medium term. Therefore, the outlook for the New Delhi market remains positive. Pune The Pune hotel market has weathered a rough storm since 2007-08. During this period, a staggering increase in room supply resulting in a downward spiral in both occupancy and average rate performance somewhat overshadowed the year-on-year double-digit growth in demand, and led many to question the strength of the market. The silver lining is that the slowdown in new supply coupled with the robust and continuous increase in demand has helped the city's hotels perform well in occupancy. Room rates have witnessed a marginal improvement, particularly in 2015-16 and 2016-17. In addition to serving as a manufacturing hub in Western India, the city has developed into an important IT/ITeS centre. Availability of large commercial floor plates along with a young and educated workforce have fuelled the rapid development of the city. Proximity and ease of connectivity to Mumbai, the country's financial capital, has also helped. Going forth, the pace of new supply is expected to remain sluggish while demand is anticipated to witness steady growth. Moreover, airport infrastructure, which is inadequate in view of the city's swift growth, is planned to be improved, keeping in mind the recently-announced development of a greenfield airport at Purandar. All in all, the outlook for the city remains positive. Indian hotel Industry – seven Major Cities Introduction In this section, we present the operating profiles and financial data for different categories of hotels in seven major cities: Bengaluru, Chennai, New Delhi, Goa, Kolkata, Mumbai, and Pune. This section will provide the reader an understanding of key trends in hotel performance in these cities. Trends ◗ Guest Analysis: Domestic guests represent the majority of guests accommodated by hotels across the seven cities. However, when compared to the percentage reported in last year's survey, Five-Star Deluxe, Five-Star and Four-Star hotels in Mumbai and Kolkata have displayed a decline in the Domestic demand and a corresponding increase of Foreign guests. Furthermore, the Five- Star Deluxe and Five- Star hotels located in Bengaluru, Chennai, Kolkata, New Delhi and Pune have recorded a marginal decrease in the percentage of Business guests accommodated by the hotels, over that in 2014-15. Three- Star hotels in Chennai, and Four-Star and Three-Star hotels in Mumbai continue to account for the highest percentage of repeat customers when compared to the hotels in other categories and cities. ◗ Average number of Trained Employ- ees: Hotels across all star categories in Bengaluru and Mumbai report increase in the average trained employees across managerial and staff levels. However, a concerning trend displayed by hotels in Chennai and Kolkata is the increasing number of untrained employees, with the Four-Star and Three-Star hotels in Kolkata reporting an average of almost 40% of un- trained employees at their hotels. ◗ Occupancy and Average Rate: This year's survey results indicate that Five-Star Deluxe, Five-Star and Four-Star hotels in Pune report the highest increase of 21% in occupancies, whereas Four-Star and Three-Star hotels in Kolkata report the highest increase in average rates. However, as the aforementioned star categories in Kolkata did not witness an increase in occupancy over the last year, the Pune hotels lead in terms of the highest RevPAR growth of 39%. Chennai’s Three-Star hotels have reported a decline in occupancy as well as average rates, resulting in a RevPAR decline by 25%.