Date:11/02/2007 URL: http://www.thehindubusinessline.com/2007/02/11/stories/2007021103150500.htm

Back Shortage of rooms to hit hospitality sector beyond 2011

Our Bureau

FICCI STUDY

Advertisement

New Delhi Feb 10 The hospitality sector in the country would still be plagued with shortage of rooms in spite of the hotel industry's plan to add 53,000 rooms during the next five years, according to a FICCI-Evalueserve study.

New investment in the hotel industry would add 53,000 rooms by 2011, well short of the current estimated requirement of 1,50,000 rooms. Thus a shortage of 1,00,000 rooms would persist beyond 2011, finds the survey — Investments in Hotel Infrastructure in India.

Indian companies such as the Taj, Sarovar, Kamats, Oberoi and Lemon Tree have shown interest in setting up budget hotels.

Andhra Pradesh, Uttar Pradesh and Rajasthan emerge as front-runners in terms of facilitating new investment in hotel infrastructure.

Various other States, such as Bihar, Goa, Orissa and Punjab among others have granted industry-status to the hotel sector by virtue of which the hoteliers can leverage tariff, land and taxation related benefits that are applicable to other industries.

The `Incredible India' campaign has emerged as a huge opportunity for real-estate investors and hoteliers across all segments including luxury and heritage, mid-market and budget hotels.

Coupled with unprecedented growth in tourism in the last three-four years, the huge shortfall has enabled hotels in the country to register impressive performance numbers across all performance parameters.

The Revenue Per Available Room has witnessed a jump of 27 per cent in 2005-06 at Rs 3,765 as compared to the 2004-2005 level of Rs 2,966.