Hospitality - Industry in India

Hospitality segment, just like many other segments in India is booming at an unprecedented pace. India faces a huge challenge of being "under roomed" while the economy is growing rapidly. This provides for a huge opportunity for hospitality industry. A lot of large real estate developers are also investing into this business to bridge the demand-supply gap and leverage the opportunity.

A number of cities have blossomed with suburban "Silicon Valley" type Special Economic Zones (SEZs). This is mostly driven due to strong growth in IT, BPO segments, increase in foreign travelers, emphasized focus on tourism by government, affordable airlines fares, etc. Several other factors such as Commonwealth Games in Delhi are fueling the need further. The middle class is becoming more prosperous and native Indian tourist travel is growing rapidly, particularly in places such as Goa, Kerala and Rajasthan.

Bangalore, Hyderabad, Chennai, Gurgaon, Pune and the suburbs of Mumbai are the areas attracting international investment and as expected, are the cities with the largest development pipelines. Combined, these cities account for 89 of the 161 projects in the pipeline and 16,734 guestrooms, which is 68% of the rooms in India's total pipeline.

Of the 161 projects in India's pipeline, 100 will have 4 and 5 star designations. The other 61 are 1, 2 and 3 star developments. A number of them are new economy brands recently designed for the Indian market place. Taj's Ginger Hotels is one such brand, Lemon Tree and Red Fox are others in this category.

Almost all the major hotel operators such as Starwoods, Hilton, Intercontinental have significant growth plans for India and have multiple projects in works or in pipeline.