The courtyard of the Le Meridien hotel in Mahabaleshwar , south of Mumbai
supply , particularly to the middle market , which can utilize modernized airports and airline connectivity .
Even in the luxury segment , the outlook is improving . While it remains challenging to develop luxury hotels in India , Oberoi Hotels & Resorts President Kapil Chopra is preparing two domestic openings this year , and with real estate prices trending down , he says , the metrics will improve .
“ It ’ s a great time to have cash and go out and buy assets ,” says Thadani , predicting pipeline growth over the next three to five years . Institutional capital is “ sniffing ” at India , he says , adding , “ We are at the cusp of the next upcycle . We ’ ve had four to five bad years , and the supply pipeline is extra weak .”
trickle iN tHe pipeliNe According to Lodging Econometrics , India ’ s construction pipeline has decreased 22 % by projects and 23 % by number of rooms since 2014 ; the total pipeline fell 12 % during that period . And of the top five cities by project pipeline count , only Bangalore ’ s increased .
“ I believe we are in positive territory ,” says Dilip Puri , managing director , India , and regional vice president , South Asia , at Starwood Hotels & Resorts . Starwood , which operates 47 hotels in India , including 31 luxury and 16 midscale properties , has 33 hotels in its pipeline , seven of which will open this year . “ There is demand for quality lodging in Tier 2 and 3 cities , and we are the first international chain to enter some of these markets ,” Puri says .
Starwood sees India as “ under-hoteled .” “ We believe that our guests are now taking shorter vacations and are looking for destinations that are well-connected and offer leisure facilities ,” Puri says , adding that the company wants to develop its resort portfolio . Carlson Rezidor Hotel Group plans to open 16 hotels in secondary markets by the end of 2017 ; that ’ s in addition to its 76 hotels in the country . “ We believe the country offers an exponential opportunity for sustainable growth ,” says William Costley , vice president , operations – South East Asia and India , at Hilton Worldwide . “ The capacity in India , in terms of hotel rooms , is about 10 % of what you would find in more mature markets around the world .”
Hilton ’ s pipeline of nearly 20 hotels and more than 3,000 rooms exceeds its current footprint of 14 hotels and resorts in 11 cities under Hilton Hotels & Resorts , Double- Tree , Garden Inn and Hampton brands . Its next scheduled opening is a Conrad in Pune , and it has marked more than a dozen cities for expansion , including Mumbai , the commercial capital ; the IT and business hubs of Bangalore , Pune and Hyderabad ; and Chennai , Jaipur and Kolkata .
“ The metropolitan cities have the capacity to absorb a larger inventory , and
IndIa PIPelIne
The leading franchisor in India is Intercontinental Hotels Group , with 45 projects / 8,563 rooms . India ’ s construction pipeline ranks fifth in the world , ahead of the U . K . and behind Brazil , Indonesia , China and the U . S .
Q415 by product stage
(% change year-over-year )
under construction 154 projects ( -22%), 24,933 rooms ( -23%)
start next 12 months 56 projects ( -15%), 8,031 rooms ( -24%)
early planning 126 projects ( 8 %), 17,789 rooms ( 12 %)
total pipeline 336 projects ( -12%), 50,753 rooms ( -13%)
top markets Q415
All of the top markets were down year over year except Bangalore , which added 6 projects / 623 rooms .
mumbai 31 projects / 6,336 rooms
bangalore 30 projects / 6,276 rooms
Hyderabad 16 projects / 3,107 rooms
gurgaon 15 projects / 2,754 rooms
Noida 13 projects / 2,323 rooms
top asia pacific pipeliNe Q415
china 64 % of pipeline rooms 2,513 projects / 548,550 rooms ( -5% projects , -2% rooms )
indonesia 8 % of pipeline rooms 405 projects / 65,631 rooms ( -1% projects , -1% rooms )
india 6 % of pipeline rooms 336 projects / 50,753 rooms ( -12% projects , -13% rooms )
Source : Lodging Econometrics
May 2016 hotelsmag . com 35