GLOBAL UPDATE
HEADLINE
by JEFF WEINSTEIN , EDITOR IN CHIEF
INDIA TAKES A HIT
UPDATES
JIN JIANG ’ S NEW MIDSCALE BRAND 12
SOCIAL MEDIA HITS THE ROAD 14
POMERANC ’ S NEW PLANS 16
THE BALMORAL HIGHLIGHTS LOCAL WHISKIES 18
ON THE WEB 20
India ’ s gross domestic product growth has slowed to 4.4 %, the lowest level in four years , and the value of the rupee has fallen about 20 % year-to-date . For the hotel industry , the fallout has been mixed with some hotel companies considering dollarizing their businesses , although none will go on the record saying so .
Domestic business travel is India ’ s main driver of demand , leaving hotels vulnerable to the GDP ’ s downswing . According to the HVS 2013 Hotels in India Trends & Opportunities report released in August , as much of 90 % of India ’ s demand comes from business travel , and most of this demand starts on a Monday and disappears on a Friday . “ Business travel has definitely declined , and combined with substantial capacity addition that has occurred over the past three years , there has been a decline in rates , occupancies and RevPAR with levels for 2013 being the lowest for the last six to seven years in different markets ,” says Vijay Thacker , director , Horwath HTL , Mumbai .
The effect is being felt unevenly across the country as new supply is also dragging down performance . Hotels in India ’ s gateway markets are seeing the largest performance declines , with Mumbai ’ s rate down 21.3 % to US $ 102.49 and Delhi-NCR down 19.4 % to
US $ 88.84 , the largest ADR decreases in Asia Pacific in August , according to STR Global . At the same time , Delhi-NCR reported a 17.9 % decrease in RevPAR to US $ 44.84 , also the largest drop in Asia Pacific that month . However , leisure travel in markets like Goa , Jaipur , Kerala and Agra has increased as Indians have eschewed traveling abroad for vacations in their home country , and the WTTC estimates domestic travel spending in India will increase 6.1 % in 2013 . “ The falling rupee has prompted Indians to travel within the country rather than visiting outbound destinations ,” says Sami Nasser , senior vice president , operations , Middle East , Africa and India , for Fairmont Raffles Hotels International , Toronto . “ We see India as a dynamic market that continues to have significant growth potential .”
Bump in the road Other international hotel companies echo this sentiment in their outlook on India , despite the fact that nationwide RevPAR has declined every year since 2008 primarily due to the influx of new supply , according to HVS Research . Wyndham Hotel Group says India remains its second-largest growth area in Asia Pacific and that the currency issue is not affecting its hotels ’ performance .
10 HOTELS November 2013 www . hotelsmag . com