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Luxury hotel rooms to grow 194% in 3 yrs,says report

The hotel industry in the city is booming as far as room inventory is concerned,in spite of demand dipping.

Written by Pranav Kulkarni | Pune | November 12, 2011 4:01:35 am

The hotel industry in the city is booming as far as room inventory is concerned,in spite of demand dipping. A report published by HVS,a global hospitality organisation,says the luxury hotel sector in the city is expected to witness 194 per cent room-inventory growth in three years. The report says that from an 2,672 rooms,the inventory will increase to 5,196 by 2014-15,despite the fact that the city has been witnessing a sharp decline in value per room owing to excess supply,a fact hotel managers admit to.

“From a handful of choices until a few years ago,the city today has an abundance of options in the luxury hotel sector. In fact,as per information available with us,about 26 facilities in four and five star category were proposed to come up in 2008,for the Commonwealth Youth Games. Today,almost 20 of the 26 are up and running,” said Anant Sardeshmukh,executive director general,Mahratta Chamber of Commerce Industries and Agriculture (MCCIA).

The city’s five star hotel scenario that revolved around Taj Blue Diamond,Le Meridian,Aurora Towers,Holiday Inn for years,today boasts a number of international and national hospitality brands such as Marriott,Hyatt,Radisson,Ginger,Sayaji and so on. According to the report,in 2010-11,the city witnessed an increased supply (of rooms) of 30.8 per cent as compared to 2009-10,the highest as compared to all other cities while the increase in demand was 23.3 per cent. Incidentally the same figures for Bangalore were 6.1 per cent and 16.5 per cent respectively,and for Hyderabad 16.6 per cent and 30.1 per cent respectively. In both cases,increase in demand was higher than increase in supply.

According to industry experts,the city has been witnessing an average occupancy of 47- 49 per cent with over 50 per cent rooms vacant on any given day,while the national average of occupancy according to the report is 68 per cent. “Today,four/five star rooms are available for as low as Rs 4,000-10,000 per night post negotiations,whereas in an ideal scenario,they would never go below Rs 12,000-16,000,” said the general manager of a premium hotel.

“This is due to stiff competition. The years to come are good for luxury hotel industry in the city and the reduced occupancy is not because of lack of demand,but due to the increased competition,” said Balan Paravantavida,general manager,Marriott.

Marriott,which already has three facilities in the city is on the verge of setting up another in Chakan.

According to MCCIA,the city has an industrial turnover of Rs 2.5 lakh crore,which also includes a vibrant Rs 60,000-crore IT sector. “There has been a tremendous growth resulting in a number of foreign delegations visiting the city and companies looking forward to setting up their facilities here. The demand for luxury hotels will increase in years to come. While a new airport will ensure more inflow of customers,shortage of trained hospitality professionals along with other concerns should be addressed by the hotel industry,” added Sardeshmukh.

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