Abhishek Shedjale

Content
Introduction
 A look at

the Indian Hospitality Sector

 Hotel Categorization  Key

players in the sector Upcoming Properties

 SWOT Analysis  Growth

Engine (Growth factors)

After witnessing two bad years due to the global economic slowdown and terror attacks, the Indian Hotel Industry appears to be now on a path of slow recovery. The market size of the hotel industry (upscale and mid market) in India is expected to grow at 9.4 per cent from Rs 117 billion -11 to Rs 168 billion- 2015 India is currently ranked 12th in the Asia Pacific region and 68th overall in the list of the world's attractive destinations (Report 2011 by the World Economic Forum (WEF)) A total investment of Rs 448 billion is expected in the next five years. The Government has sanctioned a budget of Rs 11.7 (bn.) for 2011-12 towards the development of tourism infrastructure and promotion of tourism.

The number of hotel rooms in India is expected to reach more than 1,80,000 within five years. As of January 2011, the total count of hotel rooms in India is 1,20,000 and the country is expected to require additional 80,000. Around 40 international brands are expected to enter the country in the next five years. The number of foreign tourists is expected to reach 6.2 m during 2011 and further to 11.1 m by 2021 Foreign tourist arrivals (FTAs) to India surged from 5.11 (m) in 2009 to 5.58 m in 2010, thereby resulting in an increase of 9.3% .

According World Travel and Tourism Council (WTTC), the demand for travel and tourism in India is expected to grow by 8.2 % between 2010 and 2019. Thus placing India at the third position in the world and expected to be the second largest employer in the world Capital investment in India's travel and tourism sector is expected to grow at 8.8 % between 2010 and 2019. As per the forecast report India is to get more capital investment in the travel and tourism sector and is projected to become the 5th fastest growing business travel destination from 2010 through 2020.

Neesa Leisure Pvt Ltd

Location: Raipur, Chattisgarh Location: Rohini, Delhi

Location: Dehra Dun,Uttarakhand

Inventory: 80 rooms Cost: Rs 41.91 Crore Cost (Rs Crore): 35.05

Inventory: 30 rooms Cost: Undisclosed

Expected Completion: March 2013 Expected Completion: May 2012

Expected Completion: December 2012

Seven Seas Hospitality Pvt Ltd

Regency Holidays Pvt Ltd

Neesa Leisure Pvt Ltd

Location: Nashik, Maharashtra Location: Karnataka Location: Kolkata, West Bengal

Swissotel Hotels & Resorts Ltd Mayfair Hotels & Resorts Ltd

Inventory: 100 rooms Cost(crore) RS. 48.56 Inventory: 151 rooms Cost: Undisclosed Inventory: 120 rooms Cost (Rs Crore): 50.00

Expected Completion: March 2013 Expected Completion: December 2013 Expected Completion: December 2013

Regional India Year-to November 2011

Occupancy Change % ADR % (INR)

India East India Kerala M.P. 59.8 % 65.5 -1.0 660144

% Change
-0.1

RevPAR (INR)
3947.68

Change %
-1.2%

0.6

52220.00 4282.85

0.2

3417.85

0.8

62.7

-2.2

-0.8

2687.21

-3.0

50.1 50.6

12.7

3345.27

5.6 -0.2

1675.60

19.0

Maharashtra

-3.7

4740.96

2399.72

-3.9

Rajasthan U.P.

40.8

6.8

8336.24 5527.43

-3.3

3397.11

3.3

62.8

2.8

7.8

3473.89

10.8

Occupancy % India Bangalore 59.8 % 59.0 65.7

Change %

ADR (INR) 660144

% Change

RevPAR (INR) 3947.68

Change %

-1.0

-0.1

-1.2%

-2.9

7245.20

4.8

4274.00

1.8

Chennai

0.6

6166.80

-1.7

4051.78

-1.1

Delhi

63.8

-7.4

8326.15 6031.83

-3.4

5309.19 4140.21

-10.6

Goa

68.6

2.6

5.2 2.9

8.0 4.4

Hyderabad

57.1 63.1

1.5

5531.55 8450.84

3156.38

Mumbai

6.2

-0.8

5333.98

5.3

6 5 4 3 2 1 0 5.57

FTAs - Jan to Nov 9.30%

Column1

3.93%

5.58 5.11 5.28 5.08

-3.30% -1 2011* 2010 2009 2008

2007

9000 8000 7000 6000 5000 % 4000 3000 2000 1000 0 Nov -11 Nov-10 Nov-09 7941 6516 5523 Crore

Strength:-

India's rich culture heritage : With historical backdrop of 5,000 years India is one big package of culture. Demand supply gap: Indian hotel industry is currently facing a mismatch between the demand and supply of rooms leading to higher room rates and occupancy levels Government support : The government has realized the importance of tourism and is willing to spend towards the development of the industry - The Incredible India campaign and Atithi Devo Bhava.

Weakness:-

Poor infrastructure: India is concentrating to improve infrastructure and India has planned to invest huge amount on infrastructure in the future. Compared to India, China is spending seven times as much as India on infrastructure (excluding real estate).

Opportunity:-

Rising income : Increase in the income and creation of more job opportunity. Open sky benefits: The opening up of the aviation industry in India has brought exciting opportunities for the hotel industry as increased airline activity has stimulated demand and has helped to improve India's troubled infrastructure. New business opportunities : It is expected that over the next three to five years the biggest surge in accommodation demand is expected to come from commercial zones that are being developed in metro suburbs and secondary markets . The new concept which is going to gain importance is that of budget hotels to make start category of hotels for more people.

Threat:-

Event risk : Events like Mumbai terror attack - 9/11, Afghanistan and Iraq wars have severely impacted the tourism industry in the past and the threat remains in the future as well. Increasing competition: Global hospitality majors like the Four Seasons ,Shangri-La and Aman resorts are all making their entry into the India market.

The Hotel industry in India is going through an interesting phase. Booming Indian Economy. High growth in sectors like information technology, telecom, retail and real estate. The arrival of low cost airlines. Up-gradation of 28 regional airports in smaller towns and privatization and expansion of Delhi and Mumbai airport. The 'Incredible India' destination campaign and the recently launched 'Atithi Devo Bhavah' (ADB) campaign have also helped in the growth of Domestic and International tourism and consequently the hotel industry.

Corruption and multi-level bureaucracy. Government Regulations, licenses and approval process. Over 65 Approvals and licenses required for hotel project development. Largely depends on business travellers but tourist traffic is also on the rise. Demand normally spurts in the Peak season between November and March. High capital costs, poor infrastructure facilities and scarcity of land especially in the metros. Poor Air Connectivity.

Thank You

Atithi Devo Bhava