3. Table of Contents
Foreword from the President, FHRAI
About HVS
Synopsis and Key Highlights .................................................................................................................................. 1
Country Trends ............................................................................................................................................ 3
City Trends ................................................................................................................................................... 8
1. Indian Hotel Industry – Star Category ........................................................................................................... 17
2. Indian Hotel Industry – Inventory and Chain Affiliation .......................................................................... 26
3. Indian Hotel Industry – Seven Major Cities ................................................................................................. 34
4. Indian Hotel Industry – Thirteen Other Cities ............................................................................................. 45
4. Foreword
The Federation of Hotel & Restaurant Associations of India is pleased to present the sixteenth annual edition
of the Indian Hotel Industry Survey, in cooperation with HVS India. This survey includes in-depth
information about the performance of hotels across various cities and positioning and provides several
benchmarks for comparing hotel performance in India. We would like to thank the participating hotels for all
the detailed information they have provided, thereby helping to improve the quality of this research.
The Indian Hotel Industry Survey analyses the performance of the Indian hospitality industry across
parameters such as facilities, manpower, operational performance, and marketing trends. The information is
based on data received from FHRAI hotel members and the authenticity of this data helps us in providing a
clear picture of the operating statistics of India's hospitality sector. Data collected from our member hotels, our
extensive historic database and the credibility of our research have helped make this report a preferred tool
for hotel professionals, consultants, investors, bankers, researchers, government officials in the tourism
department, media persons, and all those interested in studying the Indian hotel industry.
The current edition includes an analysis of seven major cities for which we have received detailed
information and thirteen other cities where information was available with us for some hotels, though not in
sufficient numbers for all the star categories. We earnestly request all our members to be more forthcoming
with sharing the required information as this helps to take up various issues confronting the industry, both at
the centre and state level. It is only when armed with accurate data that we can convince the policy makers to
give us the importance and priority that our industry deserves to fulfil its potential in India's economic
growth. Therefore, while we have basic data for 1,450 members (an increase from the 1,320 responses received
last year), the financial data is not available for all of them. Though the major apprehension of each one of
those members for not sharing the required information for this report might be the confidentiality of their
data, members should rest assured that there is complete security of data by HVS.
We encourage feedback on the presentation and content of this report to enable us to improve it each year. We
are thankful to HVS India for their continued support for this project as well as HVS Sustainability for having
sponsored the current edition.
S M Shervani
President, FHRAI
www.fhrai.com
5. About HVS
HVS is the world's leading consulting and services organisation focused on the hotel, mixed-use, shared
ownership, gaming, and leisure industries. Established in 1980, the company performs 4,500+ assignments
each year for hotel and real estate owners, operators, and developers worldwide. HVS principals are
regarded as the leading experts in their respective regions of the globe. Through a network of more than 30
offices and 450 professionals, HVS provides an unparalleled range of complementary services for the
hospitality industry.
HVS New Delhi was established in 1997 and has risen to be the only dedicated hospitality-consulting firm in
this region. It currently offers its Consulting and Valuation services to clients with interests in the South Asian
region covering India, Sri Lanka, Bangladesh, Pakistan, Nepal, Bhutan, and the Maldives. The different
verticals based on the services offered by the HVS India are summarised below:
CONSULTING AND VALUATION
The Consulting and Valuation team comprises highly experienced industry professionals offering the utmost
level of expertise and credibility. Our consultants understand the hotel business and have received
qualifications from leading hospitality schools across the world, while also possessing actual hotel operating
experience.
As a part of our Consulting and Valuation services, we offer the following:
• Market Studies
• Feasibility Studies and Return-on-Investment Analyses
• Development Strategy Recommendations
• Valuations (Single Asset and Portfolio)
• Market Entry Strategy Studies
• Land Bid Evaluations and Residual Land Valuations
• Investment and Transaction Advisory Services (Buy and Sell Side)
• Operator Search and Management Contract Negotiations
• Operational Audit & Advisory Services
EXECUTIVE SEARCH
Executive Search, another vertical to the base of services offered, entered the Indian subcontinent in 2001 and
currently manages diverse portfolios across varied sectors. In India, HVS Executive Search has offices in New
Delhi and Mumbai, and is among South Asia's first retained Executive Search practices. It provides advisory
services to leaders of the hotel, restaurant, real-estate, manufacturing, retail, telecom, energy, and education
industries. Practice areas include senior-level executive search, mid-management recruitment, and
compensation consulting.
6. MARKETING AND COMMUNICATIONS
HVS Marketing Communications (HVS MC) offers comprehensive strategic marketing and creative
implementation support to upcoming and existing hotels in India and across the globe. Uniquely positioned
as a strategic marketing consultancy powered by an innovative design/creative team, HVS MC specialises in
proactive conceptualisation and consistent implementation of brand positioning, marketing strategies and
creative communications, all with a focus on return on investment. Founded on HVS's renowned
understanding of hospitality industry and its operations, HVS MC has the unique ability to create and
implement successful marketing solutions for its clients and ensures brand maximisation through a
consistent marketing approach. HVS Marketing & Communications services include conceptualisation and
implementation of:
• Strategic Launch/Promotional Marketing and Media Plans
• Brand Architecture, Identities and Manuals
• Advertising and Creative Development Support
• Proactive and Seamless Implementation
SUSTAINABILITY
HVS Sustainability provides a range of business-driven consulting services helping hotel owners and
operators reduce their operating expenses through diligent facility management and informed strategic
investment into building equipment. We adapt our approach on an asset-by-asset basis and focus on the
provision of financially-viable recommendations that can be immediately incorporated into both operational
and capital plans for a particular property. Our unique approach leverages the resources and technical
expertise of the world's leading engineers, facility management professionals, and equipment vendors. We
further promote accessibility to conventional and non-conventional financing mechanisms for utility
efficiency projects.
®
Additionally, ECOTEL is a prestigious
We specialise in the following:
environmental certification managed by HVS
Sustainability specifically for the hospitality
• Benchmarking
sector. This certification enables hotels to become sustainable by
• Auditing
primarily reducing the environmental impact of their business and
• Project Implementation Support
becoming financially more viable and socially responsible.
• Strategic Advisory
HVS FOOD & BEVERAGE SERVICES
HVS Food & Beverage Services specialises in consulting and project execution of all aspects of the F&B
business - restaurants, banquet/catering facilities, hotels, conference centres and private clubs. Specific
services offered by us include:
• Restaurant, Bar and Events' Facility Appraisal
• Market Overview for F&B Projects
• F&B Feasibility Studies
• F&B Consulting
• Conceptualisation of F&B Solutions
• Complete Project Execution
• Management Contracts - Restaurants and Bars
The FHRAI Indian Hotel Industry Survey 2012-13, which will be referred as FHRAI Survey from here on,
brings together the industry's key statistics and serves as an easy reference volume. We are grateful to all those
who have contributed towards the same and look forward to increased participation in the years to come.
Kaushik Vardharajan
Managing Director
Bhoomija Vadehra
Analyst
Tulika Das
Research Associate
7. Synopsis and Key Highlights
Introduction
The Indian hospitality industry has emerged as one of the key industries driving the growth of the services
sector. The FHRAI Indian Hotel Survey 2012-13 aims to provide the most comprehensive guide to all India
performance trends for this industry. Results of the Survey will empower industry stakeholders such as
owners, investors, operators, business analysts, and researchers with information on the operational aspects
of the industry. It will also help owners benchmark the performance of their operations against industry
standards and seek professional help if corrective measures are required.
Data Collection
The data for the FHRAI Indian Hotel Survey 2012-13 has been contributed by the member hotels of FHRAI.
The FHRAI sends out a questionnaire to each of its members (numbering 2,505 hotels as of December 2013), of
which 1,450 responded. The data received is then analysed and presented in this report.
Methodology
The data received from hotels participating in the Survey is sorted and filtered according to the objectives of
the Survey. The data is then processed and analysed to extract important information pertaining to the
performance of the Indian hospitality sector across crucial parameters. These parameters such as guest
segmentation, hotel finances, marketing, sources of reservations, and seasonality, amongst others are then
presented under the following categories:
•
Star: Five-Star Deluxe, Five, Four, Three, Two, and One Star, Heritage hotels, and Other hotels (which
are not classified under any star rating).
•
Inventory: Number of rooms in hotels are categorised as Less than 50 Rooms, 50-150 Rooms, and More
than 150 Rooms.
•
Affiliation: The two types of affiliations used to categorise hotels are Affiliated to Chain and
Independent.
•
Primary Markets: The seven major cities covered in this report are Bengaluru, Chennai, Goa, Kolkata,
Mumbai, Delhi-NCR, and Pune.
•
Secondary Markets: The thirteen secondary cities presented in this report are Agra, Ahmedabad,
Bhopal, Coimbatore, Gurgaon, Hyderabad, Indore, Jaipur, Kochi, Nagpur, Shimla,
Thiruvananthapuram, and Vadodara.
Page 1
8. Qualifying Conditions
•
While it is our endeavour to represent all the cities in India, we are limited by the data received from the
participating hotels. In order to make the study relevant, we present data for only those categories for
which we have a minimum of four participating hotels.
•
Hotels across different categories showing similar characteristics have been combined under the same
category when sufficient responses are not available for each category.
•
To facilitate better evaluation of data across comparable groups, the financial statements are presented
through Net Income before any deduction of depreciation and interest, which are hotel/owner specific.
Limiting Condition
•
In some cases, there are large fluctuations in the data and this noise in the data may be attributed to the
changing participation in the Survey and this may not be an accurate representation of market
performance.
Presentation of Financial Data
•
Percentage of Revenue is an assessment of costs as a percentage of revenue. Departmental expenses are
portions of individual revenue heads while Operating and Fixed Expenses are deducted from Gross
Hotel Revenue following the international accounting guidelines.
•
Amount per Available Room (PAR) is the financial performance of a single room and is based on the
total inventory.
•
Amount per Occupied Room (POR) is the financial performance of a single occupied room.
All amounts presented in this report have been rounded to the nearest whole number and are in Indian
rupees (`) for the fiscal year 2012-13 (April-March). In the financial statements, amounts are provided as
amounts per available room (PAR) and per occupied room (POR) in order to eliminate differences in the
size of hotels surveyed.
Page 2
9. Key Trends
This section is divided into two parts: Country Trends and City Trends. In the first subsection, an overview is
provided of the broad trends along with Survey findings related to key operating statistics that have been
observed in the country in the past year. This is followed by the City Trends, which reflect HVS’s perception of
each city, as well as our expectations with regard to its future performance.
An interesting trend to note is the correlation between the supply and demand growth, with the supply
growing at 17.8% compounded annual growth rate (CAGR) and demand at 17.3% from 2008-09 to 2012-131.
The fact that occupancy levels remained generally stable during this period despite strong increases in
supply, is indicative of the healthy growth in demand. However, the occupancy performance is only part of
the story; there appears to be a trend where hotels are dropping average rates to attract customers in the face
of increased supply. As a result, HVS is of the opinion that a new customer mindset is emerging that is
sensitive to the price instead of the traditional one, which was more loyal to a hotel/brand. As operators battle
increasing departmental costs and owners struggle with debt service payments, hotel companies need to
reconsider their rate strategies.
Country Trends
•
Hotel Industry Performance – Growth in Demand and Supply: In 2012-13, the country experienced a
slowdown in growth across sectors, as reflected in GDP growth of 5%2. Despite this slowdown, the year
saw hotels maintain occupancy levels at a steady 60.4% (60.9% in 2011-12).
HVS estimated that major cities across the country witnessed a growth of 11% in hotel room supply in
2012-13, while demand exhibited a strong increase of 9.2% during the same period1. The nationwide
results of this year's Survey, however, reveal that the average rates declined by 3.6% when compared to
those in 2011-12 (Exhibit 1).
EXHIBIT 1: Occupancy and Average Rate – 2008-09 to 2012-13
5,000
65%
63.1%
62.1%
60.9%
3,000
59.9%
60.4%
2,000
55%
1,000
50%
2008-09
2009-10
2010-11
Average Rate
•
1
2
60%
Occupancy (%)
Average Rate (`)
4,000
70%
2011-12
2012-13
Occupancy
Increasing Contribution from Food & Beverage and Banquets & Conferences to the Revenue Mix:
India continues to receive a greater contribution from both the Food & Beverage (F&B) and the Banquets
& Conferences department. The Banquets & Conferences segment also recorded a year-on-year
increase of 17.4% in PAR revenue in 2012-13 (`2,26,793) over that in 2011-12, while Food & Beverage
recorded an increase of 4.2% in the PAR revenue (`5,41,494) for the same period.
HVS 2013 Hotels in India Trends and Opportunities Report
Economic Survey 2012-13, Ministry of Finance, Government of India
Page 3
10. Exhibit 2 illustrates that the revenue contribution (in percentage of total revenue) from Rooms has seen a
steady decline over the last five years, recording a negative CAGR of 4% between 2008-09 and 2012-13.
Going forward, as the competition further increases in the market with the entry of new supply, we
expect F&B revenues to continue to contribute a large portion of gross revenues as they are not solely
driven by occupancies. Additionally, the burgeoning middle class and its propensity to spend will
continue to augment demand for F&B across cities in India. With hotels focusing on the Banquets &
Conferences segment in off-season months to beat seasonality, this department is also anticipated to
increase its contribution to the total revenue pie.
EXHIBIT 2: Sources of Revenue – 2008-09 to 2012-13
100%
5.0%
8.8%
5.8%
6.2%
6.5%
6.6%
8.9%
9.6%
10.4%
12.2%
25.6%
28.6%
27.0%
27.9%
60.5%
56.7%
57.2%
55.2%
52.2%
2008-09
2009-10
2010-11
2011-12
2012-13
80%
29.0%
60%
40%
CAGR-4%
20%
0%
Rooms
•
Food & Beverage
Banquets & Conferences
Other
Declining Net Income (as a percentage of total revenue): The FHRAI Survey results in the last five years
have shown that Net Income as a percentage of the total revenue has consistently declined year-on-year,
as witnessed by a CAGR of -5.7%. The year 2012-13 has seen a decline of 4.7% in Net Income as a
percentage of revenue over the previous year. This phenomenon is mainly attributable to rising
departmental costs, which are a result of rising inflation coupled with an increase in Energy costs. The
last year also experienced an increase in departmental expenses as a percentage of total revenues,
resulting in declining profits.
Exhibit 3 illustrates the FHRAI Survey trends in Revenue and Net Incomes over the past five years.
Page 4
11. EXHIBIT 3: Revenue and Net Income – 2008-09 to 2012-13
2,000
40%
37.9%
1,800
35%
32.4%
1,600
31.4%
30.0%
25%
1,200
1,000
20%
800
15%
600
10%
400
5%
200
0
0%
2008-09
2009-10
Revenue (PAR)
•
30%
1,400
Net Income (%)
PAR Revenue and Net Income (`000s)
33.8%
2010-11
Net Income (PAR)
2011-12
2012-13
Net Income %
Increasing Utility Costs: Energy costs continue to rise and pose a challenge to the hotel industry. The
Survey, this year, has revealed a rise of 13% in PAR energy costs (`1,82,067) over that in the previous year
(`1,61,479). Additionally, the Survey results show that only 26% of the hotels surveyed have an energy
management system in place across India (Table 1-10). The rise in Energy costs coupled with the limited
conservation measures employed highlight the dire need for sustainable practices to be used in the
industry.
HVS is currently tracking a proposed supply of 84,650 branded rooms2, of which 60% is actively under
development and is expected to enter the Indian hotel market over the next five years. Given the
anticipated increase in hotel room supply, together with a high inflationary environment, HVS reemphasises the need for operational efficiency and sustainable practices in order to curtail further
decline of profitability. Going forward, companies like HVS Sustainability can assist hotels in improving
their financial performance along with the environmental and social one.
•
Continuing High Manpower to Room ratios: Employee-to-room ratios in India continue to be on the
higher side when compared with global benchmarks, almost twice as much. The all India average of
employee-to-room ratio stands at 1.6. This can be attributed to the large chunk of four star and three-star
hotel respondents, which have an average employee-to-room ratio of 1.7. Typically, hotels in India
provide services and facilities beyond their positioning; hence, they require more manpower.
With rising manpower costs, the higher ratios are posing a problem to hotel companies. Hence,
companies are now seeking ways to rationalise employee-to-room ratios and cut down on payroll costs,
which will improve operational efficiency. Effective manpower management is the need of the hour
along with effective training programmes. The training programmes include cross exposure to other
2
HVS 2013 Hotels in India Trends and Opportunities
Page 5
12. departments, hotels and brands, consequently incentivising staff and simultaneously training them to
multitask. This training focusing on multitasking would save on manpower and reduce payroll costs,
leading to overall increase in efficiency.
Additionally, given the increasing supply of new hotels entering the country, effective training should
be accompanied by growth opportunities for existing employees and sound retention policies, to keep
good talent from moving to the competition. This will also help stabilise costs over time, as companies
need not incur fresh costs in hiring replacements.
•
Changing Source Markets: The United Kingdom and the United States of America are the largest
international source markets for the Indian hospitality sector, contributing 23% of the overall demand in
2012-13. However, it has been observed that their share continues to decline as witnessed by the 4.3%
drop this year as compared to last year’s arrivals. This may be attributed to the fact that Indian hotels
have seen a greater contribution from the Middle East, Russia, and the SAARC nations. The rise in
visitation from Asia and the Middle East may be attributed to the improved connectivity, easier visa
norms and infrastructure development.
•
Market Mix and Declining Seasonality: The Indian hotel industry continues to cater to the Business
traveller, who contributes the largest share to the market mix at 39%(Exhibit 4); this is primarily due to
the fact that most hotels are situated in business cities. The Survey also reveals an increase in the growth
of Meeting Participants segments (fewer than 100 and more than 100 attendees). As mentioned earlier, it
has been noticed across the country that hotels are targeting Banquets & Conferences in off-season
months with attractive packages and rates in order to off-set the low occupancies experienced during
the traditionally slow season.
Additionally, both the Domestic Business and the Domestic Leisure traveller have continued to show
resilience and maintain their share of the pie and overall length of stay, when compared to the
nationwide average from last year's survey. While the real growth in 2012-13 came from the Domestic
travellers, it is interesting to note that India also experienced an increase of 5.4% in foreign tourist
arrivals (FTA)3 .
EXHIBIT 4: Market Mix – 2012-13
1.30%
Airline Crew
3.90%
Business Traveller - Domestic
5.18%
Business Traveller - Foreign
7.10%
Complimentary Rooms
30.10%
Domestic - Tourists/Leisure FIT
Foreign - Tourists/Leisure FIT
Meeting Participants (Less than
100 Attendees)
Meeting Participants (Over 100
Attendees)
8.13%
4.54%
8.36%
8.90%
Tour Groups - Domestic
Tour Groups - Foreign
20.47%
Other
2.02%
Table 1 illustrates the nationwide key operating statistics of the respondents of the Survey.
3
Annual Report 2012-13 Ministry of Tourism
Page 6
13. Page 7
72
15,768
62.1%
4,578
2010-11
All India
Average
544
8.7
2.7
2.7
0.5
5.4
8.5
28.5
41.2
0.6
0.3
1.1
1.3
3.4
37.9%
OPERATING EXPENSES
Administrative & General
Management Fee
Marketing
Franchise Fees
Property Operations & Maintenance
Energy
Total
HOUSE PROFIT
FIXED EXPENSES
Property Taxes
Insurance
Other Fixed Expenses
Rent
Total
NET INCOME**
0.9
0.3
2.8
1.4
5.4
32.4%
9.6
2.8
3.7
0.3
6.0
8.5
31.0
37.8
16.1
52.9
104.0
70.4
11.3
31.3
68.7
0.7
0.3
1.5
1.1
3.6
31.4%
10.2
2.7
3.1
0.5
5.6
8.7
30.9
35.0
18.0
57.0
94.7
57.4
7.4
34.1
65.9
55.2%
27.9
10.4
0.4
3.1
3.0
100.0
77
16,864
60.9%
4,677
0.8
0.3
1.4
1.3
3.9
30.0%
9.5
2.0
3.0
0.5
5.9
9.8
30.7
33.8
19.3
55.2
91.7
66.0
9.4
35.4
64.6
52.2%
29.0
12.2
0.4
2.9
3.3
100.0
74
15,990
60.4%
4,507
2011-2012 All 2012-2013 All
India Average India Average
515
629
10,031
4,522
18,365
21,784
54,702
616,694
141,121
44,133
44,439
8,496
87,780
138,749
464,717
671,396
146,192
310,165
7,291
25,554
3,553
492,755
1,136,110
985,310
417,248
144,054
9,154
36,360
36,743
1,628,870
72
15,174
59.9%
4,149
2009-10
All India
Average
526
72
15,768
62.1%
4,578
2010-11
All India
Average
544
11,819
5,355
21,935
15,392
54,500
523,484
140,057
40,243
39,920
7,795
88,550
138,097
454,661
577,985
149,683
325,793
7,776
28,555
3,285
515,092
1,032,645
876,919
443,367
137,353
8,618
43,594
37,885
1,547,737
15,310
5,727
48,282
24,044
93,363
565,633
167,965
49,008
65,375
5,317
105,099
147,899
540,662
658,996
160,980
337,840
8,945
32,254
6,124
546,142
1,199,660
997,815
471,013
168,253
8,600
45,825
54,294
1,745,800
Amount Per Available Room (`)
69
15,143
63.1%
4,487
2008-09
All India
Average
474
* Minor Operated departments include laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth
** Net Income is before depreciation, interest payments and taxes
0.8
0.4
1.4
1.0
3.5
33.8%
9.1
2.6
2.6
0.5
5.7
8.9
29.4
37.4
17.1
56.1
90.2
65.5
8.7
33.3
66.7
14.8
55.3
79.7
70.3
9.7
30.3
69.8
57.2%
27.0
9.6
0.5
2.6
3.1
100.0
Percentage of Revenue
72
15,174
59.9%
4,149
56.7%
28.7
8.9
0.6
2.8
2.5
100.0
Average Total Rooms Per Hotel:
Average Occupied Rooms Per Hotel:
Average Occupancy Per Hotel:
Average Rate Per Hotel ( ` ):
60.5%
25.9
8.6
0.6
2.2
2.3
100.0
69
15,143
63.1%
4,487
COMPOSITION
Number of responses:
2009-10
All India
Average
526
REVENUE
Rooms
Food & Beverage
Banquets & Conferences
Telephone & Other
Minor Operated*
Rental & Other Income
Total
DEPARTMENTAL EXPENSES
Rooms
Food & Beverage
Telephone & Other
Minor Operated*
Rental & Other Income
Total
DEPARTMENTAL INCOME
2008-09
All India
Average
474
TABLE 1: Trends in Key Operating Statistics
13,478
5,297
27,797
20,803
67,374
584,534
189,533
50,767
58,263
10,014
103,827
161,479
573,883
651,908
185,231
406,005
6,775
32,827
4,195
635,033
1,225,790
1,026,910
519,739
193,211
7,158
57,221
56,586
1,860,820
77
16,864
60.9%
4,677
15,571
6,231
26,773
23,777
72,353
559,009
177,611
37,389
56,470
8,920
109,845
182,067
572,302
631,362
188,227
424,357
6,140
36,208
5,735
660,667
1,203,660
973,670
541,494
226,793
6,693
54,881
60,800
1,864,330
74
15,990
60.4%
4,507
2011-2012 2012-2013
All India
All India
Average
Average
515
629
72
15,174
59.9%
4,149
2009-10
All India
Average
526
46
21
84
99
249
2,808
643
201
202
39
400
632
2,116
3,058
666
1,412
33
116
16
2,244
5,174
4,487
1,900
656
42
166
167
7,418
56
25
104
73
258
2,477
663
190
189
37
419
653
2,151
2,734
708
1,541
37
135
16
2,437
4,885
4,149
2,098
650
41
206
179
7,322
70
26
222
110
428
2,595
771
225
300
24
482
679
2,480
3,023
739
1,550
41
148
28
2,506
5,504
4,578
2,161
772
39
210
249
8,009
72
15,768
62.1%
4,578
2010-11
All India
Average
544
Amount Per Occupied Room(`)
69
15,143
63.1%
4,487
2008-09
All India
Average
474
61
24
127
95
307
2,662
863
231
265
46
473
736
2,614
2,969
844
1,849
31
150
19
2,892
5,583
4,677
2,367
880
33
261
258
8,476
77
16,864
60.9%
4,677
72
29
124
110
335
2,587
822
173
261
41
508
843
2,649
2,922
871
1,964
28
168
27
3,058
5,571
4,507
2,506
1,050
31
254
281
8,629
74
15,990
60.4%
4,507
2011-2012 2012-2013
All India
All India
Average
Average
515
629
14. City Trends
Table 2 illustrates average occupancy and rate for 33 cities/regions across the country over the last five years
culled from the FHRAI 2012-13 Survey results. This is followed by HVS's viewpoint on the demand-supply
scenario and performance of the 20 identified hotel markets, based on in-house research and data from
‘HVS 2013 Hotels in India Trends & Opportunities’.
TABLE 2: Average Occupancy and Average Room Rate: 33 Cities/Regions in India
City
All India
Agra
Ahmedabad
Aurangabad
Bengaluru
Bhopal
Chandigarh
Chennai
Coimbatore
Darjeeling
Delhi - NCR*
Goa
Hyderabad
Indore
Jaipur
Jodhpur
Kochi
Kolkata
Kullu-Manali
Lucknow
Mount Abu
Mumbai
Mussoorie
Mysore
Nagpur
Pune
Raipur
Shimla
Thiruvananthapuram
Ootacamund
Udaipur
Vadodara
Visakhapatnam
Gurgaon
2008-09
2009-10
Occupancy
2010-11
63.1%
54.8%
63.7%
56.5%
56.5%
72.2%
79.6%
64.6%
72.1%
ID
64.8%
61.7%
56.3%
68.7%
61.4%
51.0%
67.4%
69.6%
50.9%
63.0%
69.4%
71.2%
48.0%
67.7%
ID
65.5%
64.3%
52.7%
57.9%
58.1%
51.6%
77.9%
69.0%
59.9%
57.0%
65.7%
57.9%
52.6%
66.1%
69.1%
65.6%
75.5%
47.2%
64.6%
63.1%
58.8%
65.2%
57.7%
43.2%
64.4%
64.5%
ID
58.7%
67.5%
67.2%
45.9%
67.7%
61.5%
53.2%
39.0%
48.0%
55.3%
ID
47.0%
65.6%
62.1%
62.1%
63.2%
67.6%
59.5%
53.8%
ID
70.4%
64.8%
72.8%
ID
59.0%
64.4%
53.3%
65.4%
64.0%
49.2%
74.2%
65.4%
ID
59.8%
63.0%
69.0%
52.5%
71.4%
76.6%
53.3%
ID
42.7%
61.8%
ID
55.2%
77.8%
76.3%
2011-12
2012-13
60.9%
68.3%
65.1%
ID
58.7%
78.0%
ID
69.1%
66.5%
ID
61.4%
69.5%
55.4%
57.9%
59.4%
48.8%
81.1%
67.1%
ID
63.3%
ID
73.5%
39.4%
62.4%
ID
53.2%
ID
47.8%
60.9%
ID
52.1%
71.7%
ID
65.5%
60.4%
60.3%
63.0%
49.0%
56.6%
72.4%
65.4%
69.8%
61.3%
ID
57.1%
67.7%
55.7%
61.4%
58.6%
46.3%
71.5%
67.1%
ID
65.0%
ID
71.5%
ID
65.7%
54.1%
57.8%
ID
56.5%
57.1%
ID
59.5%
68.0%
63.3%
61.0%
2008-09
4,487
4,211
4,039
2,289
9,757
2,639
3,716
4,678
3,255
ID
6,087
5,378
4,730
1,933
4,472
3,964
2,062
5,342
3,716
2,491
1,823
6,822
4,099
2,340
ID
4,951
1,087
1,766
1,570
1,956
7,319
2,779
3,687
ID: Insufficient Data
*New Delhi - NCR data including Faridabad, Ghaziabad, Gurgaon and NOIDA (Shaded Portion), rest excluding Gurgaon data
Page 8
Average Room Rate( ` )
2009-10
2010-11
2011-12
4,149
2,482
3,367
2,850
6,766
3,110
4,780
4,083
3,236
3,193
6,985
4,757
5,137
1,814
4,059
4,552
2,806
4,880
ID
5,109
2,159
5,833
6,078
2,637
3,132
3,921
1,521
1,790
1,422
ID
3,543
4,360
2,809
4,578
3,968
3,234
2,612
5,838
ID
4,544
5,508
3,989
ID
6,763
7,807
4,152
1,869
3,071
5,519
1,528
4,788
ID
2,393
2,821
5,087
5,817
4,634
2,314
3,140
ID
2,267
1,380
ID
7,406
3,703
5,431
4,677
3,974
3,650
ID
6,849
3,827
ID
4,365
4,100
ID
7,319
5,856
4,020
2,590
3,447
7,005
1,536
5,302
ID
2,966
ID
6,063
4,807
1,973
ID
3,293
ID
1,904
2,330
ID
2,081
3,901
ID
8,122
2012-13
4,507
4,381
3,902
3,203
5,533
4,300
3,639
4,345
3,655
2,253
7,455
5,749
3,856
2,631
3,490
8,431
2,882
5,461
ID
3,047
ID
5,971
ID
3,738
3,018
2,724
ID
2,636
1,474
ID
4,449
3,698
3,367
7,776
15. Seven Major Cities
Bengaluru
Given the travel time, distances and new hotel supply in different parts of the city, Bengaluru has witnessed
the formation of micromarkets. The city remains heavily dependent on Commercial demand with peak
occupancy being recorded from Monday to Thursday. Bengaluru's hotel market relies heavily on the IT/ITeS
sector with a high foreign-to-domestic-guests ratio, making it more vulnerable to global economic changes
than most other cities in the country.
The city experienced an increase in supply of 10.7%, while demand grew by 9% resulting in only a marginal
drop in occupancy. The year saw the entry of mid market and budget hotels; consequently, the marketwide
average rate declined by 4.5%. The Central Business District (CBD), with the highest concentration of luxury
and upscale hotels, witnessed a marginal drop in average rate while still maintaining near similar occupancies
as last year. Whitefield, with budget, mid market, and upscale hotels saw an increase in occupancy and a
decrease in average rate. Electronic City, with mostly budget and mid market hotels recorded declining
occupancy owing to new supply but no marked increase in average rate. The newly formed micromarkets of
ORR South and Yeshwantpur saw a rise in branded supply and increase in occupancies and rates, with new
hotels ramping up operations.
Going forward, Bengaluru is anticipating 10,700 hotel rooms to enter the market in the next five years; this,
coupled with approximately 50% increase in office supply and overall vacancy rates below 15% makes us
bullish about the future outlook for the hotel market here.
Chennai
Chennai is the southern financial capital of the country and its diversified economy consists of the finance
sector along with the growing auto and auto-ancillary sector, manufacturing, and IT/ITeS sectors. The city has
witnessed a significant increase in hotel supply over the last 18 months mainly in the luxury and upper
upscale segments. As a result, occupancy and average rates have declined; however, demand for hotels has
witnessed steady growth across all areas in the city.
Going forward, Chennai is expected to witness a substantial increase in supply over the next two to three
years especially along Old Mahabalipuram Road (OMR), and consequently, further pressure on occupancy
and average rate is anticipated. However, with considerable investment in infrastructure projects, we
anticipate steady growth in the office, retail and residential sectors, which will in turn drive growth in
demand across different segments for hotels. The Commercial segment continues to be the largest for the city
with demand generated from the finance sector in the CBD, manufacturing and automobile companies in the
industrial pockets of Sriperumbudur, Irungattukottai and Oragadam located along the periphery of Chennai,
and from OMR, widely known as the IT Corridor of Chennai. The growth of commercial activities in these
areas along with the development of Omega Township, a 1,500-acre industrial and residential zone about 50
km south of Chennai, is expected to support continued growth in demand in the Commercial and Extended
Stay segments. Additionally, with the opening of hotels with large meeting and conference facilities, we
expect the city to start witnessing large-scale conventions and events. Moreover, the opening of the new
international and domestic airport terminals is anticipated to increase air traffic and consequently, Airline
demand for hotels in the city.
Goa
Goa continues to show year-on-year growth, both in marketwide occupancy and average rates. Much of the
growth over the past four years has been domestically driven, with improved visitation during the summer
and monsoon periods (June to October). As a result, it has reduced the sharp seasonality that was inherent in
the market and helped mitigate the large occupancy gap between seasonal peaks and troughs. Average room
rates, though, continue to vary significantly between the strong foreign-tourist dominated winter months
Page 9
16. and the domestically driven summers and monsoons. Growth in FTA has been driven by a year-on-year
increase in charter business to Goa. While Russia, United Kingdom, and Scandinavia remain the major feeder
markets for the Foreign Leisure segment, Goa has lately seen a strong growth in demand emerging from the
CIS (Commonwealth of Independent States) countries. Another segment that has seen recent growth is
Meetings and Conferences especially since the opening of the Grand Hyatt that offers extensive meeting
facilities. Goa is India's preferred destination for company off-sites, conferences, incentive programmes, and
social events.
However, lack of quality infrastructure continues to be a major hurdle in the overall progress of the state.
Although, the new integrated terminal at Dabolim Airport is ready and scheduled to begin operations in
January 2014, there is high uncertainty associated with the development of the new international airport at
Mopa. Historically, supply growth in Goa has been moderate; however, the current government's
promptness in rewarding necessary licenses and permits has resulted in a strong pipeline of hotel projects
that are under active development. We view this as a positive sign and a welcome development for a state that
displays strong demand growth every year.
Goa continued to witness a marginal increase in occupancy in 2012-13 over that in the previous fiscal. During
the same period, average rates exhibited a healthy increase. Due to a robust charter season coupled with
strong growth in domestic demand, we expect this trend to continue in the current fiscal.
Kolkata
Kolkata is the regional headquarters for a number of domestic and international companies, banks and
financial institutions, such as ITC Limited, Britannia Industries, Coal India Limited, Allahabad Bank, and
United Bank of India. Despite being a major metro, Kolkata has seen limited hotel supply in the last five years;
consequently, the city boasts of high and stable occupancy and steady growth in average rates.
Demand in the city continues to be driven by PSUs and domestic companies, insulating the city from global
economic changes. Kolkata is also a preferred location for conferences and seminars in the eastern part of the
country. This is due to facilities such as the Science City and Milan Mela, located along Eastern Metropolitan
Bypass, which are favoured destinations for large conferences, seminars, and exhibitions.
The past three to four years have also seen rapid development along the city's eastern periphery into areas of
New Town (Rajarhat) and Salt Lake. Prominent IT/ITeS companies have set up operations in these areas with
some companies also moving from the CBD to New Town. Kolkata has recently seen some modernisation
with the opening of the Netaji Subhash Chandra Bose International Airport, which has triple the airport
capacity than before.
HVS is currently tracking 3,511 rooms that are proposed to enter the market with 64% of them under active
development. Like most other cities, the proposed supply is primarily in the upscale and mid market
segments; consequently, we anticipate occupancy to be subdued while average rates are expected to
experience moderate growth.
Mumbai
Mumbai, the state capital of Maharashtra, is also India's financial capital and its largest trading port. This
metropolitan city makes an important contribution to the economy of Maharashtra as well as to India on the
whole. The main industries in and around Mumbai are pharmaceuticals, textiles, gems and jewellery, film
equipment, automotive parts, food processing, electronics, manufacturing, IT/ITeS related businesses,
financial services, and petrochemicals. The city is also home to Bollywood, India's largest film industry and
also one of the largest film industries in the world.
With several offices shifting base to business districts across North Mumbai, hotels here were positively
impacted while those in South and Central Mumbai continued to witness drop in demand. Additionally,
various micromarkets in North Mumbai such as Bandra Kurla Complex (BKC), Andheri, Malad, Goregaon
Page 10
17. and Vikhroli amongst others are witnessing continuous additions to office stock, which is expected to fuel
demand for hotels located in these micromarkets. Going forward, these areas are anticipated to witness new
hotel supply.
With supply increase in the branded space over the next year expected to be almost negligible, we estimate
marketwide occupancy to continue improving. We anticipate a majority of hotels to give precedence to
growth in occupancy to capture a larger market share, thereby we believe average rate to witness a decline
and thereafter to grow marginally. However, as new hotels enter the market in the medium-to-long term, we
expect the city to witness some occupancy and average rate pressure before stabilising in the long term.
The robust nature of the hotel market along with infrastructure development such as the metro and monorail,
upgradation of the existing airport, and the opening of the Bombay Port Trust Road amongst others, leads us
to be bullish in our long term outlook for Mumbai.
Delhi-National Capital Region (NCR)
In the Delhi-NCR region are included hotels located in Delhi, NOIDA, and Greater NOIDA. Delhi, the
administrative capital of India, houses several government bodies and embassies of various countries.
Additionally, the city is regarded as one of the largest commercial hubs across the country. Over the last
decade, the central administration has worked towards improving the infrastructure of the city, which is
evident in the development of several flyovers, arterial roads, and expansion of the Delhi Metro. The city also
acts as the aviation hub for the country as Indira Gandhi International Airport provides connectivity to
various cities within the country and around the world.
In the past few years, Delhi has witnessed the addition of several new hotels, primarily in the western and
eastern parts of the city that have displaced demand from South and Central Delhi hotels. This has led to a
decline in the overall performance of hotels situated in and around the CBD area. We anticipate this trend to
continue in the short term. As per the Trends and Opportunities Report 2013, also published by HVS, around
5,200 rooms are expected to be developed in the various submarkets in Delhi, with a majority of them located
within Aerocity. We expect the development of these hotels to put pressure on the marketwide occupancy
and rates in the short-to-medium term. However, owing to the collective meeting facilities and inventory
these hotels offer and their proximity to the airport, we expect them to induce demand in the Meetings &
Conference segment. Therefore, our outlook for the market remains positive in the long term.
For little over a decade, NOIDA and Greater NOIDA have developed into hubs of industrial activity and have,
therefore, received focus from hotel developers in recent times. However, with lack of demand for branded
hotel rooms coupled with a substantial increase in hotel room supply, performance of hotels within these
micromarkets has been declining. HVS is tracking a proposed supply of 5,615 rooms in NOIDA and Greater
NOIDA, of which 28% are actively under development and are expected to open over the next five years – an
increase of 87% over the existing base. Given such significant supply increase, we anticipate considerable
occupancy and average rate pressure over the next few years.
Pune
Pune is the second-largest city in the state of Maharashtra, and is also known as the cultural and educational
centre of the state. The economy of the city is centred on manufacturing and forging industries and more
recently on the automobile manufacturing and IT/ITeS sectors. Unlike other major cities, Pune lacks a
conventional CBD and demand for hotels is predominantly generated from the industrial pockets of Pimpri,
Chinchwad, Talegaon, Chakan, and Rajangaon, along with the IT hubs of Hinjewadi, Magarpatta and
Kharadi. In 2012-13, the city witnessed a growth in occupancy as growth in demand outpaced change in
supply. Demand growth was fuelled by new projects being set up in Talegaon, Chakan, and Hinjewadi.
Additionally, the city witnessed tremendous increase in Meetings, Incentives, Conferences & Events (MICE)
demand as it played host to several large-scale conferences and weddings. As hotels continued to focus on
building occupancy levels, average rates declined moderately in 2012-13 when compared with those in
2011-12.
Page 11
18. Going forward, in the short term, we anticipate strong growth in demand, led by the IT/ITeS sector. Demand
from the manufacturing sector, however, is expected to be subdued owing to the slowdown in the automobile
industry. Increase in supply is anticipated to be moderate over the next two to three years and will mainly be
concentrated in the pockets of Hinjewadi, Chakan and Nagar Road. With steady growth in demand and
modest increase in supply, we expect occupancy levels to continually improve. Average rate growth,
however, is expected to remain muted in the short term.
Thirteen Other Cities
Agra
Along with Delhi and Jaipur, Agra is a vital component of the immensely popular Golden Triangle leisure
itinerary in the country. Historically, the destination has largely focused on attracting demand from the
Individual and Group Leisure segments. With the opening of the Yamuna Expressway linking Greater
NOIDA to Agra in August 2012, which has significantly improved connectivity with Delhi-NCR, the city has
witnessed a surge in MICE demand. Also, with travel time reduced by half, growth in demand from the
Individual Leisure (Domestic) segment has seen a spurt especially during holidays and extended weekends.
This growth in demand, coupled with limited new branded room supply, resulted in an increase in both
occupancy and average rate in 2012-13 as compared to that in 2011-12.
Going forward, we expect continued growth in demand from the MICE and Individual Leisure (Domestic)
segments. Moreover, the city is anticipated to see the opening of over 750 rooms within the budget and mid
market space over the next three to four years. HVS believes that the addition in new supply will cause some
pressure on occupancy and average rates in the short term; however, we are of the opinion that the
development of midscale and budget hotels will fuel the growth in demand from the Domestic Leisure
segment. Furthermore, the recent introduction of domestic flights to the existing airport and the proposed
construction of a new civilian airport terminal is anticipated to improve connectivity and enhance tourism for
Agra.
Ahmedabad
Ahmedabad continues to grow rapidly as one of the important commercial hubs in the country. Room night
demand in Ahmedabad, driven primarily by the Commercial segment, is generated by companies located in
the CBD (Ashram and CG Road) with the industrial clusters along the periphery of the city. In the past few
years, owing to rapid development in the commercial sector, the Sarkhej Gandhinagar Highway (SG
Highway) along with the neighbouring areas of Prahlad Nagar and Satellite Town has gradually developed
into an alternate CBD. Furthermore, industrial clusters of Bol-Sanand and Vitthalapur are emerging as the
new automobile hubs with the existing Tata Nano plant and Ford and Maruti factories under development.
Other multinational corporations like Bosch, Hitachi, Baosteel, and Nestle are also developing units in these
upcoming industrial estates.
These commercial developments have led to a surge in room night demand in Ahmedabad. Also, seven new
hotels with a combined inventory of 700 rooms opened in the city in 2012-13. Thus, while the city has seen a
double-digit demand growth, supply has outpaced demand resulting in a decline in occupancy and average
rate in 2012-13. This trend is likely to continue in the short term as an additional ten hotels with an aggregate
supply of 1,500 rooms are expected to enter the market over the next two years (of which four hotels with an
aggregate supply of 400 rooms have opened till November 2013). In the medium to long term, as new
developments like Gujarat International Finance Tec-City, Mindspace, Sabarmati Riverfront Project and
industrial activity along the western periphery of the city gain momentum and as supply pressure reduces,
we anticipate occupancies and average rates to stabilise and improve thereafter.
Page 12
19. Bhopal
Bhopal's economy is driven by electrical goods, cotton, handicrafts, and jewellery. The city is also home to the
Govindpura Industrial Estate, which houses the BHEL manufacturing plant. Additionally, areas such as TT
Nagar and Maharana Pratap Nagar (MP Nagar) continue to see a growth in financial institutions, banks,
service providers such as telecommunications companies, and insurance firms.
Bhopal also serves as a rail and road hub, and it is amongst the best connected cities in the country. It provides
daily transport to prominent tourist destinations in Madhya Pradesh such as Ujjain, Jabalpur, Gwalior,
Khajurao, and the renowned Buddhist Stupas of Sanchi, located 46 km northeast of Bhopal. Currently, the
hotel market is largely unorganised, consisting of small boutique and heritage properties. Going forward, we
expect the market to grow and attract Commercial, MICE, and Leisure business in the medium to long term.
Coimbatore
Coimbatore, situated along the western extremity of Tamil Nadu and surrounded by the Western Ghats, is
one of the fastest growing Tier II cities in India. The city is a municipal corporation as well as headquarters of
the Coimbatore district.
Coimbatore is one of the most industrialised cities in Tamil Nadu and is known for textiles, information
technology and healthcare. It is increasingly well-known for its high quality yet affordable healthcare. The
medical facilities in Coimbatore generate demand from neighbouring towns in Tamil Nadu and Kerala as well
as from overseas locations like Sri Lanka, Malaysia, and Singapore. Coimbatore also has more than 25,000
small to large-scale industries, and major SEZs such as Coimbatore Hi-Tech Infrastructure and IT SEZ by
Electronics Corporation of Tamilnadu (ELCOT) near Peelamedu. The city continues to see the entry of new IT
parks and is next only to Chennai in IT software production in the state. Coimbatore also has a large
manufacturing industry producing automotive components, pumps and wet grinders. It is served well by
road, rail and an international airport making the city easily accessible.
Traditionally, the city has supported a small base of hotel rooms, predominantly in the mid market and budget
segments catering to demand emanating from the Commercial and MICE segments. However, in the last few
years, the city has seen the entry of international and branded players such as Le Meridien, Aloft, Park Plaza,
and Vivanta by Taj.
Gurgaon
Gurgaon, the second-largest city and the industrial and financial centre of Haryana, is located south of the
national capital. Over the past decade, Gurgaon has emerged as the preferred choice for relocation for many
of India's, and in particular, Delhi's multinational companies due to its proximity to the Indira Gandhi
International Airport and lower rentals as compared to Delhi. Additionally, Gurgaon's connectivity with
Delhi has improved over the last few years with the development of the Delhi-Gurgaon Expressway and the
Delhi Metro.
The Commercial segment has, over the years, established itself as Gurgaon's strongest demand generator. The
demand generators for this segment in Gurgaon are widespread and traditionally include IT/ITeS,
pharmaceutical, manufacturing, and organisations in the services sector such as banks, telecommunications,
and consulting firms. Furthermore, increasing Commercial demand is being generated by infrastructure and
construction companies as new projects are continually launched in the city.
Over the past few years, Gurgaon has continued to witness strong year-on-year growth in demand for room
nights, making it one of the strongest markets in the country. In 2012-13, Gurgaon witnessed the supply for
room nights outpace its demand, which resulted in a decline in occupancy and average rates. However, in the
medium-to-long term, with relatively slow paced growth in supply coupled with continuous growth in
commercial development in and around the city, our outlook for the Gurgaon market remains buoyant.
Page 13
20. Hyderabad
Hyderabad, the capital city of Andhra Pradesh, has evolved into a bustling metropolis and IT city with 75% of
its commercial space occupied by IT/ITeS companies. Demand is primarily Commercial in nature followed by
MICE. In the recent past, the city has also witnessed the establishment of the first International Convention
Bureau, set up with an aim to market Hyderabad globally as an attractive MICE destination and generate
demand for the city hotels. Hyderabad's economy benefits from industrial parks and SEZs spread across the
western boundaries of the city in Madhapur and Gachibowli. Hyderabad Information Technology and
Engineering Consultancy (HITEC) City in Madhapur is spread over 1,500 acres of land and has primarily
IT/ITeS developments. As Madhapur is reaching saturation levels, business is expanding to Gachibowli,
which now houses the Indian School of Business, Microsoft, Polaris, and the Infosys campus. Together with
Gachibowli, HITEC is now the leading demand generator for most of the hotels in Hyderabad.
However, in the past few years Hyderabad witnessed wide-spread disturbance due to the demand for
Telangana state. This resulted in a loss in investor confidence with business getting affected throughout the
city. We believe that the current uncertainty will continue to have a negative impact on new investments and
that investor sentiment will remain muted until this situation is resolved.
During the past year, Hyderabad has witnessed an increase of 20% in supply and HVS is currently tracking a
supply of 5,433 rooms over the next five years, with an 87% probability factor of these rooms actually opening
for operations. A majority of the supply is expected in the areas of Gachibowli and HITEC City. HVS is of the
opinion that although demand will continue to grow, the impending supply pressures are likely to keep the
occupancy and average rates fairly muted in the short run.
Indore
Indore, the largest city of Madhya Pradesh, is also the economic and commercial capital of the state. The city is
well connected and served by Devi Ahilyabai Holkar International Airport, which is also a hub for
international cargo. The hotel demand in the city is primarily Commercial, originating from the Pithampur
and Dewas industrial areas. Textile manufacturing and trading remain key economic activities. Indore is a key
centre for major automobile units like Force Motors and Eicher Motors. Other key manufacturing units that
are housed in Pithampur Industrial Area, located 22 km from Indore, are Bridgestone, Larsen & Toubro, TATA
Steel, Panasonic Energy, Cipla, and Ipca Laboratories. Asia's largest auto testing track is being built in the
industrial town of Pithampur to cater to the growing automobile industry of the country. Indore is also the
closest major town to the famous Hindu pilgrim destinations situated in Ujjain and Narmada and, hence, the
city receives a limited amount of Leisure demand.
The city hosts the prestigious Global Investors Summit (GIS) attracting investors from more than 20
countries. The third GIS, held on 18-20 October 2012, attracted considerable interest from companies such as
Future Group, TCS, Steel Authority of India Limited, and Bharat Forge. Going forward, Indore can expect to
see planned investments, which are anticipated to create jobs and boost the economy of the city and state.
The current landscape consists of mid market and budget hotels and we are currently tracking 230 rooms in
the branded budget space. The Indore hotel market is expected to benefit from the anticipated investments
and expansions in Indore and limited increase in hotel supply.
Jaipur
Jaipur ranks amongst the top leisure destinations of the country. The city has witnessed a rapid growth in
hotel supply over the last two to three years with the opening of several new properties across different
positionings in various pockets of the city. Consequently, the city has come under some occupancy and ARR
pressure; however, demand for hotels still continues to be robust and has shown steady year-on-year growth.
The Leisure segment, though highly seasonal, still continues to be the top draw for the city. With more hotels
now being available in the city at a budget to mid market positioning, the Domestic Leisure segment has
Page 14
21. witnessed healthy growth over the last two to three years. Furthermore, MICE as a segment has become
increasingly favourable with the opening of hotels like the Fairmont, LaLit, and Marriott that offer large room
inventories as well as significant meeting spaces that cater to large-scale events. ‘Destination Weddings’ have
become synonymous with the city, with hotels offering an ideal setting and historical splendour to host grand
Indian weddings. Jaipur's much improved highway connectivity with Gurgaon and Delhi, in addition to the
competitive room rates, make it ideal for short-stay conferences and events.
Going forward, the city is expected to see a further increase in supply over the next three to four years. While
this is anticipated to result in further occupancy and rate pressures, supply pace in the long term is
anticipated to be slow. Furthermore, airline connectivity is anticipated to improve considerably, thereby,
providing a further fillip to the growing MICE and Domestic Leisure segments of the city. Overall, our
outlook for Jaipur over the long term remains positive.
Kochi
Kochi, formerly known as Cochin, is located in the north of Kerala, off the Arabian Sea shore. Although,
Thiruvananthapuram is the state capital of Kerala, Kochi is regarded as the commercial capital due to its welldeveloped port facilities and commercial centres. The city also has one of the highest literacy rates and
human indices for development in the country.
In addition to serving the role of Kerala's commercial hub, Kochi acts as the gateway city to the states's most
popular tourism circuit comprising Marari, Alleppey, Kumarakom, Thekkady, and Munnar. Consequently,
the Commercial segment driven primarily by the shipping and port sector constitutes a major portion of
demand accommodated by hotels. Going forward, the planned development of Smart City, a `3,000-crore IT
Township spread across 250 acres, will augment the growth of Commercial demand. Over the last few years,
MICE and Leisure segments have also gained share and further growth is expected with the opening of new
hotels such as the Crowne Plaza with its extensive meeting facilities.
Going forward, we are tracking approximately 2,000 rooms planned to enter the market over the next few
years. About 60% of the new supply lies in the budget and mid market space; in our opinion this trend bodes
well for the market as it is anticipated to drive growth in demand from the Domestic Leisure segment.
Nagpur
Nagpur, a major commercial and political centre in the Vidarbha region of Maharashtra, is the third-most
populous city after Mumbai and Pune in the state. The Vidarbha region holds two-thirds of the state's mineral
resources and three-quarters of forest resources, making Nagpur a power centre. Located at the geographic
centre of the country, the city enjoys relatively easy access to major cities like New Delhi, Mumbai,
Hyderabad, and Bengaluru due to NH-7 and NH-6, which run north-south and east-west, respectively. The
city's economy is largely dependent on trading, manufacturing and agriculture. The future of the city also
hinges on the Multi-Modal International Hub Airport Nagpur (MIHAN) planned over 4,354 hectares and
targeted to be a hub for both passengers and cargo, handling 14 million passengers and over 8.7 lakh tonnes
of cargo a year.
Historically, majority of demand for hotel room accommodation in Nagpur originated from industrial estates
like Butibori, Hingna and Wadi; however, over the years the demand generation capacities from these
industrial estates has reduced. Bulk of the Commercial demand is now being generated by financial services,
banking and trading companies located within the city's CBD. Demand from sectors such as telecom,
pharmaceuticals, and insurance has also been growing consistently. Nagpur also attracts some Leisure
demand given its proximity to tiger reserves such as Pench and Kanha.
Page 15
22. Shimla
Shimla, the capital city of Himachal Pradesh, is one of the earliest established hill stations in India and
amongst the top leisure hill destinations (by annual visitors) in North India. The city receives a large majority
of Domestic Leisure travellers, given its proximity to key cities such as Delhi, Ludhiana, Jalandhar,
Chandigarh, and Amritsar. The highlight of the travel experience to Shimla is the 2.6-metre-wide narrow
gauge rail network between Kalka and Shimla that has also been recognised by UNESCO as a World Heritage
Site.
Shimla's economy is primarily driven by travel & tourism and agriculture. Recently, there has been a growth
in the inventory of budget and mid market hotel rooms in Shimla. With respect to the luxury and upscale
positioning, the Oberoi Cecil, Wildflower Hall, and Radisson are the three operating hotels. We are currently
tracking 200 rooms in the branded mid market space and anticipate this to support the Domestic Leisure
demand.
Thiruvananthapuram
Formerly known as Trivandrum, Thiruvananthapuram is the capital city of Kerala. Apart from being a
political hub, it is also home to major academic institutions with the most prominent ones being Indian Space
Research Organisation (ISRO), Vikram Sarabhai Space Centre (VSSC), and Rajiv Gandhi Centre for
Biotechnology. Historically, majority of the population in the city had been employed in the government
sector. However, of late, the city has seen a surge in IT/ITeS and Biotechnology professionals with the city
contributing 80% to the state's IT software export. Thiruvananthapuram's 300-acre Technopark, home to over
290 companies, is currently under expansion. The planned development of 90 acres of office space along with
450 acres of an integrated IT township is expected to create much needed growth and demand for the city.
Thiruvananthapuram also serves as the gateway city to the rest of Kerala, with the state itself being a very
popular tourist destination for international and domestic tourists. The city also experiences a healthy
amount of demand from the medical tourism sector given the number of Ayurvedic centres across the state.
Given Thiruvananthapuram's emergence as a Tier II destination with the adequate mix of talent,
infrastructure and local industry resources, the city has the capacity to meet the needs of different sectors.
Given the fact that there is limited hotel supply expected in the next few years, the city's hotel market is
expected to experience moderate growth.
Vadodara
Vadodara (formerly Baroda) is one of the three important cities in Gujarat and is located on NH-8 between
Ahmedabad and Surat. The city has good connectivity to Delhi and Mumbai – by road, rail and air – which
serve as the city's top feeder markets. Vadodara acts as the entry/exit point for major industrial zones such as
Savli and Halol (located on the periphery of the city) along with the industrial townships of Dahej, Bharuch,
and Ankleshwar. These industrial zones are focused on chemicals, power, petrochemicals, oil and gas sectors
and are home to manufacturing plants of companies such as Larson and Toubro, ONGC, Alstom, Linde,
Bombardier, Adani and Reliance. Over the last few years, these zones have witnessed tremendous
development driven by the availability of raw materials, skilled labour, and Special Economic Zones (SEZ).
Consequently, a major share of the room night demand for hotels in Vadodara is generated from these
industrial areas. While new factory setups and expansions of existing plants have contributed to the growth
in demand, opening of new hotels in recent years and absorption of room nights by some of the new hotels in
Bharuch and Ankleshwar have added to supply pressures. These factors, combined with major companies
setting up guesthouses close to their plants, have resulted in a decline in both occupancies and average rates
in the city. With additional branded hotels under development in the city, this trend is likely to continue in the
short term. However, continued investment in the region supported by a pro-incentive state government
along with expansions planned in existing manufacturing units, is anticipated to drive steady growth of
demand for hotels located in Vadodara.
Page 16
23. 1. Indian Hotel Industry – Star Category
Introduction
This section presents the results of the performance of the hotels analysed according to the star classification
of the hotels participating in the Survey. An overall total of 1,450 hotels (Table 1-1) participated in the Survey
for 2012-13. The hotels have been classified into the eight star categories applicable in India.
To provide further comparisons, we have included a column for all India averages across all star categories.
Each section includes the total number of respondents for each component of the survey, allowing the reader
to judge the validity of the data received.
All figures pertain to 2012-13 (April-March), and monetary figures are in Indian rupees (`).
Trends
•
Rooms Profile: The Survey results reveal that the three, two, and one-star hotels, along with heritage
and others category make up 84% of the respondents; this contributes to the all India average of 58
rooms per hotel. Another observation is that the average inventory continues to decline from higher to
lower category, implying that the lower category and smaller hotels do not benefit from economies of
scale. Their Net Incomes as a percentage of total revenues are also lower when compared with hotels of
higher categories. Going forward, with the increasing demand for budget and mid market hotels, HVS
believes that lower category hotels will increase in number and also have larger inventories.
•
Departmental Expenses: We note that departmental expenses steadily increase as a percentage of
departmental revenues as the category of hotels decreases. The Rooms expense is as high as 35.7% and
28.1% for the two star and one-star hotels respectively, as compared to 19.1% and 18.5% for the five-star
deluxe and five-star hotels, respectively. Poor performance of the Rooms department with respect to
occupancy levels and low average rates results in the departmental expenses being high when
represented as a percentage of departmental revenue. Also, Food & Beverage expenses range from 63%
to 70% of the departmental income in three and one-star hotels as against 50% in five and five-star
deluxe categories. As discussed earlier, the smaller inventories of the lower category of hotels do not
allow them to achieve economies of scale. We believe that the increasing operating and manpower costs
present an opportunity for hotels to streamline their operations by opting to outsource departments
such a Laundry, Housekeeping and Food & Beverage.
•
Market Segmentation and Guest Analysis: There is a difference in the customer segmentation across
star categories with lower categories recording a higher contribution from the Domestic segment while
the five-star deluxe hotels record a higher contribution from the foreign traveller. These results suggest
the price sensitivity of the local traveller. The business travellers continue to drive demand across star
categories except heritage hotels, which are typically located in leisure destinations. As mentioned
earlier, the FHRAI Survey results reveal a year-on-year increase of 17% in the Meeting Participants
segment over the previous fiscal.
Page 17
24. TABLE 1-1: Indian Hotel Industry – Star Category: Facilities Analysis and Staffing
Typical Room Profile of an Average Hotel
COMPOSITION
Number of Responses
Five-Star
Room Category
Deluxe
46
Five-Star
69
Four-Star
123
Three-Star
519
Two-Star
268
One-Star
95
Heritage
55
Others
275
2012-2013
All India
Average
1,450
Air-Conditioned
Single
Double
Suites
50.4
152.9
17.4
21.3
104.3
7.3
11.8
72.1
8.5
4.6
39.4
4.5
3.6
26.9
3.3
1.2
15.0
1.5
2.3
21.9
6.8
2.8
21.7
2.8
6.6
40.9
4.7
Non-Air-Conditioned
Single
Double
Suites
0.0
0.0
3.7
224.4
0.0
1.8
0.1
134.7
0.0
1.8
0.2
94.3
0.6
3.9
0.5
53.4
0.9
6.5
1.0
42.2
2.1
7.0
0.5
27.3
0.3
3.9
0.9
36.0
0.8
6.0
0.5
34.5
0.7
4.6
0.7
58.1
Total average rooms
* The number of non-air-conditioned rooms in lower star category hotels appears to be higher, partly because many are located in hill stations where
air-conditioning is not provided in hotels.
Average Number of Food & Beverage Outlets Per Hotel
Five-Star
Deluxe
45
COMPOSITION
Number of Responses
Restaurants
Bars
Others
Total
3.4
1.4
1.1
5.9
Five-Star
65
Four-Star
110
2.8
1.2
0.9
4.9
2.1
1.1
1.1
4.2
Three-Star
458
1.5
0.9
1.0
3.4
Two-Star
200
1.3
0.6
0.7
2.6
One-Star
69
1.1
0.5
0.3
1.9
Heritage
46
1.7
0.8
0.5
2.9
2012-2013
All India
Others
Average
172
1,165
1.4
0.7
0.6
2.6
1.7
0.8
0.8
3.3
Average Number of Employees Per Hotel (Permanent / Contract / Full Time / Part Time)
Five-Star
Deluxe
46
COMPOSITION
Number of Responses
Managers
Supervisors
Staff
Male
Female
Male
Female
Male
Female
Total
Avg. Employees / Room
Five-Star
61
Four-Star
107
Three-Star
468
Two-Star
236
One-Star
87
Heritage
50
Others
185
2012-2013
All India
Average
1,238
49.7
12.8
54.2
11.6
262.5
34.2
425.0
29.4
5.5
37.7
5.4
153.3
15.4
246.8
16.7
2.8
21.9
3.1
111.4
12.3
167.0
6.8
0.8
10.3
1.5
61.1
7.4
87.9
3.2
0.6
4.6
0.8
33.4
3.8
46.4
1.9
0.2
2.5
0.8
19.6
2.2
27.2
5.3
0.7
8.1
0.6
52.4
4.0
71.2
3.0
0.4
4.0
0.6
28.5
3.1
39.6
8.7
1.5
11.6
1.9
64.0
7.5
95.1
1.9
1.8
1.7
1.7
1.1
1.0
2.0
1.2
1.6
Average Percentage of Trained Employees Per Hotel
Five-Star
Deluxe
44
Five-Star
55
Four-Star
97
Three-Star
333
Managers
94.4%
89.2%
90.1%
88.2%
Supervisors
89.8
87.5
87.4
Staff
80.9
92.3
Total Avg. Trained Employees*
Total Avg. Un-Trained Employees
88.4
11.7
89.7
10.3
COMPOSITION
Number of Responses
Two-Star
142
2012-2013
All India
Others
Average
76
819
One-Star
39
Heritage
33
86.8%
83.9%
88.4%
88.7%
79.8
73.8
83.1
93.8
81.6
83.6
73.4
63.2
59.2
62.4
66.3
63.3
66.7
83.7
16.4
77.1
22.9
73.3
26.8
76.5
23.5
82.8
17.2
77.9
22.1
79.6
20.4
88.4%
* Trained Employees includes those with a minimum one-year certificate course from a hotel management or equivalent institution; however, some
hotels may have included those with short term (in-house) training.
Page 18
28. TABLE 1-5: Indian Hotel Industry – Star Category: Market Data
Market Segmentation
COMPOSITION
Number of Responses
Airline Crew
Business Traveller - Domestic
Business Traveller - Foreign
Complimentary Rooms
Domestic - Tourists/Leisure FIT
Foreign - Tourists/Leisure FIT
Meeting Participants (Less than 100 Attendees)
Meeting Participants (Over 100 Attendees)
Tour Groups - Domestic
Tour Groups - Foreign
Other
Total
Five-Star
Deluxe
43
7.3 %
16.1
15.9
2.4
12.6
14.8
4.0
9.3
3.4
6.5
7.6
100.0
Five-Star
62
2.3 %
21.1
16.3
2.3
16.6
8.4
5.0
11.4
4.5
7.3
4.8
100.0
Four-Star
98
Three-Star
375
2.6 %
30.7
13.7
2.1
13.7
8.0
5.6
7.1
5.7
6.9
3.9
100.0
1.1 %
31.1
7.5
2.1
19.9
8.3
4.7
9.4
7.2
5.2
3.6
100.0
Two-Star
196
0.6 %
36.4
6.9
1.7
21.6
6.2
4.3
6.4
9.0
2.9
4.1
100.0
One-Star
65
0.4 %
32.5
7.0
1.7
29.2
5.9
4.3
5.4
6.6
2.7
4.3
100.0
Heritage
44
0.0 %
13.3
8.2
3.0
25.1
21.4
2.1
2.8
7.1
13.0
3.9
100.0
Others
101
0.2 %
31.1
7.3
1.9
25.0
6.2
4.5
9.2
8.2
4.3
2.2
100.0
2012-2013
All India
Average
984
1.3%
30.1
8.9
2.0
20.5
8.4
4.5
8.1
7.1
5.2
3.9
100.0
Guest Analysis
COMPOSITION
Number of Responses
Five-Star
Deluxe
46
Five-Star
64
Four-Star
105
Three-Star
405
Domestic Guests
Foreign Guests
Total
47.7 %
52.3
100.0
62.9 %
37.1
100.0
66.7 %
33.3
100.0
77.7 %
22.3
100.0
Total Business Guests
Total Leisure Guests
Total
63.1
36.9
100.0
62.2
37.8
100.0
61.4
38.6
100.0
60.0
40.0
100.0
2.5
2.0
1.9
2.2
41.8
4.1
2.3
2.2
2.2
36.0
3.4
2.4
3.0
2.2
43.5
3.1
2.8
3.0
2.3
45.5
Avg. Stay of Foreign Guests (Days)
Avg. Stay of Domestic Guests (Days)
Avg. Stay of Business Guests (Days)
Avg. Stay of Leisure Guests (Days)
Percentage of Repeat Guests
Two-Star
215
81.4 %
18.6
100.0
One-Star
68
Heritage
44
Others
115
2012-2013
All India
Average
1,062
86.8 %
13.2
100.0
54.7 %
45.3
100.0
83.6 %
16.4
100.0
75.2 %
24.8
100.0
55.5
44.2
99.7
58.8
41.2
100.0
27.9
72.1
100.0
60.5
39.4
100.0
58.2
41.8
100.0
2.9
2.8
2.7
2.5
50.9
2.2
2.0
2.0
2.0
48.1
2.4
2.0
2.0
2.2
28.5
2.7
5.0
2.3
2.9
48.4
3.0
2.7
2.7
2.3
45.7
Country of Origin of Guests
COMPOSITION
Number of Responses
ASEAN*
Australia
Canada
Caribbean
China
France
Germany
Japan
Middle East
Other European Countries
Russia
SAARC **
South Africa
UK
USA
Other
Total
Five-Star
Deluxe
33
3.5 %
2.1
2.2
0.4
1.8
4.4
4.2
4.0
4.2
6.9
1.3
4.2
1.7
11.7
16.9
30.5
100.0
Five-Star
52
3.5 %
3.1
2.1
0.5
4.1
3.3
4.9
6.3
2.7
10.2
6.6
4.4
1.6
10.5
11.5
24.8
100.0
Four-Star
69
Three-Star
217
4.9 %
3.2
2.8
0.8
4.1
4.3
5.0
5.6
5.1
8.7
5.3
5.1
1.9
10.7
9.3
23.3
100.0
6.4 %
3.3
3.9
0.8
5.5
6.6
7.4
3.9
6.2
9.6
4.3
5.7
2.3
12.2
12.2
9.8
100.0
Two-Star
81
5.3 %
3.4
3.4
0.4
5.0
4.9
6.4
3.3
6.5
8.9
3.9
10.5
1.5
13.8
10.1
12.8
100.0
One-Star
19
2.6 %
6.0
2.2
0.8
3.7
8.8
5.2
2.6
9.9
11.3
2.3
10.2
2.5
10.0
9.2
12.6
100.0
Heritage
28
1.5 %
4.1
3.8
0.4
1.8
15.1
10.4
2.2
2.2
12.6
1.0
2.7
0.5
10.3
8.5
23.2
100.0
* ASEAN: Association of South East Asian Nations - Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam
** SAARC: South Asian Association for Regional Co-operation - Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives
Page 22
Others
26
4.0 %
6.9
3.5
1.2
7.0
6.8
4.1
3.2
2.9
8.5
2.4
11.6
2.6
10.6
7.4
17.5
100.0
2012-2013
All India
Average
525
5.1 %
3.5
3.3
0.7
4.7
6.1
6.4
4.1
5.4
9.4
4.0
6.4
1.9
11.8
11.2
16.0
100.0
29. TABLE 1-6: Indian Hotel Industry – Star Category: Monthly and Daily Occupancy
Average Monthly Occupancy
COMPOSITION
Number of Responses
January
February
March
April
May
June
July
August
September
October
November
December
Five-Star
Deluxe
45
71.5 %
77.2
68.8
65.3
59.3
58.9
59.2
60.9
64.2
67.8
70.8
69.9
Five-Star
62
66.4 %
70.8
63.8
61.0
55.9
56.7
53.4
53.3
55.0
59.5
65.7
65.7
Four-Star
105
Three-Star
400
68.8 %
71.2
62.8
61.5
61.4
55.4
53.7
58.0
57.5
62.1
67.8
68.1
61.7 %
63.9
56.7
57.3
59.2
55.1
51.6
52.2
55.6
58.6
63.3
67.1
Two-Star
209
67.4 %
61.9
58.5
59.6
64.5
66.5
55.4
55.0
56.5
65.0
63.8
68.7
One-Star
66
62.3 %
62.6
54.5
57.9
64.8
60.7
55.5
56.7
57.5
62.1
64.6
67.3
Heritage
44
53.8 %
59.9
55.3
49.9
48.1
45.1
39.3
45.3
43.0
54.0
62.7
58.6
Others
91
59.9 %
59.8
55.6
54.8
59.6
58.5
50.9
52.0
52.2
58.5
62.3
66.7
2012-2013
All India
Average
1,022
63.8 %
64.6
58.4
58.3
60.2
58.0
52.7
53.8
55.6
60.8
64.3
67.2
Average Daily Occupancy
COMPOSITION
Number of Responses
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
Five-Star
Deluxe
41
63.7 %
66.0
67.1
62.1
57.8
54.6
56.2
Five-Star
58
55.7 %
59.9
62.1
60.6
57.9
55.1
48.6
Four-Star
97
Three-Star
368
60.6 %
63.8
64.2
62.4
59.7
55.9
52.1
55.2 %
55.5
60.1
57.6
57.4
54.0
47.0
Two-Star
204
53.3 %
55.4
57.2
57.5
60.6
57.6
48.4
One-Star
63
54.9 %
54.9
57.7
57.7
62.1
61.2
53.9
Heritage
34
41.1 %
40.7
42.9
45.2
52.0
55.4
45.9
Others
93
55.7 %
56.6
57.7
57.1
60.0
54.3
43.7
2012-2013
All India
Average
958
55.3 %
56.6
59.3
58.0
58.7
55.6
48.4
TABLE 1-7: Indian Hotel Industry – Star Category: Sources of Reservations
Source of Advance Reservations
COMPOSITION
Number of Responses
Chain CRS (Central Reservation System)
Direct Enquiry / Hotel Representation
Global Distribution System (GDS)
Hotel / Chain Website
Travel Agent and Tour Operator
Other Online Reservation Systems
Other Website
Other
Total
Five-Star
Deluxe
43
8.0 %
43.2
8.9
7.8
15.5
6.5
5.4
4.7
100.0
Five-Star
60
6.4 %
45.1
6.3
6.7
16.5
6.0
5.6
7.4
100.0
Four-Star
100
Three-Star
393
5.6 %
44.6
3.4
9.1
18.4
5.2
7.6
6.2
100.0
3.7 %
50.1
1.7
8.2
19.4
3.5
7.3
6.0
100.0
Page 23
Two-Star
204
2.3 %
52.9
0.7
7.5
20.7
2.7
6.9
6.4
100.0
One-Star
62
1.1 %
63.8
0.2
3.6
16.5
0.9
5.2
8.7
100.0
Heritage
38
7.9 %
24.2
2.8
13.0
35.2
6.5
6.9
3.6
100.0
Others
101
2.7 %
58.1
0.9
6.7
17.6
1.1
5.7
7.2
100.0
2013-2013
All India
Average
1,001
3.8 %
50.2
2.1
7.8
19.5
3.5
6.8
6.3
100.0
30. TABLE 1-8: Indian Hotel Industry – Star Category: Marketing Media
Marketing Media
COMPOSITION
Number of Responses
Blogs
Direct Mail
Hotel Website
Loyalty Card program
Merchandising
Other Internet Sites
Outdoor Advertising
Pay Per Click
Print Advertising
Promotions
Radio Advertising
Telemarketing
TV Advertising
Viral Marketing
Five-Star
Deluxe
43
46.5 %
76.7
95.4
86.1
32.6
83.7
46.5
32.6
95.4
93.0
37.2
46.5
23.3
23.3
Five-Star
62
22.6 %
79.0
90.3
71.0
33.9
71.0
72.6
25.8
93.6
87.1
46.8
48.4
27.4
25.8
Four-Star Three-Star
105
410
33.3 %
83.8
95.2
55.2
42.9
70.5
72.4
21.9
92.4
84.8
43.8
70.5
29.5
20.0
17.3 %
79.3
88.5
29.8
23.7
67.1
59.3
15.9
85.9
69.0
24.4
54.6
26.1
13.4
Two-Star
206
14.1 %
76.7
80.6
23.3
18.5
66.0
54.9
9.2
85.4
57.3
17.5
38.8
18.5
8.7
One-Star
61
3.3 %
70.5
63.9
16.4
18.0
55.7
49.2
4.9
70.5
47.5
0.0
26.2
9.8
6.6
Heritage
45
26.7 %
86.7
91.1
33.3
35.6
71.1
64.4
13.3
84.4
77.8
15.6
48.9
35.6
13.3
2012-2013
All India
Others
Average
105
1,037
8.6 %
62.9
77.1
21.0
15.2
47.6
44.8
9.5
68.6
47.6
15.2
32.4
20.0
5.7
18.5
77.2
85.5
34.3
24.9
65.7
58.2
15.0
84.6
67.3
24.1
48.2
23.7
13.1
TABLE 1-9: Indian Hotel Industry – Star Category: Payment Methods
Payment Methods Used
COMPOSITION
Number of Responses
Cash Sales
Credit Card Sales
Credit Sales (other than cards)
Electronic Fund Transfer
Total
Five-Star
Deluxe
41
Five-Star
50
Four-Star
89
Three-Star
347
Two-Star
186
One-Star
61
Heritage
41
Others
88
2012-2013
All India
Average
903
14.1%
49.6
28.1
8.2
100.0
20.4%
41.7
28.8
9.2
100.0
24.9%
38.2
29.1
7.9
100.0
36.4%
34.7
20.2
8.8
100.0
48.1%
30.3
13.8
7.9
100.0
61.0%
22.8
10.4
5.9
100.0
32.6%
25.9
31.2
10.3
100.0
54.2%
27.1
11.9
6.8
100.0
39.0%
33.2
19.6
8.2
100.0
Credit Cards Used
COMPOSITION
Number of Responses
American Express
Diners Club
Mastercard / Eurocard
Visa
Other
Total
Five-Star
Deluxe
40
Five-Star
51
Four-Star
87
Three-Star
314
Two-Star
151
One-Star
40
Heritage
35
Others
63
2012-2013
All India
Average
781
30.2%
3.0
28.6
35.9
2.3
100.0
20.3%
1.9
34.0
38.7
5.1
100.0
13.9%
1.8
34.4
46.5
3.3
100.0
7.3%
1.6
40.7
45.2
5.1
100.0
3.6%
1.4
40.4
49.3
5.5
100.0
1.7%
3.0
39.5
50.5
5.3
100.0
7.7%
1.5
36.4
45.7
8.7
100.0
6.1%
2.1
37.9
48.1
5.8
100.0
9.0%
1.8
38.4
45.8
5.1
100.0
Average Credit Card Commission
COMPOSITION
Number of Responses
American Express
Diners Club
Mastercard / Eurocard
Visa
Other
Five-Star
Deluxe
40
Five-Star
49
Four-Star
77
Three-Star
238
Two-Star
124
One-Star
35
Heritage
32
Others
42
2012-2013
All India
Average
637
3.2%
1.8
1.1
1.1
0.3
3.7%
0.8
1.9
2.1
0.3
3.5%
1.1
2.2
2.7
0.2
3.0%
0.4
1.9
1.9
0.3
1.6%
0.4
1.7
1.7
0.3
1.0%
0.4
1.8
1.9
0.3
2.9%
0.3
1.8
1.9
0.3
1.6%
0.3
2.9
2.8
0.2
2.7%
0.6
1.9
2.0
0.3
Page 24
31. TABLE 1-10: Indian Hotel Industry – Star Category: Technology Management Practices
Technology in Hotels
COMPOSITION
Number of Responses
Accounting System
Call Accounting System
Central Reservation System (CRS)
Electronic Keycard
Energy Management System
Internet / E-Mail
Internet / Website
Intranet System
Local Area Network (LAN)
Management Information System
Point of Sale System for Food and Beverage
Property Management System
Yield Management System
Other
Five-Star
Deluxe
34
Five-Star
47
94.1%
79.4
73.5
91.2
52.9
100.0
97.1
88.2
97.1
85.3
100.0
94.1
58.8
14.7
95.7%
83.0
61.7
85.1
38.3
100.0
100.0
59.6
100.0
78.7
97.9
80.9
29.8
19.2
Four-Star Three-Star
98
364
95.9%
74.5
49.0
75.5
51.0
98.0
95.9
60.2
91.8
79.6
92.9
81.6
38.8
13.3
Page 25
89.8%
54.7
35.7
45.6
30.0
97.0
90.1
48.6
83.0
69.5
80.8
52.8
22.3
10.4
Two-Star
191
One-Star
61
Heritage
41
87.4%
42.4
17.3
22.0
14.7
90.6
83.3
36.1
69.6
39.3
50.3
29.3
13.1
3.1
83.6%
27.9
4.9
14.8
3.3
88.5
63.9
16.4
52.5
23.0
32.8
13.1
1.6
0.0
90.2%
41.5
51.2
9.8
12.2
97.6
97.6
68.3
70.7
63.4
70.7
41.5
14.6
4.9
2012-2013
All India
Others Average
87
923
86.2%
36.8
8.1
25.3
11.5
85.1
81.6
37.9
62.1
33.3
57.5
27.6
11.5
4.6
89.7%
52.6
32.1
42.0
26.0
94.4
87.9
47.0
78.0
58.6
71.5
48.4
21.1
8.3
32. 2. Indian Hotel Industry – Inventory and
Chain Affiliation
Introduction
In this section, we present key operating statistics and other data for the Survey participants according to the
number of rooms. The participating hotels have been classified into three categories: 'Less than 50 rooms', '50
to 150 rooms', and 'More than 150 rooms'. We have also drawn a comparison between Chain Affiliated and
Independent hotels.
Trends
•
Room Profile and Facilities: Chain Affiliated hotels tend to offer more expansive facilities (116 rooms
and 4.5 Food & Beverage outlets on an average) as compared to independent ones (49 rooms and 3.1
Food & Beverage outlets on an average). Suites constitute a higher percentage (11%) of the total room
inventory of hotels with less than 50 rooms as compared to the other categories. This is because heritage
properties, with their small room count and relatively large suite inventory form a large portion of this
category. We note that there is a distinct difference in the facilities of chain affiliated and independent
hotels.
•
Total Employees per Hotel: It is interesting to note that there is not much difference in the
employee-to-room ratio between differently sized hotels, which suggests some amount of inefficiency
especially in the smaller sized ones. However, in India even hotels with small inventories provide
various facilities such as F&B outlets, laundry, and room service amongst others, which leads to these
ratios.
•
Profitability: The Net Income percentage of chain affiliated hotels is observed to be higher than that of
independent hotels. This is primarily because the chain hotels are better at managing departmental
costs through strong standard operating procedures and trained staff. FHRAI results have also shown
the benefits of economies of scale that larger hotels achieve, and control both departmental and
operating expenses effectively.
•
Marketing Media: The Survey reveals a greater percentage usage of loyalty card programmes, hotel
websites, blogs, merchandising and telemarketing by the chain affiliated hotels as they are able to
leverage on their brand name and reach.
•
Technology: Larger-sized hotels focus on yield management systems, management information
systems and other technology such as electronic key cards and LAN networks. Hotels with smaller
inventories continue to use more traditional accounting systems with the adoption of other
technologies being limited. Typically, the chain affiliated hotels tend to have larger inventories, and
standardised procedures and strong information management systems, hence, recording a greater
usage of technologies when compared with independent hotels.
Page 26
33. TABLE 2-1: Indian Hotel Industry – Inventory & Chain Affiliation: Facilities Analysis
and Staffing
Typical Room Profile of an Average Hotel
COMPOSITION
Number of Responses
Room Category
Less Than
50 Rooms
887
50 to 150
Rooms
485
More Than
150 Rooms
78
Chain
201
Independent
1,249
Air-Conditioned
Single
Double
Suites
2.3
20.3
2.8
9.0
57.1
6.5
40.6
174.6
14.8
20.1
83.9
8.2
4.4
34.0
4.1
Non-Air-Conditioned
Single
Double
Suites
0.6
4.2
0.5
30.7
0.9
5.7
0.8
80.0
0.0
2.3
2.2
234.5
0.2
2.2
1.2
115.8
0.8
5.0
0.6
48.9
Total Average Rooms
Average Number of Food & Beverage Outlets Per Hotel
Less Than
50 Rooms
671
COMPOSITION
Number of Responses
1.3
0.7
0.6
2.7
Restaurants
Bars
Others
Total
50 to 150
Rooms
420
1.9
1.0
1.0
3.8
More Than
150 Rooms
74
3.2
1.3
1.4
5.8
Chain
181
Independent
984
2.3
1.1
1.1
4.5
1.5
0.8
0.7
3.1
Average Number of Employees Per Hotel (Permanent / Contract / Full Time / Part Time)
Less Than
50 Rooms
749
COMPOSITION
Number of Responses
Managers
Supervisors
Staff
50 to 150
Rooms
415
More Than
150 Rooms
74
Chain
188
Independent
1050
3.5
0.5
4.9
0.7
33.2
3.8
46.5
Total
Average Number of Employees per Room
11.5
1.6
16.1
2.4
88.0
10.2
129.9
44.8
11.1
53.8
10.5
241.8
29.4
391.4
22.2
4.6
26.2
4.1
132.7
14.5
204.3
6.2
1.0
9.0
1.5
51.7
6.2
75.5
1.5
Male
Female
Male
Female
Male
Female
1.6
1.7
1.7
1.5
Average Percentage of Trained Employees Per Hotel
Less Than
50 Rooms
439
50 to 150
Rooms
312
More Than
150 Rooms
68
Chain
166
Independent
653
88.1%
88.6%
89.6%
94.7%
86.9%
Supervisors
81.2
80.9
86.8
100.4
79.4
Staff
62.4
70.9
75.3
82.9
62.6
Total Avg. Trained Employees*
Total Avg. Un-Trained Employees
77.3
22.8
80.2
19.8
83.9
16.1
89.3
10.7
76.3
23.7
COMPOSITION
Number of Responses
Managers
some hotels may have included those with short term (in-house) training.
Page 27
34. Page 28
248,833
524,459
7,925
41,222
5,463
827,901
1,708,460
1,346,120
678,193
362,499
11,262
76,359
61,932
2,536,360
241,252
66,497
78,264
16,956
135,164
237,045
775,177
933,283
21,089
8,716
40,469
39,184
109,457
823,825
18.5
50.4
70.4
54.0
8.8
32.6
67.4
53.1%
26.7
14.3
0.4
3.0
2.4
100.0
Percentage
of Revenue
131
28,964
60.1%
6,083
Amount per
Available
Room ( ` )
140
9.5
2.6
3.1
0.7
5.3
9.4
30.6
36.8
0.8
0.3
1.6
1.5
4.3
32%
95
39
183
177
495
3,723
1,090
301
354
77
611
1,071
3,503
4,218
1,124
2,370
36
186
25
3,741
7,721
6,083
3,065
1,638
51
345
280
11,462
Amount per
Occupied
Room ( ` )
0.8
0.3
1.3
1.0
3.4
27%
9.5
1.3
3.0
0.3
6.5
10.3
30.8
30.5
20.3
60.8
133.7
80.5
9.8
38.7
61.3
51.3%
31.7
9.7
0.3
2.9
4.2
100.0
Percentage
of Revenue
11,991
4,619
17,884
13,777
48,270
387,134
136,310
18,495
42,326
3,703
93,417
146,391
440,642
435,404
148,898
359,407
4,981
32,956
5,913
552,154
876,045
731,956
452,795
138,710
3,726
40,941
60,071
1,428,200
58
12,275
60.5%
3,442
Amount per
Available
Room ( ` )
Independent
489
* Minor Operated departments include laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth
** Net Income is before depreciation, interest payments and taxes
REVENUE
Rooms
Food & Beverage
Banquets & Conferences
Telephone & Other
Minor Operated*
Rental & Other Income
Total
DEPARTMENTAL EXPENSES
Rooms
Food & Beverage
Telephone & Other
Minor Operated*
Rental & Other Income
Total
DEPARTMENTAL INCOME
OPERATING EXPENSES
Administrative & General
Management Fee
Marketing
Franchise Fees
Property Operations & Maintenance
Energy
Total
HOUSE PROFIT
FIXED EXPENSES
Property Taxes
Insurance
Other Fixed Charges
Rent
Total
NET INCOME**
COMPOSITION
Average Total Rooms Per Hotel:
Average Occupied Rooms Per Hotel:
Average Occupancy Per Hotel:
Average Rate Per Hotel ( ` ):
Number of Responses
56
22
84
65
227
1,820
641
87
199
17
439
688
2,072
2,047
700
1,690
23
155
28
2,596
4,119
3,442
2,129
652
18
193
282
6,716
Amount per
Occupied
Room ( ` )
TABLE 2-2: Indian Hotel Industry – Chain Affiliated vs. Independent: Financial Report (2012-13)
0.8
0.3
1.4
1.3
3.9
30%
9.5
2.0
3.0
0.5
5.9
9.8
30.7
33.8
19.3
55.2
91.7
66.0
9.4
35.4
64.6
52.2%
29.0
12.2
0.4
2.9
3.3
100.0
Percentage
of Revenue
15,571
6,231
26,773
23,777
72,353
559,009
177,611
37,389
56,470
8,920
109,845
182,067
572,302
631,362
188,227
424,357
6,140
36,208
5,735
660,667
1,203,660
973,670
541,494
226,793
6,693
54,881
60,800
1,864,330
74
15,990
60.4%
4,507
Amount per
Available
Room ( ` )
72
29
124
110
335
2,587
822
173
261
41
508
843
2,649
2,922
871
1,964
28
168
27
3,058
5,571
4,507
2,506
1,050
31
254
281
8,629
Amount per
Occupied
Room ( ` )
2012-2013 All India Average
629
35. Page 29
246
54,733
62.3%
6,788
More Than
150 Rooms
60
52.6%
30.0
11.0
0.2
2.4
3.8
100.0
18.4
58.7
124.2
66.6
9.5
36.0
64.0
11.1
2.3
2.8
0.5
6.6
11.1
34.3
29.8
0.7
0.3
1.1
0.9
3.0
26.8%
27.2
64.4
234.7
88.6
25.9
45.7
54.3
8.8
2.5
2.4
0.3
6.2
11.1
31.3
23.0
0.8
0.4
1.7
1.9
4.7
18.3%
1.0
0.4
1.7
1.4
4.5
34.9%
8.4
2.0
3.4
0.5
5.2
8.4
28.0
39.3
18.5
50.0
65.1
63.3
5.8
32.7
67.3
52.5%
26.0
14.4
0.5
3.7
2.9
100.0
Percentage of Revenue
84
18,319
61.5%
3,844
49.6%
39.2
6.4
0.2
1.8
2.8
100.0
32
6,499
59.4%
2,355
50 to 150
Rooms
260
0.8
0.3
1.4
1.3
3.9
30%
9.5
2.0
3.0
0.5
5.9
9.8
30.7
33.8
19.3
55.2
91.7
66.0
9.4
35.4
64.6
52.2%
29.0
12.2
0.4
2.9
3.3
100.0
74
15,990
60.4%
4,507
2012-13
All India
Average
629
7,570
3,532
16,163
18,285
45,551
182,119
86,276
21,829
23,262
3,262
60,998
108,789
304,416
227,670
132,163
287,739
5,048
15,364
7,164
447,477
532,086
485,381
383,947
63,039
2,151
17,332
27,714
979,563
32
6,499
59.4%
2,355
Less Than 50
Rooms
309
* Minor Operated departments include laundry, gift shop, business centre, news stand, sports, health club, garage, parking and so forth
** Net Income is before depreciation, interest payments and taxes
REVENUE
Rooms
Food & Beverage
Banquets & Conferences
Telephone & Other
Minor Operated*
Rental & Other Income
Total
DEPARTMENTAL EXPENSES
Rooms
Food & Beverage
Telephone & Other
Minor Operated*
Rental & Other Income
Total
DEPARTMENTAL INCOME
OPERATING EXPENSES
Administrative & General
Management Fee
Marketing
Franchise Fees
Property Operations & Maintenance
Energy
Total
HOUSE PROFIT
FIXED EXPENSES
Property Taxes
Insurance
Other Fixed Charges
Rent
Total
NET INCOME**
Average Total Rooms Per Hotel:
Average Occupied Rooms Per Hotel:
Average Occupancy Per Hotel:
Average Rate Per Hotel ( ` ):
Number of Responses
Less Than 50
Rooms
309
246
54,733
62.3%
6,788
More Than
150 Rooms
60
10,761
4,745
17,071
14,620
47,198
428,565
175,977
32,856
44,528
7,223
105,257
175,547
541,387
475,762
153,405
382,085
4,545
25,414
5,717
571,166
1,017,150
835,575
476,574
174,278
3,660
38,185
60,042
1,588,310
28,181
10,293
48,503
41,280
128,256
1,006,620
242,913
54,824
96,942
15,300
150,157
242,888
803,024
1,134,870
279,112
582,148
9,299
66,528
4,927
942,013
1,937,900
1,512,390
748,068
415,591
14,276
105,121
84,463
2,879,910
Amount per Available Room ( ` )
84
18,319
61.5%
3,844
50 to 150
Rooms
260
TABLE 2-3: Indian Hotel Industry – Inventory: Financial Report (2012-13)
15,571
6,231
26,773
23,777
72,353
559,009
177,611
37,389
56,470
8,920
109,845
182,067
572,302
631,362
188,227
424,357
6,140
36,208
5,735
660,667
1,203,660
973,670
541,494
226,793
6,693
54,881
60,800
1,864,330
74
15,990
60.4%
4,507
2012-13 All
India
Average
629
37
17
78
89
221
884
419
106
113
16
296
528
1,477
1,105
641
1,396
24
75
35
2,171
2,582
2,355
1,863
306
10
84
134
4,753
32
6,499
59.4%
2,355
Less Than 50
Rooms
309
246
54,733
62.3%
6,788
More Than
150 Rooms
60
50
22
79
67
217
1,971
810
151
205
33
484
808
2,490
2,189
706
1,758
21
117
26
2,627
4,679
3,844
2,192
802
17
176
276
7,307
126
46
218
185
576
4,518
1,090
246
435
69
674
1,090
3,604
5,093
1,253
2,613
42
299
22
4,228
8,697
6,788
3,357
1,865
64
472
379
12,925
Amount per Occupied Room ( ` )
84
18,319
61.5%
3,844
50 to 150
Rooms
260
72
29
124
110
335
2,587
822
173
261
41
508
843
2,649
2,922
871
1,964
28
168
27
3,058
5,571
4,507
2,506
1,050
31
254
281
8,629
74
15,990
60.4%
4,507
2012-13
All India
Average
629
