Hotels go full as corporate, leisure travel boom (The Times of India)

It's party time for the hospitality industry in India. With corporate travel booming all over again and the Indian middle class also splurging on regular getaways, the hotel industry has finally thrown heavy discounts on room rates out of the window.

Hotel occupancies across the country, insiders say, have been hovering at around 85 per cent through the year and average room rates have already seen a 15 per cent-20 per cent surge. And the future only looks brighter, thanks to a host of conferences and trade shows concurrently being hosted in India.

"The hotel industry is surely witnessing a boom," says Manfred Keiler, general manager of The Grand, New Delhi, adding that political stability, economic surge and emergence of India as a tourist destination are playing catalysts to this growth.

While corporate clients still account for the lion's share of occupants for hotels in India, industry insiders feel that the coming months will see the share of leisure travellers picking up.

While average room rates through most part of the year have already peaked to a recent high and settled close to the $150-a-night mark, peak season rates in some metros even top $200 for some 5-Star properties.

"Though the rates are still low as compared to the once peak levels of $300 a night, they're still better than post-9/11. Most hotels are now averaging at a room rent of $120-150 per night. And this is helping them meet operating costs as well as reap profits," says a Federation of Hotel and Restaurant Association of India official.

No wonder then that a host of international biggies in the business are making a beeline for India. Shangri-La Hotels, for one, is planning to start its revamped Delhi property this summer, besides planning a major expansion in Bangalore.

Hyatt is also reported to be growing its presence in the market, which has seen demand growing at a pace of 20 per cent annually. Not to be left behind, French hospitality major Accor has chalked out an ambitious re-entry plan for the Indian market.

This spurt in booking is true not only for premium properties -- budget hotels and mid-sized properties are also witnessing a buoyancy in occupancies.

"With young Indians planning regular but small getaways every two-three months, mid-market hotels are witnessing a steady stream of customers," says Sunil Mathur, COO of Choice Hotels in India.

The growth may have lifted spirits for now, but the industry has its fingers crossed, hoping that the revival won't be short-lived.

"The absence of government will to change the land use norms for hotels is threatening to derail the industry. This growth can be sustained with government support," adds Mathur.

Source: By Byas Anand, The Times of IndiaKnight Ridder/Tribune Business News