Hospitality boom in favor of Real estate growth
While Leela venture is investing around 1265 crore, Indian Hotel is expected to invest around Rs.1265 crore. EIH, kamat and Royal orchid are expected to invest around Rs1150 crore, Rs 365 crore and Rs. 500 crore respectively. A total of 60 new properties across categories are likely to come up in India, sources said and further it is big reason behind the increasing growth rate of real estate India.
The country is witnessing a spurt in hotel expansion in the face of severe shortage of quality hotel rooms because of increased business activity and a spurt in leisure travel by the country’s middle class as well as international tourists, says Chender Baljee, CMD Royal Orchid. The demand-supply mismatch is likely to last for another two years with most of the fresh supply coming n 2009.
A buoyant economy, growth in aviation and real estate India, improved infrastructure and the easing of restrictions on foreign investment is expected to fuel demand across star categories in a majority of markets throughout India, “Hotel on an expansion phase will be in a better position to absorb the decline in occupancies and rates over the long term, as any additional supply can offset the pressure on room rates”, said Nitesh Shetty, M.D, Nitesh Estates. Analysts also indicate that room additions on the back of strong tourist inflows would ensure better margins and profitability.
Foreign tourist’s arrivals have grown by 10-15% in the last one year. Over the last few months, real estate India rate, tier-II cities like Jaipur, Gurgaon, Hyderabad, Pune and Bangalore are seeing growth both in occupancy and room rates and that entire city are also showing massive growth in real estate India. While occupancy is 75-80% room rates are up by 15-20% in these markets, sources said.
Source- E T