Hotel Industry stargazes of summery times

The immediate outlook is nothing like as rosy. Revenues are plummeting; hotel occupancy is spiraling downwards. Desperate hoteliers are slashing room rates, ignoring the lesson of the last bout of heavy discounting, which came in the aftermath of the September 11 terrorist attacks. It took years for hoteliers to restore their pre-2001 prices.

Worse, the hotel industry is confronted by a climate of public distaste at business executive’s conspicuous consumption, such as their travel budgets. The big groups merrily sold their hotels in return for long-term franchise and management deals, which gave them multi-year annual fees and a cut of revenues. They became brand managers, rolling out new lifestyle concept hotels. All they needed for growth was a pipeline of new developments.

Now, hotel owners are feeling the pressure, particularly the highly leveraged ones, and are looking to the big operators to “share the pain”. Some hotel advisers predict a bloody year, as hotel owners miss interest payments, while operators lose money on unwanted rooms.

However difficult it may prove this year to find customers, and however low prices may fall in the short term, particularly in emerging markets such as India and China.

Hotel Industry can get Infrastructure Status

The Ministry of Tourism instructed Indian tourism organizations to unite a alliance under a common umbrella so that their voice could heard as one. Arguing at a panel discussion on Impact of Global Meltdown and Terrorism: India Tourism Fights Back organized by FICCI, Sujit Banerjee, Secretary, Ministry of Tourism, said: “I would like the infinitive agencies in the hospitality domain to inaugurate an pinnacle federation of tourism industry so that the entire industry could work with one intent”.

Banerjee said that the Ministry of Tourism has made a intense pitch to the various arms of the government including the Reserve Bank of India to bestow infrastructure status to the hotel industry. “There is some consent that the hotel sector may be granted that status provided to the corporate entity involved in the hotel industry that sets up a hotel. This status, however, may not be accorded to developers who set up hotels”.

The terrorist strike of November 2008 in Mumbai was the first direct attack on the hospitality domain and we have to confront the challenge and be able to show to the world that we are one in fighting back, Banerjee said, adding that the Ministry of Tourism has made a strong declaration for relief to the tourism sector in income tax, service tax, road tax and easier access to credit.

UNITECH LTD plans to invest 2,500 crore in hotel industry India

UNITECH LTD plans to invest Rs 2,500 crore to develop 35 hotels across India over the next seven years. The managing director, Sanjay Chandra affirmed that the firm would develop 35 hotels in next six to seven years. As a provision, land has been engaged in many cities at prime locations. The 28 hotels of the company would account for around 7,000 rooms, to be constructed by 2010.

The hotels in India would be located in the national capital region (NCR), Kolkata, Chennai, Goa, Mysore, Bangalore, Hyderabad, Chandigarh, Siliguri and Assam. Mr. Chandra acknowledged that about 50 percent hotels would be located in Kolkata and NCR cities. Host of real estate companies have chalked out to invade into the sector including DLF, Parsvnath and Emaar MGF. While DLF entered into a joint venture with Hilton Hotels Corporation, Emaar MGF has announced a tie-up with Accor for its budget class hotels.