By: Manu Sharma
Track2Realty Exclusive
Amidst cut-throat the hospitality vertical of Indian real estate has done well with hotels across the budget segment witnessing upward movement. Track2Realty exp0lores the emerging trends and also addresses the game changers that has influenced in the past and promises to do so in the year ahead.
The real estate sector has largely been bullish over the hospitality business and throughout the sluggish market of 2011, when other verticals of realty business indicated slowdown; there has been constant movement in the hotel business with new launches, JVs and transactions happening. It is convenient to assume this movement as a result of demand-supply mismatch. But then if that be the case, most of the transaction and experiment would have happened in the residential realty.
The game changers that have facilitated the metamorphosis of the sector in the last few years indicate it will continue to do so in the year ahead. Indian demographics are the right fit for global business audience. Continued growth of projected GDP, at more than 7% in the year ahead and resilient economy, only marginally affected by the global financial crisis, only adds to the exponential service sector growth.
About a decade ago, there were only a handful of major hotel markets in India, namely the four metros and possibly a Bangalore or a Goa. While visitors to these major cities had a choice of several luxury and upscale hotels, affiliated with both domestic and international brands, the availability and quality of hotels remained insignificantly in other cities.
However, in the last few years, as the major cities developed rapidly, real estate prices soared, and the cost of setting up and sustaining business operations in these cities became prohibitive. The India Inc, therefore, started looking at other cities in the country where costs were lower.
This resulted in the emergence of alternative business cities such as Hyderabad, Pune, Jaipur and Ahmedabad. As a result of these dynamics, there are currently about 10 to 12 main hotel markets in the country, all of which offer a variety of branded product offerings across different positioning.
…..to be continued
