Gurgaon initially gained prominence as an outsourcing centre for major international companies that found it cheaper to locate their back-end operations in India due to the availability of high-quality but cost-effective employee resources. GE Capital initiated this trend and was the first multinational company to enter Gurgaon in 1997.
Over the last 15 years or so, Gurgaon has established its presence as an important commercial centre of India. However, the nature of companies in Gurgaon has somewhat evolved from being business process outsourcing (BPO) focused industries to including major multinational companies across a variety of industry sectors at present.
Some prominent sectors having presence in Gurgaon include the following:
- Telecommunications: Gurgaon is home to major telecommunication companies like Bharti Airtel, Nokia, Motorola, Alcatel Lucent and Ericsson.
- Information Technology (IT): IT majors such as Siemens,Microsoft, International Business Machines (IBM), Sapient, Hewlett-Packard (HP), Hewitt, Hindustan Computers Limited (HCL), Canon, SAP Labs, Dell, Convergys and Tata Consultancy Services (TCS) are part of the multinational business environment in Gurgaon.
- Manufacturing: Traditionally, manufacturing had been the base of the Gurgaon economy. The city has grown as an established manufacturing hub, with automotive and garment Manufacturers being the major contributors to this sector. Maruti Suzuki and Hero Honda are the existing prominent auto manufacturing players in Gurgaon.
- Real Estate: World-class real estate is supported by private real estate giants like DLF Limited, Unitech, Emaar Properties, Parsvnath, Omaxe, Ansal, Ambience, Shipra, Vatika and Vipul. Development has taken place in the form of office spaces, residential complexes, shopping malls and hotels, with the development format typically comprised of high-rise buildings with superior quality construction.
- Retail: Gurgaon has become an epicentre to the growth of organised retail in the Delhi/NCR area. Multiple shopping malls have sprawled along MG Road, offering high-end shopping and food and beverage (F&B) experience.
Overall, Gurgaon benefits from a deep and diverse mix of domestic and international companies spread across various industry sectors. These companies are also significant contributors of lodging demand to local hotels. Such a diverse corporate demand base bodes well for the future growth of the local lodging market, ensuring that the market is not overly dependent on any specific industry sectors and resilient to global demand shocks.
As a consequence of being an established commercial area with a significant presence of domestic and international companies, the nature of lodging demand in Gurgaon tends to be skewed towards commercial demand sources. As such, commercial demand sources contribute nearly 70–75% to Gurgaon’s overall lodging demand, while the remaining is a mix of leisure (5–10%) and MICE (15–20%) sources.
According to our research, Gurgaon houses approximately 3,000 rooms in the branded luxury, upper upscale, upscale, midscale and economy categories. These rooms are spread across 27 hotels and serviced apartments.
Approximately 29% of the supply is represented by luxury and upper upscale hotels. The tax holiday announced for midscale hotels in context of the Commonwealth Games 2010 further boosted the development activity in this segment across Delhi and NCR recently.
This also led to more midscale hotel rooms being added to the inventory over the past few years, which resulted to the midscale category accounting for majority of the total room supply in Gurgaon (38%) followed by the economy segment at 10%. The serviced apartments concept is relatively new and is offered currently by only two properties namely The Leela Kempinski and Radisson Suites, contributing only 4% to the overall lodging room supply.
The author, Sudeep Jain is the Executive VP, Jones Lang LaSalle Hotels (India)
