HVS Research just released its annual study on rooms supply in India, showing that the hospitality industry managed to avoid oversupply in the market.
NEW DELHI – According to HVS Research, over the past decade, the branded supply of room nights in India has risen by 142% while room night demand has increased by 150%. On annual average, growth in branded room nights supply stood at 10% while demand grew on annual average by 11%.
The strong positive correlation between the growth in supply and demand is indicative of the presence of a significant amount of un-accommodated demand that was absorbed as new lodging options became available. It highlights the strength of the hospitality industry in India, which did not go over the top by putting on the market an uncontrolled number of properties.
While the major cities of the country witnessed a 15% increase in supply in 2011/12, demand showed a strong increase of 12% during the same period, one of the strongest demand increases across any market in the world. Nationwide, occupancy declined in 2011/12, a trend due to supply temporarily increasing faster than demand, and not due to an absolute decline in demand. Nationwide average rates hospitality space going forward. Hotels witnessed a decline of 3.9% over the previous year on account of supply pressure. Overall, Nationwide RevPAR declined by 6.3%.
They were in 2011/12 over 84,000 rooms (up by 18%) available across the country while the average occupancy was down to 59.1% compared to 60.6% for the financial year 2010/11.
Cities offering the largest rooms supply are Mumbai (12,052), Delhi (10,697), Bangalore (7,713), Pune (5,672), Chennai (4,904) and Hyderabad (4,797). The highest growth rates in terms of rooms supply were recorded in Bangalore (up by 30%) followed by Chennai and Pune (up by 21% for both cities). HVS Research estimates that rooms supply for India is due to increase to 93,355 until year 2016/17.
Luc Citrinot a French national is a freelance journalist and consultant in tourism and air transport with over 20 years experience. Based in Paris and Bangkok, he works for various travel and air transport trade publications in Europe and Asia.
