India's Star Hotels to Add More Than 60,000 Rooms by 2003

August 2, 2000

Bangalore, India - Indian star hotels including several global chain hotels are planning to add 42,000 rooms to meet the shortage of rooms. The hospitality industry estimates the required capacity at 125,000 rooms can only cater fifty percent of the demand. Currently 66,522 rooms are available with a shortage of 42,588 rooms. Leaving a deficit of over 15,000 rooms. The existing capacities cannot cater to the growing demand of tourists.

Even though their subsistence is highly dependent on the location in metropolitan areas, the five-star hotels are more profitable but are also establishing new capacities in non-metro areas in 3- and 4-star categories. The World Travel Tourism body and World Economic Forum estimates that the industry generates 10 percent of global GDP and is also true in the Indian context. Several leisure hotel and theme resorts are attracting many Indian-owned chain hotels as well international chains like Radisson Hyatt Regency. In the next five years over 500 million dollars will be invested in the hospitality industry.

Radisson Hotels Asia Pte Limited, part of the Carlson Group, has charted a major expansion plan, which includes opening several hotels in various categories spread throughout the country. Currently the group has 950 rooms and is adding over 1,700 fully commissioned or soft commissioned. The expansion will be complete by year 2003.

Taking a cue from the growth potential of the hospitality industry, Köln Messe, a major trade fair organizer, has decided to bring its trade fairs to India. These fairs will substantially increase the demand from the hotels to purchase home furnishings and equipment. The globalization of Indian economy has prompted Köln Messe to take a new perspective of India and the fairs will bring sophistication while providing for global players the opportunity to participate in the hospitality industry business, according to Damodaran K. Director, Indo German chamber of commerce. ''Our Exhibitions would help the Indian hospitality segment to network with buyers not only in India but from other countries fueling further expansion of trade in the hospitality industry.''

This coincides with the Indian Governments' policy of gradually opening markets and lowering of duties on furnishing fabrics. ''The Köln Messe show (date yet to be announced) will also provide an opportunity to make inroads to the Indian markets,'' Damodaran said.

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