Hotel demand to outstrip supply in next 5 years

NEW DELHI : After a faster-than-expected growth rate, the hospitality sector in India is looking at the rapid addition of managed hotels to its portfolio. However, developing hotels can hardly keep up with the growing demand for hotel rooms, hotel consultants said.

While hoteliers have ignored the pandemic and focused on expansion in 2022, research by hotel consulting firm Hotelivate shows there are about 59,000 new rooms proposed across the country over the next five years. . Of these, 72% or about 35,000 rooms are under active development, the consulting firm said.

In 2020, only about 35,000 rooms will be developed. The number of active developments is now up at least 10% from 2020. The consulting firm says it has taken into account projects that may qualify as “chain-scale” hotels.

In the upcoming hotel supply, about 6,800 rooms will spring up in Bengaluru, followed by Mumbai (5,400 rooms), Jaipur (3,300) and Delhi (1,800).

“Demand for hotel rooms will outstrip supply within the next five years. There is a shortage of hotel rooms in India. We currently have about 150,000 branded hotel rooms. And with an upcoming projected supply of 35,000 rooms (under active development), only about 7,000 rooms will be added each year, which is only a 4.5% increase in supply. Achin Khanna, managing partner and strategic advisor to Hotelivate, says demand will definitely outstrip this level.

Khanna added: “While this is good for the hotel sector, both existing owners and new developers, consumers may have to shell out more than they want for their hotel rooms. . about three years ago but demand is outpacing it.

Real estate professional services firm JLL’s Jaideep Dang, chief executive officer of the hotel and restaurant group, said that according to company statistics, around 25,000 rooms are expected to appear in the top 11 cities. in India in the next 5 years.

According to the company’s research, the three major cities that will have no difficulty absorbing more supply over the next five years are Mumbai, Bengaluru and Hyderabad.

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