Strong Growth for India's Hotel Industry

According to date compiled by STR Global, India's hotel industry showed overall year-to-date (YTD) November 2011 growth in performance data and supply pipeline.

YTD hotel performance results showed that all major regions, with the exception of Kerala and Maharashtra, reported continuous RevPAR growth.

Looking at the hotel pipeline, India's hotel inventory is expected to increase by more than 61,000 rooms in the next three years with over 30,000 rooms currently under construction based on STR Global's pipeline database.

Regional India

The central region of Madhya Pradesh reported the largest RevPAR growth (+19%), led by a 12.7% increase in occupancy YTD. The neighbouring regions of Uttar Pradesh and Rajasthan saw RevPAR increase by 10.8% and 3.3%, respectively, driven by increased average daily rate in Uttar Pradesh of 2.8% to INR5,527.43, whilst occupancy rates in Rajasthan increased by 6.8% to 40.8% during the same period.

In Kerala and Maharashtra, occupancy and ADR growth declined moderately YTD when compared to the same period last year. Demand in Kerala, following strong growth between 2009 and 2010 (16.3%), remained flat at 0.7% between 2010 and 2011. In Maharashtra, demand growth jumped by 10.6% YTD compared to a negative trend between 2009 and 2010.

Main Indian Cities

RevPAR grew across most Indian cities, with the exception of Chennai (-1.1%) and Delhi (-10.6%). Chennai's demand and supply increased almost in equal measures (6.0% and 5.4%, respectively) making it more difficult to hold average room rates. Delhi reported the highest supply growth (+13.0%) of the cities for the period. Likewise, Jaipur and Bangalore experienced stronger new supply growth compared to demand and saw their occupancy decrease YTD.

Leading the best performing markets in terms of RevPAR growth, Goa reported an 8.0% RevPAR increase, led by year-on-year demand growth of 4.1%. Second was Mumbai with the highest ADR of all Indian cities sampled at INR8,450.84. This financial capital also saw demand growth reaching 9.1%.

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