Hospatility Almanac Report

HOSPITALITY
ALMANAC
SOUTH ASIA MARKET OVERVIEW
MAY 2014
TABLE OF CONTENTS
INTRODUCTION 5
TIER 1 CITIES 19
Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata,
Mumbai, The National Capital Region (NCR), Pune
TIER 2 CITIES 41
Chandigarh, Coimbatore, Kochi, Lucknow, Nagpur,
Thiruvananthapuram,Vadodara,
LEISURE CITIES 56
Agra, Goa, Jaipur, Varanasi
KEY SOUTH ASIAN CITIES 65

Colombo, Sri Lanka; Dhaka, Bangladesh; Kathmandu, Nepal;
Mal, Maldives; Thimphu, Bhutan
HOTEL CONSTRUCTION COST ANALYSIS 76
TRENDSPOTTING: BRANDED RESIDENCES 79
IN CONCLUSION 83
Chandigarh
NCR
Kathmandu Thimphu
Agra
Jaipur
Lucknow
Varanasi
Ahmedabad
Dhaka
Vadodara
Kolkata
Nagpur
Mumbai
Pune
Hyderabad
Goa
Bengaluru Chennai
Coimbatore
Kochi
Thiruvananthapuram
Colombo
Male'
Tier 1 Cities Tier 2 Cities Leisure Cities Other South Asian Cities
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
India is currently on the threshold of growth revival. After

INTRODUCTION a long period of tepid macroeconomic headwinds, recent
2013 was a year of many challenges for the Indian economy; statistics show signs of green shoots. Naturally, projections

about 2014 performance are improving. On the back of export
scandals and cautious investor sentiment. Not surprising that competitiveness and stronger global cues, the International
the countrys GDP grew at 4.6% during the April to December Monetary Fund (IMF) said that Indias growth is expected to
period despite earlier projections of around 5.5% for the full year.

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While manufacturing, mining and quarrying sectors continued to been a major challenge, seems to have come under control and
show negative growth, trade, hotel transport and communication following a downward trajectory. Hence, the Reserve Bank of
industries witnessed a decline of 1.1% year-on-year (yoy) to 4.1% India (RBI) has momentarily paused increasing the interest rate.
during April-December of 2013. What has put all stakeholders in a state of wait and watch is the
ongoing general elections. The new government at the centre
Below is a quick snapshot of some key economic developments is expected to give direction to the countrys policy paralysis.
that assisted in maintaining a positive environment: Clearly, India is in a period of transition.
Type Time Period Investment TOURISM OVERVIEW

FDI April-December, 2013 USD 16,560 mn
The World Travel & Tourism Council (WTTC) publishes annual
Net Direct Tax April-December, 2013 INR 4,819 bn reports on the impact of Tourism & Travel (T&T) on the
Collections economies of countries. According to their research, in 2013,
ECB & FCCBs Till October 2013 USD 23.5 bn the direct contribution of Travel & Tourism was Rs 2,178 bn, or
2% of total GDP, and is expected to grow by 7.5% in 2014. The
Foreign Exchange January-December, USD 18.1bn
Earnings 2013 total contribution of the sector was Rs 6,632 bn, or 6.2% of GDP,
which is again forecast to grow at 7.3% in 2014.
World Ranking (out of 184 countries)

Relative importance of Travel & Tourisms total contribution of GDP
13 135 28 8
ABSOLUTE RELATIVE SIZE GROWTH LONG-TERM GROWTH
Size in 2013 Contribution to GDP in 2013 2014 Forecast Forecast 2014-2024
Total Contribution of Travel & Tourism to GDP Breakdown of Travel & Tourisms Total Contribution of GDP
2013 INRbn and Exployment 2013GDP (2013 INRbn)
16,000 1,106
14,000
12,000 3,348
Employment (0000)
10,000
2,178
8,000
22,320
6,000 8,415
Direct
4,704
4,000
2,000 + Indirect
0
+ Induced
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2014
Direct Indirect Induced = Total contribution of Travel & Tourism
Source: WTTC
5
MAY 2014
The World Economic Forum (WEF), in its Travel & Tourism

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opportunities in emerging markets such as India as both source
ranks India 11th, Sri Lanka 14th, Nepal 22nd, and Bangladesh 25th. markets as well as operational bases. The need to familiarise
According to UNWTOs long term forecast Tourism Towards Indian outbound passengers to their brands has assumed more
2030, international tourist arrivals in the emerging - economy relevance, and setting up shop in India, therefore, important by
destinations, including Asia, are likely to grow by 4.4% a year, and doing so, Indian travellers are able to experience the brands in
surpass even advanced - economy destinations by 2015. their home country.
All these indicators demonstrate the importance of tourism,

and the forecasts signal that development of the sector will
THIS EDITION OF THE ALMANAC
positively impact several areas of the economy, and provide gainful In this, the fourth edition of Almanac, we continue tracking the
employment in the process. performance of major markets across India. Additionally, we have

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India received a total of 6.8 mn international visitors in the year

2013, up 4.1% from 6.6 mn in 2012. At these levels, India accounts In a separate segment, we provide you an update on the
for less than 0.5% of international travel indicating the potential construction costs of hotels across various segments. This year,
for growth. Domestic tourists in 2012 (the last available statistic) in our Trends-spotting segment, we give you an insight into
were 1,036 mn, almost 20% more from what 2011 witnessed. development of branded residences by YOO, a residential and
These accounted for the bulk of the tourist economy, albeit much hotel design company. This section, authored by Yvette Costi, the
of it in the unorganised sector. yoos Head of Marketing, presents the companys experience in
this sector, as also their plans for India.
Inbound travel is expected to receive a short-term boost with the
proposed visa-on-arrival policy being extended to 180 countries. The hospitality landscape in the sub continent has undergone
Growing air capacity into the country due to improved airport @
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infrastructure, additional frequencies from existing operators, as economic conditions, hotel openings have also been delayed. That
well as new airlines entering India is also expected ease the cost said, there were positives, in that there was an increase of around
of travel, with much of Indias visitors being long haul travellers. 7,200 keys to inventory of branded supply in the country from
2012 to 2013. From an operational perspective, at least 11 major
What is of special interest to international hotel operators destinations saw increases in Average Daily Rate (ADR) and 10
is the fact that over 15 mn Indian nationals travelled abroad cities experienced growth in Average Occupancy Rate (AOR).

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HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
TIER 1 DESTINATIONS
These destinations (Ahmedabad, Bengaluru, Chennai, Hyderabad, NCR witnessed highest increase in inventory in 2013 by 17%,
Kolkata, Mumbai, NCR-Delhi and Pune) are the epicentres followed by Ahmedabad with 14%, Bengaluru with 10%, Kolkata
of growth in their respective regions. All these cities are and Pune each with 8% and others below 5%. RNA and RNS
characterized by concentration of business opportunities, per day witnessed highest increase in NCR with 17% and 13%
connectivity, accessibility, presence of local markets and respectively.
infrastructural development. From a hospitality perspective, these
destinations were also short-listed for the presence and inventory Ahmedabad
of branded supply.
Together, these destinations have over 77,000 keys in existing

inventory, with over 52,000 keys in the pipeline (opening between

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and expected additions to supply of accommodation in the

Tier 1destinations. It is noteworthy that over 6,500 keys were
added across these destinations in 2013 alone.
Each of these markets will see addition of over 40% of existing

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years. This is perhaps as much a result of the slow-down in the

economy over the last few years, as launching these projects near
the height of the operating cycle. Bengaluru
Current Supply & Pipeline

10,822
Chennai
Supply to increase by 68% till 2018 over 2013 in

Tier 1 cities; Supply in Kolkata to double.
SUPPLY-DEMAND DYNAMICS
NCR, Mumbai and Bengaluru are the top three cities in terms of
room night availability (RNA) per day. While Mumbai sold the
highest room nights (RNS) per day at 11,331 in 2013, the city
with minimum RNA per day was Kolkata and sold out about
2,221 RNS per day.
7
MAY 2014
Hyderabad Pune
AVERAGE OCCUPANCY ACHIEVED

Kolkata
During 2013, most destinations showed a decrease in AOR levels
over 2012 with the exception of Bengaluru and Hyderabad. The
overall decline could be attributed to addition of substantial
inventory, an average decline of 3% in air passengers to these
cities, slower commercial and investment activity and watchful
travellers.
Average Occupancy Rate
Ahmedabad -1%
Bengaluru 3%
Chennai -5%
Hyderabad 0%
Mumbai Kolkata -1%
Mumbai 0%
NCR -4%
Pune 1%
40% 45% 50% 55% 60% 65% 70%

AOR in %
2013 2012 2011 CAGR of AORs over 3 years
Source: Cushman & Wakefield Hospitality
NCR
8
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
AVERAGE RATES ACHIEVED Of the cities achieving growth in average rate,

The overall view on rates achieved in the Tier I is positive. Of #"^

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the eight markets, three (Ahmedabad, Hyderabad, Mumbai) show 40% increase in supply.
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while three (Bengaluru, Chennai, Kolkata) have experienced

declines. It is interesting to note that three markets (Ahmedabad,
Chennai and Hyderabad) have shown year-on-year increase
in average rates. Chennai merits special mention given the
substantial supply increase in this period.
Average Daily Rate
Ahmedabad 3%
Bengaluru -3%
Chennai 1%
Hyderabad 3%
Kolkata 0%
Mumbai 0%
NCR -2%
Pune -1%
- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

ADR in INR
2013 2012 2011 CAGR of ADRs over 3 years
9
MAY 2014
TIER 2 DESTINATIONS Chandigarh

These destinations (Chandigarh, Coimbatore, Kochi, Lucknow, 3,000
Nagpur, Thiruvananthapuram and Vadodara) represent the new,
emerging India, and have again been selected based on their 2,000 2,599 2,670
importance to the economy. As corporate interest increases 2,281
in these destinations, there is substantial development of
infrastructure, real estate, and other support services such as the 1,000
1,455 1,532
hospitality sector. These destinations seem to follow the current 1,210
pattern in hospitality development, in that branded inventory -

in these cities have started at the lower end of the spectrum 2011 2012 2013
RNS per day RNA per day
(budget, economy and midscale).
The surge in demand for branded projects in these cities has led

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Coimbatore
have over 13,600 keys in the existing inventory and have over 1,400
5,600 keys in the pipeline, as in the accompanying chart. While

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1,298 1,302
1,000
only around 390 keys were added in these destinations in 2013. 1,122
This perhaps indicates the approach with caution nature of
600
development in these destinations.
678 767 740
200
-
2011 2012 2013
Traditional Indian leisure destinations continue to RNS per day RNA per day
evolve, attracting other market segments. Source: Cushman & Wakefield Hospitality
Kochi
Current Supply & Pipeline 3,500
Chandigarh 41% 3,179 3,179

2,500
Coimbatore 26%
2,409
Kochi 47%
Lucknow 43%
1,500
Nagpur 38% 2,053 2,138
1,604
,
Thiruvananthapuram 25% 500
Vadodara 68% -
0 1000 2000 3000 4000 5000 2011 2012 2013
Number of Rooms
Current Supply Pipeline Pipeline as a percentage of current supply
Lucknow
1,800
1,400 1,701 1,701
Of the Tier 2 cities, Kochi, Chandigarh and Thiruvananthapuram 1,657
have the largest supply. Kochi sold the highest room nights (RNS) 1,000
per day at 2,138 in 2013. In contrast, the city with minimum
RNA per day was Coimbatore and sold about 740 room nights 600 1,083
980 1,048
per day. RNA and RNS per day witnessed maximum increase in
200
Thiruvananthapuram with 6% and 8% respectively. -
2011 2012 2013
10
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
Nagpur AVERAGE OCCUPANCY ACHIEVED

2,000
During 2013, four out of seven destinations achieved higher
1,600

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1,809 1,809
level. However, despite witnessing a drop in 2013 over 2012,
1,200 1,467 Vadodara achieved the highest AOR amongst the destinations.
800
1,076 1,108 Average Occupancy Rate
400 850
- Chandigarh 2%
2011 2012 2013
Coimbatore 0%
Kochi 6%
Lucknow 4%
Nagpur 10%
Thiruvananthapuram 5%
Thiruvananthapuram Vadodara 1%
2,000 40% 45% 50% 55% 60% 65% 70% 75%
1,600 AOR in %
1,837
1,733 1,733 2013 2012 2011 CAGR of AORs over 3 years
1,200 Source: Cushman & Wakefield Hospitality
800
1,069 1,094 1,185
400 AVERAGE RATES ACHIEVED
- The other key trend seen in our research is that average rates
2011 2012 2013
RNS per day RNA per day also increased in four of the markets. Coincidentally, the three
year period between 2011 and 2013 was also the timeframe when

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and corporate entities see in branded products, thus providing

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market-led growth in rack rates.

1,200 1,368 1,368
1,368
800 Average Daily Rate
897 952 936

400
Chandigarh 2%
Coimbatore 0%
- Kochi 6%
2011 2012 2013 Lucknow 4%
RNS per day RNA per day Nagpur 10%
Source: Cushman & Wakefield Hospitality Thiruvananthapuram 5%
Vadodara 1%
- 1,000 2,000 3,000 4,000 5,000

Tier 2 cities at the cusp of consolidation and
brand dominance.
11
MAY 2014
LEISURE DESTINATIONS: Agra

The third set of destinations (Agra, Goa, Jaipur, and Varanasi) that 3,000
we track, are the traditional leisure destinations both to the
domestic as well as the international traveller. These destinations 2,000 2,575 2,575 2,575
exhibit high seasonality, a higher dependence on leisure tourists,
as also the presence of supply in almost all hotel categories
(budget to luxury). With the development of better access (road 1,000
1,612 1,508 1,352
and air), these destinations have been able to recreate themselves
to attract newer market segments, which has also attracted -
interest from international operators. For instance, Goa has been 2011 2012 2013
able to attract a large domestic market that sees high value in
products such as conferences and weddings, largely offsetting the
lean tourist months.
Jaipur
Put together, the total inventory in the leisure cities is over 5,000
18,210, with another 6,712 keys in the pipeline. Close to 325 keys
were added in these destinations in 2013 alone. 4,000
4,721
4,396
3,000 3,974
2,000
2,413 2,645
Agra 25% 1,000 2,114
Goa 34% -
2011 2012 2013
Jaipur 50% RNS per day RNA per day
Varanasi 34%
- 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Goa
Number of Rooms
12,000
Current Supply Pipeline Pipeline as a percentage of current supply
Source: Cushman & Wakefield Hospitality 10,000
8,000 9,310 9,729 9,729
6,000
4,000
6,236 6,367 6,435
Not surprisingly, Goa and Jaipur are the top two cities in terms of 2,000
RNA per day. Goa achieved highest RNS per day at 6,435 in 2013. -
In contrast, the city with minimum RNA per day was Varanasi 2011 2012 2013
and sold out about 2,140 room nights per day. RNA and RNS
per day witnessed maximum increase in Jaipur with 7% and 10%
respectively.
Varanasi
1,400
1,000 1,185 1,185 1,185
600
750 787 808

200
-
2011 2012 2013
12
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
AVERAGE OCCUPANCY ACHIEVED AVERAGE RATES ACHIEVED
In 2013, Jaipur, Goa and Varanasi showed an increase in the AOR, The cities that have shown downward trend in ADR are Agra,
while Agra showed a decline over 2012. Jaipur and Goa. The Taj Yamuna Expressway has indeed increased
footfalls in Agra but has reduced overnight stays in the city. Jaipur
Average Occupancy Rate and Goa witnessed a decrease in ADR by offering lower rates in
lean season.
Agra -6%
Average Daily Rate
Goa -1%
Jaipur 2%
Agra -2%
Varanasi 3%
Goa 2%
40% 45% 50% 55% 60% 65% 70%
Jaipur 2%
AOR in %
2013 2012 2011 CAGR of AORs over 3 years Varanasi 10%
- 1,000 2,000 3,000 4,000 5,000 6,000 7,000
ADR in INR
13
MAY 2014
KEY SOUTH ASIAN MARKETS: Dhaka

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3,000
Mal and Thimphu), Colombo has the maximum inventory in the 2,793
2,793 2,793
pipeline. Overall, these cities have a total of over 17,400 keys 2,000
operational across various segments of hotels, with over 12,600
keys in the pipeline.
1,000 1,996 2,088 1,883
The pipeline of supply is distinctly different in these cities, with
Colombo topping the list at 171% of current supply, and Dhaka
-

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2011 2012 2013
from a prolonged period of uncertainty, and also are a result of RNS per day RNA per day
increased visitations from abroad.On the other hand, Mal will
see the addition of 45% keys in an already robust market. This is
perhaps a result of the governments policies on tourism, as well Kathmandu
as the emergence of a stable government in the territory.
3,000
The other two cities will see low growth in supply for different
2,837 2,837 2,837
reasons Kathmandu has yet to emerge from a period of political
2,000
turmoil, while Bhutan has controlled additions to supply in order
to better manage carrying capacity into the country, as well as
pricing of the destination. 1,000 1,845 1,786 1,744

-
2011 2012 2013
Colombo 171% RNS per day RNA per day
Dhaka 88%
Kathmandu 12%
Male
Male 45%
8,000
Thimphu 8%
- 2,000 4,000 6,000 8,000 10,000 12,000 6,000 6,736 6,736

6,736
Number of Rooms
Current Supply Pipeline Pipeline as a percentage of current supply 4,000
4,761 4,970 5,119
2,000
SUPPLY-DEMAND DYNAMICS -
Of the 5 cities, Mal clearly is the most developed from a 2011 2012 2013
hospitality perspective with the highest supply as well as demand. Source: Cushman & Wakefield Hospitality
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in raw demand. Supply in each of these destinations in the last

three years has stagnated, in each market for different reasons. Thimphu
500
Colombo
400
4,500
467 467 467
300
3,500 3,808 3,808 3,868
200
2,500
100 184 190 202
1,500 3,213 2,887 2,714
-
2011 2012 2013
500
-
2011 2012 2013
14
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
AVERAGE OCCUPANCY ACHIEVED AVERAGE RATES ACHIEVED
During 2013, hotel occupancy in Kathmandu, Dhaka and Colombo The positioning of Mal as a luxury destination has helped in a
decreased over 2012, while Thimphu and Mal achieved marginal high, and increased average rate compared to the other regional
increases. The skewness of hotels towards high prices in lieu destinations.
of adherence to a minimum room rate rule per category in
Colombo, Kathmandus reduced air arrivals (especially from Colombo, too, achieved a relatively high ADR, perhaps
its biggest source market India), and Dhakas restive political a combination of the low levels of supply as well as the
situation, uncertainty and standoff over elections are few of the governments implementation of the minimum rack rate per
prime reasons for the decline in the AOR. category norm.
Average Occupancy Rate Average Daily Rate
Colombo Colombo -6%

-6%
Dhaka -2%
Dhaka -2%
Kathmandu -2%
Kathmandu -2%
Mal 3%
Mal 3%
Thimphu 3%
Thimphu 3%
0 100 200 300 400 500 600 700
40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% ADR in USD
AOR in % 2013 2012 2011 CAGR of ADRs over 3 years
2013 2012 2011 CAGR of AORs over 3 years
15
MAY 2014
Tier 1 Cities KPI Unit 2011 2012 2013 2014 F

ADR INR 3,830 4,000 4,200 4,284
Ahmedabad AOR % 64% 65% 62% 55%
RevPAR INR 2,451 2,600 2,604 2,142
ADR INR 6,765 6,360 6,262 6,390
Bengaluru AOR % 52% 56% 57% 51%
RevPAR INR 3,518 3,562 3,569 3,259
ADR INR 4,850 4,920 5,048 5,150
Chennai AOR % 68% 60% 59% 54%
RevPAR INR 3,298 2,952 2,978 2,781
ADR INR 4,655 4,775 5,067 5,170
Hyderabad AOR % 54% 53% 54% 50%
RevPAR INR 2,514 2,531 2,736 2,585
ADR INR 5,150 5,220 5,187 5,290
Kolkata AOR % 62% 64% 60% 56%
RevPAR INR 3,193 3,341 3,112 2,962
ADR INR 6,310 6,095 6,235 6,360
Mumbai AOR % 66% 68% 66% 61%
RevPAR INR 4,165 4,145 4,115 3,880
ADR INR 7,905 7,835 7,420 7,568
NCR AOR % 61% 55% 54% 52%
RevPAR INR 4,822 4,309 4,007 3,935
ADR INR 3,653 3,460 3,559 3,630
Pune AOR % 55% 57% 56% 52%
RevPAR INR 2,009 1,972 1,993 1,888
Highest AOR in Mumbai at 66% & Highest ADR in NCR at INR 7,420.
Among Tier 1 micro-markets, Mumbais Santa Cruz and Ahmedabads Airport Road achieved the
highest occupancy at 73% each; NCRs Delhi had the highest rate of INR 8,141; while Mumbais Powai
realised the highest RevPAR at INR 4,889.
16
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
Tier 2 Cities KPI Unit 2011 2012 2013 2014 F

ADR INR 3,332 3,623 3,562 3,634
Chandigarh AOR % 53% 56% 57% 49%
RevPAR INR 1,767 2,029 2,043 1,781
ADR INR 3,516 3,660 3,566 3,637
Coimbatore AOR % 60% 59% 57% 58%
RevPAR INR 2,110 2,159 2,033 2,109
ADR INR 3,447 3,920 4,074 4,155
Kochi AOR % 66% 70% 67% 62%
RevPAR INR 2,275 2,744 2,730 2,576
ADR INR 3,160 3,430 3,527 3,683
Lucknow AOR % 59% 62% 64% 55%
RevPAR INR 1,864 2,127 2,257 2,026
ADR INR 2,146 2,720 2,836 2,893
Nagpur AOR % 58% 59% 61% 62%
RevPAR INR 1,245 1,605 1,730 1,794
ADR INR 3,762 4,140 4,309 4,396
Thiruvanathapuram AOR % 62% 63% 65% 59%
RevPAR INR 2,332 2,608 2,801 2,594
ADR INR 3,525 3,749 3,646 3,718
Vadodara AOR % 66% 70% 68% 63%
RevPAR INR 2,327 2,624 2,479 2,342
Highest AOR in Vadodara at 68% & Highest ADR in Thiruvanathapuram at INR 4,309.
17
MAY 2014
Leisure Cities KPI Unit 2011 2012 2013 2014 F

ADR INR 6,035 5,805 5,634 5,747
Agra AOR % 63% 59% 53% 48%
RevPAR INR 3,802 3,425 2,986 2,759
ADR INR 5,147 5,550 5,389 5,496
Goa AOR % 67% 65% 66% 63%
RevPAR INR 3,448 3,608 3,557 3,462
ADR INR 5,440 5,886 5,745 5,860
Jaipur AOR % 53% 55% 56% 52%
RevPAR INR 2,883 3,237 3,217 3,047
ADR INR 2,365 2,630 3,110 3,170
Varanasi AOR % 63% 66% 68% 62%
RevPAR INR 1,490 1,736 2,115 1,965
Highest AOR in Varanasi at 68% & Highest ADR in Jaipur at INR 5,745.
Other South Asian Cities KPI Unit 2011 2012 2013 2014 F
ADR USD 110 122 126 129
Colombo AOR % 84% 76% 70% 54%
RevPAR USD 92 93 88 70
ADR USD 80 80 82 83
Dhaka AOR % 71% 75% 67% 60%
ADR USD 115 120 117 120
Kathmandu AOR % 65% 63% 61% 63%
ADR USD 560 594 619 631
Mal AOR % 70% 74% 76% 63%
RevPAR USD 392 440 470 398
ADR USD 140 145 140 145
Thimphu AOR % 39% 41% 43% 44%
Highest AOR & Highest ADR in Mal at 76% & USD 619.
18
TIER I CITIES
MAY 2014
AHMEDABAD INVENTORY
Ahmedabad had a total inventory of 4,300 keys in 2013, with
OVERVIEW
the organized segment comprising 84% or 3,600 keys. The
Ahmedabad is one of the fastest emerging cities of India, and total inventory increased by 512 keys, or 14% during 2013. The
as the largest Urban Agglomeration (UA) in the state, together midscale segment had the highest increase of 29% while the
with Gandhinagar, it is the base of corporate and government budget segment clocked 9% increase. The budget segment has
bodies in infrastructure development, IT/ITeS sector, chemical, the largest share of inventory, with 44%, followed by midscale
petrochemical, engineering, and pharmaceuticals industries, etc. with 38%, upscale with 11%, and upper upscale with 7%. The city
currently has no luxury hotels.
The city is well connected by national and state highways,
expressways, railways and an international airport. It is part Two hotels share the largest inventory count - The Pride and the
of the Golden Quadrilateral as well as the Delhi Mumbai Courtyard by Marriott, each with 164 keys. The average number
Industrial Corridor (DMIC) projects. As per Ahmedabad Urban of keys in the city is 93 per hotel.
Development Authority, the city has already witnessed 89%
implementation of its 2002 Development Plan, which also Four new hotels opened for business in 2013, adding a total of
indicates the progress in the city. 512 keys to the existing room supply - Tune (100 keys), Aloft
(176 keys), Easy Eastin Citizen (52 keys) and the Novotel (184
The Sardar Vallabhbhai Patel International Airport received a total keys). The Crowne Plaza with 200 keys was also expected to
of 4.2 mn arrivals in 2012-13, a decrease of 11% from 2011-12. start operations in 2013 but is currently on hold. Ahmedabad is
The domestic arrivals dropped to 3.3 mn in 2012-13, from 3.9 mn $

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/

"
in 2011-12. the addition of all these keys, the segmentation of the market will
undergo some change, with 34% each in budget and midscale, 18%
However, the number of international tourists increased by in upscale, 9% in upper upscale, 4% in luxury.
9.8% to 818,209 in 2013-12, over 744,946 of previous year. The
domestic to international arrivals ratio changed to 80:20 from Inventory Growth
84:16, y-o-y.
2009 1,345 729 3,560
'"@

/
@

" "
2010 1,394 1,120 3,560
rail and road too. Its railway lines connect to all towns within 2011 1,394 1,265 446
the state and major Indian cities. The city also has one of the 2012 1,741 1,265 446 294
operating divisions of the Western Railway. Ahmedabad falls on 2013 1,893 1,625 446 294
the NH 8 that connects Delhi to Mumbai, NH 8C connects it

to Gandhinagar. The city is also connected to Vadodara through 2018 2,084 2,084 1,106 534 250
National Expressway 1, which is part of the Golden Quadrilateral 0 1, 000 2,000 3,000 4,000 5,000 6,000 7,000
Project. Budget Midscale Upscale Upper Upscale Luxury
Air Passengers
Some of the hotel projects in the pipeline and those that are due
5
to begin operations in 2014 include the Eastin Hotel with 156
4 keys, the Crowne Plaza with 200 keys (which is currently on hold)
and Hyatt Regency Hotel with 300 keys.
in Mn
0
2008-09 2009-10 2010-11 2011-12 2012-13
Domestic Foreign
Source: Airports Authority of India (AAI)
20
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
Quick Review: Almanac 2013 Supply-Demand Dynamics

5,000
The market wide AOR increased by 1% y-o-y to 65% in
RNA/RNS Per Day

4,000
2012 and increased by 3% with respect to 2010.
3,000
ADR was INR 4,000 in 2012, having increased 4% over the
previous year and decreased by 4% in comparison to that 2,000
in 2010. 1,000
The total inventory grew by 28% y-o-y in 2012 in the 0

organised segment. 2011 2012 2013
RNA per day RNS per day

HOTEL PERFORMANCE
In 2013, the ADR increased by 5%, y-o-y, to INR 4,200 and the MICRO-MARKET PERFORMANCE
AOR declined to 62%, from 65% in 2012. Both these metrics
may be attributed to the addition of 12% branded inventory '"@
"
/
/
"
*=
*
'
in the city. It must, however, be noted that the raw demand for Road, Ashram Road, CG Road, Satellite/Prahladnagar and SG
accommodation in the city went up from 2,426 RNS to 2,620 Highway.
RNS between 2012 and 2013. The resultant RevPAR was INR
During 2013, Airport Road achieved the highest AOR of 73%,
2,600, changed only marginally over previous year.
while SG Highway achieved the least AOR (59%), Satellite/
As may be expected at a business destination, the corporate Prahladnagar at 67% and Ashram Road and CG Road at 60% each.
segment contributes up to 75% of demand, followed by MICE and
In terms of average rates, Satellite/Prahladnagar hotels achieved
Leisure with 10% each, long-stay with 3% and airlines with 2%.
the highest ADR of INR 5,220, while Ashram Road hotels
achieved the least (INR 3,970). Between these two ends, hotels
Hotel Performance
around Airport Road recorded INR 4,970 and CG Road achieved
5,000 66% INR 4,800, while hotels around the SG highway achieved an ADR
ADR/RevPAR (in INR)
65% of INR 4,450.

4,000
64%
3,000 63% Micro-Market Performance
AOR
2,000 62%
6,000 80%
ADR/RevPAR (in INR)
61% 70%
1,000 5,000
60% 60%
4,000 50%
AOR
0 59%
2011 2012 2013 3,000 40%
2,000 30%
ADR RevPAR AOR
20%
Source: Cushman & Wakefield Hospitality 1,000 10%
0 0%
C.G. S.G Airport Ashram Satellite/
Road Highway Road Road Prahadnagar
During 2013, Ahmedabad had a total of 4,258 RNA per day, with ADR (2013) RevPAR (2013) AOR (2013)
a growth of 13.7% over 2012. Demand for accommodation was at Source: Cushman & Wakefield Hospitality
2,620, which had also grown 8% from 2012. The rate of increase in
supply over demand resulted in a decline of occupancy.
21
MAY 2014
OUTLOOK Fedara, near Ahmedabad, on PPP basis, metro link to Gandhinagar

from Ahmedabad and supportive industrial policy are expected
Ahmedabad is a growing city with the potential to sustain
to drive investment into the city, which will result in additional
higher performance metrics. Infrastructure development has
demand for accommodation services in the city.
been a focus of the State Government. At the Vibrant Gujarat
Summit held in 2013, Japan extended its support for developing
infrastructure in the state as well as the city. The Japan #"
=/

International Cooperation Agency (JICA) signed a MoU with
Indian Railways for a high speed rail project between Mumbai and
ADR - INR 4,284
Ahmedabad. Also, Gujarat Industrial Development Corporation
(GIDC) is developing an industrial park near Ahmedabad for
AOR - 55%
Japan External Trade Organisation (JETRO). All this coupled with
the intended development of proposed international airport in
22
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
BENGALURU
OVERVIEW Air Passengers

Driven by IT/ITeS sector, the economy of Bengaluru is highly 14
dependent on the macro and micro business growth and 12
sentiments. As a result, room night demand in the city is largely 10
in Mn
supported by the corporate segment. 8
6
There are two major IT dominated micro markets present 4

*

#

"/
'
2
Bengaluru has a number of other micro markets witnessing 0
major commercial real estate development such the Outer Ring 2008-09 2009-10 2010-11 2011-12 2012-13
Road, Sarjapur Marathahalli Road and the stretch from Hebbal Domestic Foreign
towards the airport.
Bengaluru hosts some major MICE events such as Aero India INVENTORY
(Biennial event), PIA- Expo Vendor Development Programme and During 2013, Bengaluru witnessed an increase of 7% y-o-y in
the Mining Exploration and Convention Trade show etc. hotel inventory, with the opening of the Bengaluru Marriot Hotel
"/
]
=Z
/
@
|

Q__
During 2013, Lemon Tree Hotels (through its JV with the APG Nagar(148 keys), Formule 1 (155 keys), Hyatt Place (143 keys),
Group) acquired the Clarion Hotel from Asian Hotels West, and the Ritz Carlton (267 keys). The Leela Palace, with 357 keys
making it their third property in the city. We understand that continues to be the largest hotel in Bengaluru (since its opening
the group will invest INR 110 mn towards renovating the hotel, in 2001) while the average inventory per hotel is 108.
purchased at INR 620 mn.
Inventory Growth
2009 965 2,486 1,365 341 1,546
One of the three cities where a hotel transaction 2010 1,084 3,179 1,735 681 1,546
was completed. 2011 1,665 3,490 2,244 781 1,546
2012 1,850 3,705 2,244 781 1,546
2013 2,153 3,848 2,494 781 1,813
The Kempegowda International Airport, which lies 35 km outside

2018 3,808 5,855 5,070 1,331 2,063
the city, is amongst the top 5 airports in the country. During
0 5,000 10,000 15,000 20,000
2012-13, the total number of air passengers at the airport was Inventory
over 11 mn, but at a y-o-y decline of 6%. Budget Midscale Upscale Upper Upscale Luxury
The majority of passengers were domestic at 79%, and declined

8.3% from 2012, while foreign passengers accounted for 21%, Bengaluru has an estimated supply pipeline of 7,038 keys over the
growing at 6.4% from 2012 $
/

!""

$

@

"

segment, 28.5% in the midscale segment, 23.5% in the budget

'

@
"
|

[
"
/
segment, 7.8% in upper upscale, and 3.6% in the luxury segment.
major source markets for foreign arrivals at the airport are USA
(31.6%), UK (13.7%), Germany and Japan (7.9%) and France
Quick Review Almanac 2013:
(7.4%).
The market wide AOR increased by 4% y-o-y to 56% in
Bengaluru is connected via 4 major highways, which are the NH- 2012 and declined by 1% with respect to 2010. In 2011,
209, NH-4, NH-7, and NH-48. The national highways provide for AORs for the city saw a major decline due to addition of
connections to cities such as Hyderabad, Coimbatore, Chennai, room inventory by 1,900 key.
Varanasi, etc.
The ADR was INR 6,360 in 2012, having declined 5% over
Bengaluru is also the headquarters of the South Western the previous year and 4% since 2010.
Railways, and has two termini - City and Yeswantpur, which The total inventory grew by 4% y-o-y in 2012, increasing
provide connectivity to most major Indian cities by 11% in the budget segment and 6% in midscale segment.
23
MAY 2014
HOTEL PERFORMANCE MICRO-MARKET PERFORMANCE

The market wide occupancy for the city during 2013 was 57% | *=

"

"
@
/

increasing marginally by 1% y-o-y, whilst the market wide ADR are aligned to the development of Urban Bengaluru. Hotel
was recorded at INR 6,262 declining by 1.5% y-o-y. RevPAR development has followed suit.
for the city during 2013 was estimated at INR 3,595 showing
negligible growth . During 2013, the suburban micro-markets were found to have
the highest occupancy with 60.1%, whilst the CBD/Off-CBD
Being a major business city, the corporate segment contributes had the highest ADR of INR 6,850. The major reason for CBD/
the highest demand share, at 60%, followed by MICE with 20%, Off-CBD to achieve a higher ADR is due to the presence of a
leisure with 15%, long-stay with 3% and airlines with 2% larger number of luxury hotels such as The Taj West End, The Ritz
Carlton, The Oberoi and ITC Windsor.

!
"

/

"

the NASSCOM Product Conclave (28th -30th October), TED- Micro-Market Performance
Bangalore Change (April 4th at Bangalore International Centre),
8,000 70%
and the biennial Aero India Show 2013 (6th -10th February).
ADR/RevPAR (in INR)
7,000 60%
6,000 50%
Hotel Performance 5,000
AOR
40%
4,000
8,000 58% 30%
3,000
7,000 57% 20%
ADR/RevPAR (in INR)
2,000
6,000 56% 10%
1,000
5,000 55% - 0%
AOR
4,000 54% CBD/Off North Suburban East Electronics Peripheral South

CBD Bengaluru City
3,000 53%
ADR (2013) RevPAR (2013) AOR (2013)
2,000 52%
1,000 51%
0 50%
2011 2012 2013 OUTLOOK
ADR RevPAR AOR
Source: Cushman & Wakefield Hospitality During 2014, the city is expected to seen an increase in inventory
by 23.9% which includes the opening of the Double Tree by Hilton
(172 keys), Encore (90 keys), Formule 1 Hosur Road (131 Keys),
IBIS-City Centre (184 keys).
During 2013, the supply of keys per day was estimated at 10,822,
having grown 6.9% (or 963 keys) over 2012. 2013 also saw an With increased supply, occupancy levels are expected to take
increase of 8.7% in raw demand to 6,215 RNS per day. As can a dip. Commercial demand is currently stagnant for the city as
be seen, the growth in raw demand, compared to the growth in over the past year the y-o-y growth in absorption of commercial
supply resulted in an increase of occupancy in the city by 1%, to spaces had declined by 26.8%. Although, the peripheral markets
57% during 2013. of ORR are a preferred destination for occupiers today, the
peripheral market accounts for over 38 mn sf. of commercial
Supply-Demand Dynamics space and a vacancy rate of 10%. Additionally, the peripheral
market has the largest supply of over 4 mn sf. underway.
12000
RNA/RNO Per Day
10000 Bengaluru is expected to host some major conferences during

8000 2014, 8th International Conference on Communication Networks
(July 25th- 27th 2014), International Conference on Communication
6000
and Computing 2014 (June 12th-14th 2014), PyCon India (27-28th
4000 September 2014), 1st Global Milling Conference (April 23rd-24th).
0
2011 2012 2013 #"
=/

ADR - INR 6,390
AOR - 51%
24
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
CHENNAI Chennai has two main railway terminals; Chennai Central station
and Chennai Egmore, together the stations provide connectivity
OVERVIEW to all major destinations within the country. Chennai also acts as
the headquarters for the Southern Railways.
Chennai has an interesting mix of industries that drive the
economy ranging from the manufacturing (automobiles) to the
service industries (IT/ITeS, Banking and Financial). INVENTORY
An interesting development in Chennai, given the addition Within Chennai, the midscale segment has largest inventory with

/

"

!
$
"

38.6%, followed by the upscale segment with 18.1%, luxury with
proposed redevelopment as residential developments. City-based 17.6%, 14.3% with upper upscale, and budget with 11.4% .The

#@

@ "

["
/
!
average inventory per hotel is currently 115 keys. The largest
the Hotel Atlantic (a 118 unit hotel located in Egmore) from S. hotel operational is the ITC Grand Chola, located in Guindy
Chand Publishers, for a total of INR 1,650 mn, where Ceebros featuring 600 units, which began operations in 2012.
has proposed to build residential apartments. The next was the
purchase of the site earmarked for the development of the J. W. Chennai, together with Delhi and Pune has seen the most
Marriott from Hyderabad based Viceroy Hotels for INR 4,800 mn. additions to supply since 2010. In the case of Chennai, almost all
the additions of 2012 occurred at the top end, (ITC Grand Chola
The city is a well known sea port; it is served by 2 major ports with 600 keys, Leela Palace with 326 keys and the Park Hyatt with
- Chennai Port and Ennore Port. Chennai Port is considered the 188 keys). During 2013, the citys inventory grew a further 3%
2nd largest port in India after Mumbai Port, and the largest port with the opening of the Westin (215 keys).
on the east coast of India.
Chennais airport (Kamaraj Domestic Terminal & Anna

International Terminal) has recently been renovated at a Chennai to emerge as one of the truly
substantial outlay, and features as the third largest airport in the segmented markets in the country.
country. Additionally, AAI plans to add a new terminal to the
existing airport, while the State Government is also considering
establishment of a new airport at Sriperudumbur 40 km from
Chennai. In FY 2012-13, the total number of air passengers Inventory Growth
surpassed 12.7 mn, a decline of 1% over the previous year. Of 2009 803 2,538 1,357
167
209
the total number of arrivals, 65% were domestic and 35% were 2010 859 2,768 1,357
167
209
international. 2011 859 2,903 1,357 698 209
2012 859 2,903 1,357 860 1,323

An analysis of data provided by the Ministry of Tourism, show that 2013 859 2,903 1,357 1,075 1,323
the key source markets, in terms of total arrivals, are Sri Lanka
with 30%, the USA with 13%, Malaysia with 11%, France with 8%, 2018 1,906 4,722 1,642 1,432 1,323
and UK with 6%.
0 2,000 4,000 6,000 8,000 10,000 12,000
Inventory
Air Passengers Budget Midscale Upscale Upper Upscale Luxury
14
12
Presently, Chennai has a pipeline of 3,508 keys over the next 5
10
years. And almost as if to compensate for the last two years, when
in Mn
8
the supply was at the top end. 51.9% of new supply is expected to
6
be in the midscale segment, 29.8% in the budget segment, 10.2%
4
in the upper upscale segment and 8.1% in the upscale segment.
2
0
2008-09 2009-10 2010-11 2011-12 2012-13
Approximately 25% of this total inventory is expected to become
operational in 2014, which includes brands such as Ibis Hotel (160
Domestic Foreign
Source: Airports Authority of India (AAI) keys), Gateway by Taj (159 keys), Formule 1(150 keys) and Holiday
Inn OMR (200 Keys).
Chennai is connected via 4 major highways, which are the NH-
205, NH-45, NH-4, and the NH-5. The highways provide for
connectivity to Bengaluru,Vishakapatnam, Pune, etc.
25
MAY 2014
This mismatch between supply and demand resulted in a decline

Quick Review Almanac 2013: in market-wide occupancy of 1% y-o-y, to 59%.
The AOR for the city during 2012 was 60% featuring a
decline of 8% since 2011. This may be attributed to the Supply-Demand Dynamics
increase in supply by 1,275 keys during the year. 8,000
The ADR for 2012 was recorded as INR 4,925 having
RNA/RNS per day

6,000
increased 1% since 2011, and 2% since 2010.
4,000
The total inventory of Chennai grew by 23% over the
previous year, with the luxury segment featuring a 151%
2,000
increase due to the opening of ITC Grand Chola, Leela
Chennai and Park Hyatt 0
2011 2012 2013
HOTEL PERFORMANCE Source: Cushman & Wakefield Hospitality
The market wide AOR for the city in 2013 was approximately
59% decreasing marginally by 1% y-o-y, whilst the market wide MICRO-MARKET PERFORMANCE
ADR increased by 2.6% to INR 5,048. RevPAR for the city during
#"
"
"
!
/
=

!""
"
`
2013 was estimated at INR 2,965 having grown 1.3% y-o-y.

Mahabalipuram Road (OMR) is emerging as a prominent one.
During 2013, OMR had the highest occupancy at 61.8%. In
Being a major metropolitan city, the corporate segment
terms of ADR, the Airport-Perungudy-Taramani (APT) Cluster
contributes 60% of demand, followed by MICE with 20%, long-stay
performed the best at an estimated ADR of INR 5,960.
with 15%, 3% from leisure and 2% from airlines.
During 2013, Chennai did not host any major international or Micro-Market Performance
national conferences; there were however some medium sized 8,000 63%
ARR/RevPAR (in INR)
conferences such as Travel & Tourism Fair (10th 12th January 62%
2013) and Property Fair (24th 26th January 2014). 6,000 61%
60%
AOR
4,000 59%
Hotel Performance 58%
2,000 57%
6,000 70%
56%
ADR/RevPAR (in INR)
5,000 68%
0 55%
66% City Centre APT Cluster OMR
4,000 64%
AOR
ADR RevPAR AOR

3,000 62%
2,000 60%
58%
1,000 56% OUTLOOK
0 54%
2011 2012 2013 We anticipate that in the short term, there will be little or
ADR RevPAR AOR no growth in commercial demand, given that during 2013,
commercial space witnessed absorption of 2.9 mn sf., a decline of
20.9% y-o-y.
SUPPLY DEMAND DYNAMICS
Demand for MICE in Chennai is expected to see steady growth
During 2013, the city offered 7,517 keys per day having grown 3%
with the addition of the ITC Grand Chola which features the
over 2012, whilst the demand was 4,416 keys per day, which had
largest convention centre in Chennai. The city is, to an extent,
decreased by 2% y-o-y.
and can be developed further as an alternate destination to
26
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
Hyderabad for MICE in the south. Some of the major events

"
'
'
^

expected to be held during 2014 includes Safety India 2014: that Chennai will be their hub of operations will also boost
Conference & Expositions (May 26th-27th 2014), 2nd International demand from this segment.
Conference on Global Business, Economics, Finance and Social
Science (11th-13th July 2014), etc. #"
=/

Other drivers of demand for the city include sporting events such ADR - INR 5,150
as Cricket (IPL, international matches), Tennis (Aircel Chennai
Open), Chess and others. The commissioning of the new airport AOR - 54%
terminals are also expected to drive additional airline segment
27
MAY 2014
HYDERABAD INVENTORY
OVERVIEW The city has seen constant addition to supply in this decade, with
a 26% increase in 2010, 10% in 2011, 6% in 2012 and 5% during
Hyderabad perhaps shares the crown with Bengaluru as the IT/
2013. In 2013, Hyderabad witnessed the opening of Trident
ITeS hub of India - Infosys, Wipro, Cognizant Technologies, TCS
@
!"

=
@
"

/

"
_
"
/

"

the recent political turmoil over the creation of a new State

important education centre with over 200 engineering colleges;
had led to a near standstill of all development activities, including
it is also home to marquee institutes such as ISB (Indian School
that of hotels. While the supply increases over the last four years
of Business), ESCI (Engineering Staff College of India) and ASCI
are steady, there have been many other projects that had been
(Administrative Staff College of India).
delayed or shelved due to the uncertainty.
The decades since 1992 have seen the transformation of
Hyderabad into one of the top metros in the country. Hyderabad
!
"
/

convention centre through the Hyderabad International

A fresh start for Hyderabad.
Convention Centre (HICC) and Hyderabad International Trade
Expositions Limited (HITEX).
Within Hyderabad, the midscale segment has the largest
Hyderabad was another city that witnessed a major hotel inventory of 45.2%, followed by the upper upscale segment with
transaction, the Regenta One; a property owned and managed by 19.2%, upscale with 17.2%, luxury with 16.6%, and budget with
Royal Orchid Hotels was sold for a total value of INR 1,790 mn, 1.9%. The largest hotel operational is The Westin, located in
to the hotel investment group SAMHI. Madhapur, with 428 keys, and the average inventory per hotel is
currently 144.
The privately developed and run airport, Rajiv Gandhi
International Airport about 25 km from city centre, spreads over Inventory Growth
a total area of 790 acres.The city welcomed a total of 8.1 mn air
115
passengers with a decline of 2%, y-o-y, during 2012-13. Of the 2009 2,296 414 714 448
total arrivals, 74% were domestic and 26% were foreign. 2010 2,808 681 714 718
115
2011 2,808 884 714 1,029
115
An analysis of data provided by the Ministry of Tourism shows 2012 2,808 1,065 869 1,029
115
"
"
/
_

=

2013 2,808 1,065 1,192 1,029
USA (53.4%), UK (10.%), Australia (7.9%), the U.A.E (6.9%) and

Canada (5.4%). 2018 1,066 4,665 1,544 1,442 1,549
0 2,000 4,000 6,000 8,000 10,000 12, 000

There are 3 major highways that provide connectivity to Inventory
Hyderabad; they are the NH-9, NH-7, and the NH-202. These Budget Midscale Upscale Upper Upscale Luxury
highways provide connectivity to destinations such as Bengaluru,
Varanasi, Madurai, etc.
Hyderabad has 4 railway stations, of which the largest is the
Secunderabad. The head quarters of South Central Railway (SCR) The ADR for Hyderabad in 2012 was INR 4,775, an
is also based here. increase by 3% over the previous year. Market wide AOR
declined by 1% over 2011, and was 53% for the year 2012.
Air Passengers
Hyderabads inventory grew by almost 14% y-o-y to
8 approximately 6,380 keys in 2012 across all segments. The
city recorded an increase of 62% in inventory from 2008
6 to 2012.
in Mn
0
2008-09 2009-10 2010-11 2011-12 2012-13
Domestic Foreign
28
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW

Interestingly, the political turmoil around the creation of the new It was observed that hotels located in the City Centre performed
State does not seem to have affected demand in the city. Both with a higher AOR of 55.2%, whilst the hotels in Madhapur-
market-wide occupancy and average rates increased - occupancy Gachibowli (MG) Cluster recorded an AOR of 50.4%. The city
was 54% increasing by 1%, y-o-y, whilst the market wide ADR was centre hotels achieved the highest ADR with INR 5,117, whilst
INR 5,067 increasing by 6.1% y-o-y. RevPAR for Hyderabad during the MG Cluster achieved an ADR of INR 4,864.
2013 was 2,720 having grown 7.0% y-o-y.
Micro-Market Performance
This performance was perhaps due to the contribution by MICE
demand, with Hyderabad hosting some major MICE events which 6,000 56%
ADR/RevPAR (in INR)

attracted over 1,000-4,000 delegates. Some of these events 5,000 55%
54%
included Hyderabad Fashion Week (4,000 Delegates), 34th Societe 4,000 53%
AOR
Internationale de Chirugie Orthopediuq et de Traumatlogie 3,000 52%
(SICOT) Orthopedic World Congress (3,000 Delegates) and mn 2,000 51%
Dollar Round Table (4,000 Delegates) etc 50%
1,000 49%
0 48%
The dominant demand segment is the corporate segment City Centre MG Cluster
contributing 70%, followed by MICE with 20%, long-stay with 5%,
ADR RevPAR AOR
leisure with 3% and airlines with 2%. Source: Cushman & Wakefield Hospitality
Hotel Performance OUTLOOK

6,000 70% Hyderabad currently has an estimated pipeline of 4,057 keys over
60%
ADR/RevPAR (in INR)
5,000 "
$
/

!""
X

"

50% 23.4% is in the budget segment, 12.8% in the luxury segment,

4,000
40% 11.8% in the upscale segment and 6.2% in the upper upscale
AOR
3,000
30% segment. Approximately, 50% of the pipeline is expected to open
2,000
20% in 2014, which includes brands like Formule 1 (174 Keys), Holiday
1,000 10% Inn (380 keys) and Holiday Inn Express (200 keys).
0 0%
2011 2012 2013
ADR RevPAR AOR
@
!

/

@

Source: Cushman & Wakefield Hospitality over 1.4 mn sf, a decline of 40.15% y-o-y. Hence commercial
demand for room nights is expected to see a decline in growth
SUPPLY-DEMAND DYNAMICS rates. However the city of Hyderabad is expected to witness
an increase in commercial demand with the political turmoil
During 2013, the city had 6,209 keys on offer per day, having turning to normalcy in the state, 1as the city has been declared a
grown 5% y-o-y, whilst there was a demand for 3,334 keys per joint capital to the new State of Telengana as well as the residual
day (at a growth of 6% y-o-y). The increase in RNS per day ?

@
"

/
outstripped that of RNA per day, resulting in an increase in MICE events planned for the 2014, which include the Global IP
occupancy by 1% y-o-y to 56% during 2013. Convention (16th-18th January, 2014 500+ delegates expected),
22nd Cochrane Colloqium (21st -26th September, 2014 850
Supply-Demand Dynamics delegates expected) and International Union of Crystallography
(21st -28th August, 2017 5000 Delegates), amongst others.
7,000
RNA/RNS per day
6,000
#"
=/

5,000
4,000 ADR - INR 5,170

3,000
AOR - 50%
2,000
1,000
2011 2012 2013
1
The state saw a number of civil disruptions during 2011, 2012 and 2013, all centred
around the creation of a new State separating from Andhra Pradesh. This issue has
now been voted on by the Parliament, and a new State has been announced.
29
MAY 2014
KOLKATA INVENTORY
OVERVIEW Kolkata has a total hotel inventory of approximately 3,705 keys.

Of the total inventory, 34.4% belongs to the Budget segment,
Kolkata, by the virtue of its location and enhanced connectivity,
27.7% to the upscale segment, 19.7% to the midscale segment and
is the gateway to the eastern states of India and a transit hub.
18.2% to the Luxury segment. The average inventory per hotel is
The city has continued to be home to major corporate houses in
69 and the largest hotel in the city, currently the ITC Sonar has a
India, such as ITC, Coal India and Allahabad Bank, etc.
total 238 keys and is currently expected to expand with another
490 keys with the development of ITC Sonar II by 2015. This
Kolkata is considered a major MICE destination in the East, due to
expansion will retain the hotel position as being the largest hotel
its infrastructure and facilities present in the region. Some of the
in the city.
MICE facilities present include Science City and Milan Mela, which
have been host to some major medical conferences during 2013.
Prior to 2013, Kolkata saw the largest increase in inventory during
2011, about 7%, with the addition of the Swissotel (147 Keys)
Kolkata is also home to the oldest operating port in India, known
and the Fortune Select (68 keys). During 2013, the growth in
simply as Kolkata Port. Building during 1870, during 2012-13 the
inventory was 8%, due to the opening of the Park Plaza in Balliganj
port handled 600,426 TEUs (Twenty Foot Equivalent Units).
(92 Keys) and the Taj Gateway (194 Keys).
Kolkatas NSC Bose Airport, at Dum Dum, 15 kms outside the
city is the principal gateway to the east and north east of the
country. AAI has recently upgraded the terminals at the airport at Stable market to see a vast change-doubling
an outlay of INR 2,3240 Million
organised capacity in 5 years.
During 2012-13, the total number of air passengers at the airport
was estimated to be over 10 Million and had experienced a y-o-y
decline of 2%. The pipeline for Kolkata is approximately 3,620 keys in the next
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An analysis of data provided by the Ministry of Tourism shows the upper upscale segment, 23.2% in the luxury segment, 10.7% in
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the upscale segment, and 7.7% in the budget segment.
Bangladesh (47.7%), Thailand (15.4%), USA (9.7%), the UK (8.2%)
and China (7.6%). Inventory Growth
Kolkata is connected by road via 4 major national highways, these 2009 1,227 471 566 676
include the NH-2 (is the famous Grand Trunk Road), NH-6, NH- 2010 1,227 534 566 676
34, and the NH -117. 2011 1,227 534 781 676
2012 1,273 534 933 676
Kolkata is served by 2 railway stations, which are Sealdah and 2013 1,273 731 1,025 676
Howrah railway station. Kolkata is also the head quarters for

Eastern Railway & South Eastern Railways. 2018 1,552 1,821 1,412 1,023 1,516
0 2, 000 4,000 6,000 8, 000

Inventory
Air Passengers Budget Midscale Upscale Upper Upscale Luxury
12
10
8 Quick Review Almanac 2013:
in Mn
6
4
During 2012, the hotels recorded a market-wide AOR of
64%, witnessing an increase of 2% y-o-y. ADR for the city
2
had increased by 1% since 2011 to INR 5,220 in 2012.
0
2008-09 2009-10 2010-11 2011-12 2012-13 The organized hotel segment in Kolkata has over 3,500
Domestic Foreign keys. The inventory grew by almost 5% in during 2012 and
Source: Airports Authority of India (AAI) by 14% since 2008.
30
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW

The market wide AOR for the city during 2013 was approximately It was observed that hotels located in Salt Lake and Rajarhat
60% decreasing by 4% y-o-y, whilst market wide ADR was INR performed better than the city hotels. The hotels in these two
5,187 declining marginally by 0.6%, y-o-y. The decline in the suburbs recorded an AOR of 64.6% while the hotels in and
occupancy rate is attributed to the increase in inventory by 8% around the city centre achieved 62.4% AOR. The ADR for Salt-
during 2013. RevPAR for the city during 2013, was at INR 3,256 =

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having declined 2.1% y-o-y. to INR 4,837 for Kolkata city hotels, a difference of almost 50%.
Being a key business and trading city of the East, the dominant Micro-Market Performance
market segment is the corporate segment with 65%, followed by
ADR/RevPAR (in INR)

7,000 65%
MICE with 20%, leisure with 10%, long stay with 4%, and airlines 6,000 64%
with 1%. 5,000 64%
AOR
63%
4,000
During 2013, Kolkata hosted some major medical conferences 63%
3,000
62%
such as Medicon International 2013 and the 34th National 2,000 62%
Conference of Association of Medical Physicists. 1,000 61%
0 61%
City Centre Salt Lake/Rajarhat
Hotel Performance
6,000 64% ARR (2013) RevPAR (2013) AOR (2013)
ADR/RevPAR (in INR)

5,000 63%
4,000 62%
OUTLOOK
AOR
3,000 61%
\ =
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/

2,000 60%
underway, such as the Light Rail Transport System, Mono Rail
1,000 59%
and the Eco-Park etc. The expansion of the airport is likely to
0 58% augment travel within the region to a far greater extent, allowing
2011 2012 2013
for an increase in the room night demand. The major suburban
ADR RevPAR AOR
Source: Cushman & Wakefield Hospitality development in areas such as New Town and Rajarhat are the
most prominent, which include a number of proposed hotels such
SUPPLY-DEMAND DYNAMICS as Formule 1, Ibis, Novotel and the Westin etc.
During 2013, Kolkata had a total of 3,705 keys available per Kolkata and the north-east are expected to play a major role
day, having grown 8% y-o-y, whilst the total keys sold per day in the future, with Indias look east policy. In addition, the
was 2,221 having grown by 1% y-o-y. The increase in RNA per ASEAN countries are looking to expand trade and commerce
day outstripped that of RNS per day, resulting in a decrease in between India and the region. As a result a number of proposed
occupancy by 5% y-o-y to 60% during 2013. developments such as rail links and road connectivity are
currently under consideration and planning. Kolkata in the
Supply-Demand Dynamics future could be linked via road and rail to Ho Chi Minh City via
Myanmar, Thailand, Cambodia, and Vietnam.
4000
3500
3000
Kolkata will see major new hotels commence operation during
2014 - The Great Eastern Hotel The Lalit (179 Keys, currently
RNS Per Day
2500
2000 open as of January), Westin (323 Keys) and Novotel (350 Keys)
1500 etc.
1000
500
2011 2012 2013
31
MAY 2014
During 2013, Kolkata witnessed a commercial absorption of over 2014), Association of Spinal Surgeons of India (23rd- 26th January
0.8 mn sf, having witnessed a decline of 29.0% y-o-y, probably 2014), Travel & Tourism Fair (4th -6th July 2014).
an indicator of the negligible growth in commercial room night
demand. However, commercial absorption is expected to improve #"
=/

from the third quarter of 2014, resulting in a potential increase
the commercial room night demand in the future. ADR - INR 5,290
During 2014, MICE is expected to continue to be a major demand AOR - 56%
segment with the 5th Asian Mining Conference (13th-16th February,
32
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
MUMBAI Air Passengers
OVERVIEW 30
Mumbai is to India what New York is to the United States -

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in Mn
Washington DC.
10
Almost all of the commercial houses are based here, as are the
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Group, Aditya Birla Group, Essar, the Reserve Bank of India (RBI), 2008-09 2009-10 2010-11 2011-12 2012-13
National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Domestic Foreign
as well as the Multi Commodity Exchange of India (MCX)). It is
estimated that the Gross District Domestic Product (GDDP)
of Greater Mumbai contributes to 15.1% of the Gross State INVENTORY
Domestic Product of Maharashtra, of which it is the Capital. In
Within Mumbai,2 the midscale segment has the largest inventory,

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29.1%, followed by budget segment with 27.3%, luxury with 23%,

to Indias GDP.
upper upscale with 10.4 % and upscale with 10.2%. The average
inventory per hotel is currently 91 keys. The iconic Taj Mahal
The citys economy has transformed to being a service-led
Palace and Towers, located in South Mumbai, with a total of 560

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keys has been the citys largest for decades, and the current
from a manufacturing base (the citys hot spots of today have all
pipeline also does not feature a larger hotel.
emerged from the former textile mills, especially along Central
Mumbai).
During the last four years, Mumbai saw the largest increase in
inventory during 2010, 5%, with the addition of hotels such as
Mumbai has two major ports which includes the Mumbai Port and
Courtyard by Marriott (292 Keys), Westin Mumbai Garden City
the Jawaharlal Nehru Port (located near Navi Mumbai).
(269 Keys) and Royal Orchid Central Grazia (67 keys).
Mumbais Chhatrapati Shivaji International Airport, located in
During 2011 and 2012, the citys inventory grew at 3% and 2%
the heart of the city handles 82,760 passengers daily, according
respectively, with the introduction of hotels such as Holiday Inn
to estimates. The city-centre location of the airport is unique
Mumbai International Airport (245 Keys in 2011), Ibis Mumbai
in the country, and perhaps even from a global perspective. The
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commissioning of the integrated Terminal 2 in February 2014 is

the inventory grew at 4%, with the opening of the Palladium Hotel
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(currently 271 room keys are operational out of 390, additionally

additional frequencies.
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La) and Ibis Navi Mumbai (196 Keys),
In FY 2012-13, the total number of air passengers surpassed 30
mn, albeit with a decline of 2% y-o-y. Of the total arrivals, 67%
were domestic and 33% were international. Inventory Growth
2009 4,301 4,143 1,741 1,341 3,230

An analysis of data provided by the Ministry of Tourism, shows
2010 4,301 4,564 1,741 1,610 3,230
that the key international source markets for Mumbai are the UK
2011 4,460 4,867 1,741 1,781 3,230
with 26%, the US with 23.7% and Canada with 6.7%.
2012 4460 4,867 1,741 1781 3,530
Mumbai is connected via 2 national highways; they are the NH 3 2013 4,656 4,961 1,741 1,781 3,920

X
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Jaipur, Delhi, Ahmedabad. 2018 6,587 9,225 3,758 2,976 6,611
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000

Mumbai has over 7 major railway stations which includes Budget Midscale Upscale Upper Upscale Luxury
Chatrapati Shivaji Terminus,Dadar, Lokamanya Tilak Terminus,
Mumbai Central, Bandra Terminus, Andheri and Borivali. Mumbai is
headquarters for the Central Railways and Western Railways.
2
Data provided encompasses Mumbai, Suburban Mumbai and Navi Mumbai
33
MAY 2014
Mumbai has a pipeline of 12,098 keys; of which 35.2% is expected SUPPLY-DEMAND DYNAMICS
to be in the midscale segment, 22.2% in the luxury segment, 16.7%
During 2013, the city had a total of 17,059 keys available for
in the upscale segment, 16% in the budget segment and 9.9% in
sale, having grown 4% y-o-y, whilst the total RNS per day was
the upper upscale segment. Approximately 17% of new supply is
11,331 having grown by 1% y-o-y. The increase in RNA per
expected to open in 2014, which includes brands such as Conrad
day outstripped that of RNS per day, resulting in a decrease in
(275 Keys), Lemon Tree (298 Keys), JW Marriott Hotel Mumbai
occupancy by 2% y-o-y to 66% during 2013.
Sahara (525 Keys) and Radisson Blu Plaza Hotel Powai (335 Keys).
Supply-Demand Dynamics
18,000
Mumbai registered an ADR and AOR of INR 6,096 and 16,000
RNA/RNS Per Day

68% respectively in 2012. This indicated a y-o-y drop in 14,000
12,000
ADR by 3.4%, while the AOR increased marginally by 2% 10,000
over 2011. 8,000
6,000
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"
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4,000
hotel segment in the year, adding a total of 1,193 keys to 2,000
2011 2012 2013
the existing supply of keys, thereby witnessing a 9% growth
from the previous year in the organised sector. RNA per day RNS per day
HOTEL PERFORMANCE
MICRO-MARKET PERFORMANCE
The market wide occupancy achieved by hotels in the city during
Mumbai has developed very distinct hotel micro-markets over the
2013 was approximately 67% decreasing marginally by 1%, y-o-y,
last two decades, and each market now operates within its own
whilst the market wide ADR increased by 1%, y-o-y, to INR 6,144.
universe. During 2013, the micro-market that performed best
RevPAR for the city during 2013 was INR 4,140 having declined
in terms of occupancy was Santa Cruz, with approximately 74%.
0.8% y-o-y.
This was, perhaps a result of the higher supply of economy and
Given the citys economy, the dominant demand segment is the @
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corporate segment with 80%, followed by MICE with 10%, long- than half the highest micro-market in Mumbai). The micro-market
stay with 5%, 3% from leisure and 2% from airlines. with the highest ADR was BKC with INR 7,879, primarily due
to the presence of large upper upscale and luxury brands such
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such as IT Innovations Conference (29th 31st October 2013), the lower occupancy at 58%. South Mumbai was found to be a
Interop 2013 (20th 22nd November 2013) and Petro World India rather healthy micro-market with strong ADR of INR 6,705 and
2013 (22nd- 24th August 2013). occupancy of 68.7%.
Hotel Performance Micro - Market Performance

ADR/RevPAR (in INR)
7,000 69% 9,000 80%

8,000 70%
ADR/RevPAR (in INR)
6,000 7,000 60%

68%
6,000
AOR
50%
5,000 5,000
67% 40%
AOR
4,000
4,000 3,000 30%
66% 2,000 20%
3,000
1,000 10%
South Central Navi Andheri Goregaon Juhu Airport Powai BKC Santa
2,000 65% Mumbai Mumbai Mumbai East Cruz
1,000 64%
2011 2012 2013
ADR RevPAR AOR
ADR RevPAR AOR
34
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
OUTLOOK No major changes are expected in the performance of hotels in

the coming year, though additional supply in the city will moderate
The Thane-Belapur Road in Navi Mumbai appears to be emerging
occupancy growth. The inauguration of the new terminal at

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rates in this belt are economical for several companies. Hence

city, spurring airline demand this would also depend on the
with companies shifting to Navi Mumbai, room night demand
completion of the upgrade to the runways.

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is expected to gets its very own airport, with an aim reduce

congestion at the existing Mumbai airport.
As one of two primary cities in the country,
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developments providing facilities for this segment, as also the Mumbai will continue to attract investments and
agglomeration of hotels around Powai, BKC and Central Mumbai attention.
contributing to this. This will further be augmented with the
Reliance Convention Centre set to be developed in BKC. The
proposed development is likely to span over 18.5 acres and
#"
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with a project cost of INR 75,660 millions and is planned to
be completed by mid 2016. During 2014, some of the events
expected to take place are - World Meet of The Power & Energy
ADR - INR 6,360
Industry (10th-12th February), Chemspec India (10th-11th April),
Enter Tech World Expo 2014 (10th-12th February) and CPHL India
AOR - 61%
(2nd-4th December 2014).
35
MAY 2014
THE NATIONAL CAPITAL REGION (NCR) country. The city receives high density of visitors through its road
network as well, which runs through the state via major national
OVERVIEW highways such as NH 1, NH 2, NH 8, NH10, NH 24
The NCR3, (including Gurgaon and NOIDA) has, perhaps, the
most developed infrastructure in the country in terms of civic INVENTORY
infrastructure, national and state highways, railways, metro rail and NCR had a total inventory of 20,400 keys in 2013 in the

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organized segment. Overall, 29% hotel inventory is in the
in commercial, retail as well as residential space. NCRs services midscale segment, followed by 28% each in the upscale and luxury
sector is a huge contributor to the economy and Delhi achieved segments, and 8% each in the budget and upper upscale segments.
highest per capita income of 201,083 in the country in 2012-13. The average inventory per hotel in NCR is 131 for the organised
segment, while the Ashok Hotel at New Delhi (550 keys) retains
The NCR is different things to different market segments, with its position as the largest hotel in the region
Delhi being the preferred port of entry for international tourists
(and being part of the iconic Golden Triangle); it is important The year 2013 witnessed an increase of 17% in inventory, over
for commercial and political reasons (being the capital of the
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/

country), and for other segments (sports, including the only F1 inventory of about 50%, budget by 25%, 7% in luxury and 6% in
track in the region). midscale segment during the year 2013.
Delhis Indira Gandhi International Airport has emerged as the

Inventory Growth
preferred port of entry to international visitors, accounting for
764
35% of the arrivals into India. The location of the airport is again 2009 3,606 2,713 875 4,187
827
unique, in that it provides contiguity between Delhi and suburban 2010 3,926 3,166 1,279 4,617
1,217
Gurgaon, and has emerged as a business district in itself. 2011 4,840 3,349 1,454 4,979
Year
1,355
2012 5,536 3,725 1,596 5,279
In FY2012-13, the total number of passengers reduced to 34 mn, 2013 1,688 5,867 5,608 1,596 5,652
a decline by 4%, y-o-y. This is only the second instance of a decline
in recent years, the last being in 2008-09. Of total passengers in
2018 2,695 10,154 6,572 2,281 7,908
2012-13, 66% were domestic and 34% were international.
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
Budget Midscale Upscale Upper Upscale Luxury
The key international source markets are the USA with 11%, the Source: Cushman & Wakefield Hospitality
UK with 8% and Canada with 4%.
15 new hotels opened for business in 2013, adding a total of 2,920
Air Passengers keys to existing room supply.
40
Gurgaon saw the opening of Hilton Garden Inn (201 keys),
30 Vivanta by Taj (208 keys), Hyatt Regency (451 keys) & Anya
Hotel (117 keys);
in Mn
20
Delhi, of JW Marriott (323 keys), Dusit Devarana (50 keys),
10 WelcomHotel Dwarka (393 keys), Best Western Taurus (84
keys), Lemon Tree Premier Hotel (287 keys) & Red Fox (207
0
2008-09 2009-10 2010-11 2011-12 2012-13 keys);
Domestic Foreign
Source: Airports Authority of India (AAI) Savoy Suites (58 keys) & Crowne Plaza (398 keys) in Greater
Noida; Park Ascent (72 keys) in Noida.
NCR has good connectivity via rail and road to other key cities of
the country. NCR has a Metro rail connecting Delhi to Gurgaon Additionally, 2013 also witnessed re-branding of Claridges
and Noida currently. New Delhi Railway Station is headquarters Surajkund Hotel to Vivanta by Taj, Double Tree by Hilton Mayur
for the Northern Railway and is one of the busiest stations in the Vihar to Holiday Inn and Hilton Mayur Vihar to Crowne Plaza.
3
NCR- we have covered seven micro-markets in NCR for hospitality namely Delhi, The NCR has perhaps been the most active development
Noida, Greater Noida, Gurgaon, Faridabad, Manesar and Ghaziabad destinations in the country, with over 17,000 keys expected to be

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*=
36
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
will see increases, ranging from a 27% addition in Delhi, 25% in 10,935 per day, growing by 12.9% y-o-y. The growth of demand,
Noida, 24% in Gurgaon, 13% in Greater Noida, 6% in Manesar and therefore did not keep up with growth in supply (as is typical in a
4% in Faridabad. build cycle) resulting in decrease in the AOR, by 3.3%, to 54%.
The pipeline for 2014 includes Ibis hotel, Hyatt Andaz, Holiday Supply-Demand Dynamics
Inn, Pullman, Novotel, all in the Delhi Aerocity Hospitality District.
Other key hotels that are likely to open in 2014 in NCR are 25,000
RNA/RNS Per Day

Formule 1, Leisure Inn, Hyatt Andaz, Hyatt Place, Red Fox, all 20,000
in Gurgaon; Four Points by Sheraton,Vivanta by Taj, Park Inn by
15,000
Radisson in Delhi, Savoy Suites Noida, Crowne Plaza in Greater
Noida, The Gateway hotel in Faridabad & ITC Golf Resort at 10,000
Manesar. 5,000
0
Quick Review Almanac 2013: 2011 2012 2013
NCR registered an ADR and AOR of INR 7,835 and 55%, Source: Cushman & Wakefield Hospitality
respectively in 2012 depicting a 6% drop in AOR and 1%

drop in ADR compared to 2011 MICRO-MARKET PERFORMANCE
The hotel inventory in NCR grew by 9% in 2012 over It would be no surprise that the Delhi market recorded the
2011, compared with 14% increase in 2011 over 2010. highest ADR of INR 8,140. However, the surprise perhaps is that
Noida witnessed the highest AOR of 58% in 2013.
HOTEL PERFORMANCE
The other two micro-markets recording reasonable ADRs in
In 2013, the occupancy for the market was 54%, a decrease the NCR were Gurgaon with an ADR of INR 6,850 and Noida
from 55% in 2012. Similarly, ADR was INR 7,420, decreasing by witnessing ADRs of INR 6,471. Greater Noida, Faridabad and
5%, y-o-y. The double whammy decrease in both occupancy Ghaziabad achieved an ADRs of INR 5,836, INR 5,510 and INR
and rates could perhaps be attributed to the increased supply 4,820, respectively. Manesar achieved the lowest ADR of INR
and competition, as well as the maturing of the micro-markets 4,460.
independently of each other.
AOR-wise, Greater Noida at 35% was the lowest, while
Hotel Performance Ghaziabad was at 48%, Gurgaon 50%, Manesar 52%, Faridabad
55% and Delhi 57%. The decrease in occupancy could be
10,000 62% attributed to the increase in supply (19% inventory in Gurgaon,
60% 46% in Greater Noida, 14% in Noida, and 12% in Delhi).
ADR/RevPAR (in INR)
8,000
58%
6,000 56%
AOR
Micro-Market Performance
4,000 54%
9,000 70%
ADR/RevPAR (in INR)
52% 8,000
2,000 60%
50% 7,000
6,000 50%
AOR
0 48% 5,000 40%

2011 2012 2013
4,000 30%
ADR RevPAR AOR 3,000
20%
Source: Cushman & Wakefield Hospitality 2,000
1,000 10%
0 0%
SUPPLY-DEMAND DYNAMICS Delhi Noida Greater Faridabad Gurgaon Manesar Ghaziabad
Noida
During 2013, the NCR had a total of 20,411keys on offer per

ARR (2013) RevPAR (2013) AOR (2013)
day, growing by 16.7% y-o-y, whilst the market had a demand of Source: Cushman & Wakefield Hospitality
37
MAY 2014
OUTLOOK {"
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The hospitality market in the NCR gains from both commercial/ in hotel dynamics.
business demand as well as tourist demand, being a key
differentiator from other markets in the country. The additional
supply that has recently been added, as well as the pipeline for the
next few years will outpace demand in the short-to-medium term, #"
=/

as has been the case historically. The other side of the coin is that
raw demand has grown, a positive for the industry. We expect this
ADR - INR 7,568
trend to continue in the near term. AOR - 52%
The availability of suitable sites at suitable prices continues to be
an issue, given the historical acquisition costs of land. The Delhi
Development Authority (DDA) has recently permitted hotels
higher FSI, as well as construction / conversion of up to 40%
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!
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/
consolidation, as well as opening up a new market segment of

branded, serviced residences.
38
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
PUNE INVENTORY
OVERVIEW Pune has an inventory of approximately 7,470 keys, with an

average hotel sized at 75 keys. The largest hotel in the market is
Punes importance derives as much from the industrial and
the JW Marriott Hotel & Convention Centre with 416 keys this
manufacturing sectors as from education and services.Traditional
honour will remain with the hotel in the foreseeable future, with
manufacturing units in the city include automobiles and
no other planned hotel offering higher room counts. Of the total
infrastructure (Tata Motors, GM, Mercedes Benz,Volkswagen, Bajaj
existing supply, 45.7% is in the budget segment, 29.2% is midscale
Auto, Thermax, etc).
segment, 15.8% is upscale segment, and 9.3% is upper upscale
Punes educational institutes have also provided the base for the
development of the IT/ITeS sector in the area: Hinjewadi, Pimpri- Inventory Growth
Chinchwad and Chakan. 2009 2,715 1,394 751 277
2010 2,886 1,394 1,179 693

These micro markets are seeing major developments and 2011 3,155 1,783 1,179 693
accounts for a large number of room night demand for hotels 2012 3,200 1,783 1,179 693
present here. 2013 3,413 2,181 1,179 693
Punes airport is a civil enclave within the Lohegaon Air Force 2018 4,120 2,779 1,667 1,443 620
Base, and is located 10 km from city centre. Due to its defence 0 4,000 6,000 8,000 10,000 12,000 14,000
role, there is limited opportunity to expand and enhance services Inventory
here, and plans for construction of a new airport have been Budget Midscale Upscale Upper Upscale Luxury
proposed at various times and places.
During 2012-13, the air passengers were over 3.2 mn and had In 2013, the city saw an addition of 611 keys, which accounted for
experienced a negligible increase of 0.05%. Of the total number of a 9% growth in inventory y-o-y, with the opening of Courtyard by
air passengers, 98% were domestic and 2% were foreign. Marriott Chakan (175 keys), Formule 1 (104 keys), Premier Inn
Kharadi (109 keys) and Novotel (223 keys).
Pune is connected via 3 national highways; these include the
NH-4, NH-9 and NH-50. These highways provide connectivity to Quick Review Almanac 2013:
locations such as Bangalore, Chennai, and Hyderabad.
Pune registered an ADR and AOR of INR 3,457 and 57%,
The Pune railway station is the main railway station, and provides respectively in 2012 depicting a 2% rise in AOR and 3%
connectivity to all major cities such as Mumbai, Ahmedabad, etc. drop in ADR compared to 2011
+

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The hotel inventory in Pune grew by 51% from 2009

way reducing travel time by two hours.
to 2012, adding 2,292 keys belonging to the organised
segment, out of which the upscale segment accounted for
Air Passengers 1,176 keys.
3
HOTEL PERFORMANCE
2 In 2013, the AOR for Pune was 56%, having declined 3% y-o-y.
in Mn
The market wide ADR for the city was estimated at INR 3,559,
1 increasing by 2.8% y-o-y. The decrease in occupancy could be
attributed to the increased supply, and the heartening trend is
the increased average rates, which demonstrates the potential for
0
2008-09 2009-10 2010-11 2011-12 2012-13 further consolidation. RevPAR during 2013 was INR 2,000 having
Domestic Foreign grown 2.3% y-o-y.
A majority of Punes room night demand is comes from the

corporate segment with 75%, MICE with 15%, long-stay with 5%
and leisure with 3%.
39
MAY 2014
During 2013, some of major events held in Pune included Micro-Market Performance
TEDxPune 2013 (23rd November), Urological Society of India
5,000 70%
Conference (USICON) 2013 (16th-20th January) and Schaeffer 4,500 60%
ARR/RevPAR (in INR)

India: Innovation Day 2013 (25th- 26th February) etc. 4,000
3,500 50%
AOR
3,000 40%
Hotel Performance 2,500
2,000 30%
4,000 58% 1,500 20%
1,000
ARR/RevPAR (in INR)
3,500 10%
57% 500
3,000
0 0%
AOR
2,500 Pimpri - Koregaon Hinjewadi Shivaji Airport
56% Chinchwad Park Nagar
2,000 ARR (2013) RevPAR (2013) AOR (2013)
1,500 55% Source: Cushman & Wakefield Hospitality
1,000
54%
500
0 53% OUTLOOK
2011 2012 2013
Pune has developed as one of the major hotel development
ADR RevPAR AOR

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and the supply pipeline is evidence of this - 3,160 keys, of which

SUPPLY-DEMAND DYNAMICS 38.7% is expected to become operational in 2014. This includes
brands such as Conrad (310 Keys), Hyatt Place (130 Keys) and
In 2013, the city had 7,466 keys on offer, having grown 9% y-o-y, Country Inns & Suites Hinjewadi (165 keys) amongst others. As a
whilst the total RNS per day was 4,203 having grown by 7.5% result, the market wide AORs are expected to take a hit.
y-o-y. The growth in RNA per day outstripped that of RNS per
day, resulting in a decrease in occupancy by 1% Pune is also witnessing considerable development north of the
city, with the development of an upcoming commercial and
Supply-Demand Dynamics industrial area known as Chakan. Courtyard by Marriott in
Chakan is currently the only branded hotel inventory operational
8,000 in the micro-market.
7,000
RNA/RNS Per Day
6,000
5,000
4,000
3,000 While hotel performance in Pune has not met
2,000 expectations, it will remain an important market,
1,000
0 and realise potential in the medium term.
2011 2012 2013

#"
=/

MICRO-MARKET PERFORMANCE
During 2013, the micro-market with the highest AOR was Pimpri-
ADR - INR 3,630
Chinchwad with 64%, whilst the micro-market with the highest
ADR was Airport with INR 4,525.
AOR - 52%
40
TIER 2 CITIES
MAY 2014
CHANDIGARH INVENTORY
Chandigarh has nearly 1,870 keys in the organized segment. The
OVERVIEW
average inventory per hotel in the city is 69 keys. The hotel with
From an urban development perspective, Chandigarh is unique, the highest inventory is JW Marriott with 169 keys.
in that it is a centrally administered Union Territory (UT) and the
joint capital of the States of Punjab and Haryana. The UT has two 2011 witnessed 33% increase in the organised inventory, followed
satellite towns Panchkula in Haryana & Mohali in Punjab acting by 24% increase in 2012 and 4% in 2013. The World Hotel
as counterweights to the city. Collectively, they are referred to as Turquoise added 71 keys with its opening in 2013.
Chandigarh Tri-city. Zirakpur is also an important suburb adjacent
to the tri-city, and has been included in this review. Chandigarh has about 1,100 keys in the pipeline, which will
@

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In addition to its importance as an administrative centre, opened in January 2014 with 179 keys. Some of the other key
Chandigarh is also the traditional transit point to Himachal hotels in the pipeline are Bristol, The Sheraton, Hyatt Regency,
Pradesh and Jammu & Kashmir. In recent years, the UT has also Ginger, Pride Biznotel, Park Inn by Radisson and Holiday Inn.
promoted the establishment of IT & ITeS, biotechnology, medical
sciences and industrial technologies oriented companies. With the addition of all this supply, the composition of the hotel
market is likely to change from 54% to 46% in budget segment,
While Chandigarh has a domestic airport, it receives most of its 29% to 27% in midscale segment, 5% to 8% in upscale segment,
visitors by road or rail, given the excellent connectivity to Delhi. 0% to 5% in luxury segment and from 12% to 14% in upper
upscale segment.
The city welcomed 1 mn tourists with domestic tourists
comprising 96% and foreign tourists 4%. Domestic tourists Inventory Composition 2013
increased by 2% while foreign tourists declined by 8% in 2012
over 2011. Chandigarh airport witnessed a 10% growth rate 12%
in the domestic air passengers, from 802,059 in FY 2011-12 to 5%

881,555 in FY 2012-13 depicting growth in the city. Chandigarh
Airport is being further upgraded in Village Jheorehri, near Mohali,
over 306 acres of land. Air India, Emirates and Jet Airways have 54%

"

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''
"
29%
plans to augment the airport to a capacity of 1,600 passengers
@

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commenced from the airport, and this trend is also likely to Budget Midscale Upscale Upper Upscale
continue. Source: Cushman & Wakefield Hospitality
Air Passengers
Inventory Composition 2018
1.0
5%
0.8
14%
in mn
0.6
46%
0.4 8%
0.2
0
2008-09 2009-10 2010-11 2011-12 2012-13 27%
Domestic Passengers
Chandigarh also receives various visitors and tourists as it is

a transit destination from nearest metro city Delhi to other
destinations up north. NH-21 and NH-22 connect the city to
other northern states. It is well connected to major cities via the
Northern Railway Zone.
42
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
5.3% y-o-y. Growth in keys sold being higher than the growth in
Quick Review Almanac 2013: =
@

" "

["

"
robustness of market demand in the city.

Chandigarh clocked an ADR of INR 3,600 in 2012,
an increase by 9%, over the last year. The AORs also
witnessed an increase by 3% to 56% in 2012. Supply-Demand Dynamics
3,000
HOTEL PERFORMANCE
RNA/RNS Per Day

2,500
2,000
The citys ADR decreased by 2% to INR 3,562 in 2013. . The AOR
increased to 57% during 2013 from 56% in 2012. The reduction 1,500
in ADR along with an increased AOR is mainly a result of higher 1,000

penetration of newly opened hotels which entered the market in 500
2012 and 2013. 0
2011 2012 2013
Chandigarh is primarily a business and a transit destination. The RNA per day RNS per day
corporate segment comprises 80% of the total demand, followed
by 14% from leisure, 4% from MICE and 2% from long stay.
Chandigarh witnessed 1% increase in RevPAR, from INR 2,029 in OUTLOOK
2012 to Rs. 2,044 in 2013.
Chandigarhs hotel demand arises primarily from corporate and
transit demand a trend that is expected to continue. However,
Hotel Performance we anticipate a decline in occupancy given the additions to supply
4,000 58% in 2014.
ADR/RevPAR (in INR)
3,500 57%
3,000 56%
2,500 55%
AOR
2,000 54% Whilst a relatively small market, Chandigarhs

1,500 53%
1,000 52% role as the hub for Northern India will enhance
500 51%
/
0 50%
2011 2012 2013
ADR RevPAR AOR
#"
=/

SUPPLY-DEMAND DYNAMICS ADR - INR 3,634

During 2013, the total keys available per day was 2,670, growing
by 2.7% y-o-y, whilst the total RNS per day was 1,532, growing by
AOR - 49%
43
MAY 2014
COIMBATORE after Chennai. The airport has recorded y-o-y growth of 7.5%
from 2008 to 2013, with the exception of 2012-13 when arrivals
OVERVIEW dropped to 1.29 mn from 1.34mn in 2011-12. 9% of the total
arrivals in 2012-13 were foreign arrivals whereas 91% of the
Situated on the banks of river Noyyal, Coimbatore is the second
travellers were of domestic.
largest city in the state of Tamil Nadu. It is one of the fastest
growing Tier 2 cities in India with major growth industries being
textile, industrial, commercial, information technology (IT), INVENTORY
healthcare and manufacturing. Coimbatore has a total supply of 3,000 keys with 60% in the
organised segment. A majority of the inventory 50% in the
The citys textile business is especially well-organised, and it has organised sector has entered the market during the last four
been said that the city has the highest textile activity per sq km in years. Currently the upscale segment of hotels have the largest
the country. The city is also an education hub with more than two inventory share in the market at 44% while the budget segment
dozen engineering colleges, two medical colleges, an Air Force comprises of 35%, followed by midscale segment with 21%.
administrative college, a forest college, more than 75 arts and
science colleges and 6 universities. There were no additions to the branded inventory of the city
in 2013. However, the 107-key Park Plaza was rebranded as a
Coimbatore has a total of 9 SEZs both operational and under Clarion Hotel in October 2013. The average number of keys per
implementation concentrating mainly on IT, ITES, Electronic hotel in the city is 93 keys with the 254-key Le Meridien being the
hardware and engineering sector. These SEZs once complete, will single largest hotel. The city is expected to see further addition
be spread across a sprawling 315 hectares. Coimbatore is being to the branded inventory with Hilton Garden Inn and Radisson
recognised as an IT hub with IT majors like Cognizant and Wipro Blu planning to commence operations by 2015 with a combined
having interests here. The city recently witnessed the introduction inventory of 334 keys.
of mall retail space of close to 1 mn sf. spread across two malls;
"

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|

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=/
|
Coimbatores strategic location in the Western Ghats Gap

ensures good connectivity by means of road, railways and air with
35%
the rest of the country. The three National Highways passing 44%
through the city are NH-47, NH-67 and NH-209. The city has
good public transportation providing both inter-city and intra-city
connectivity. Coimbatore Junction is the second largest income
generating railway node in the Southern Railway Zone.
21%
Coimbatore is also the transit hub between Tamil Nadu and
Budget Midscale Upscale
Kerala, as also the entry point for Udhagamandalam (Ooty), a Source: Cushman & Wakefield Hospitality
popular hill destination of the south.
Air Passengers Inventory Composition 2018

1.6
1.4 27%
1.2 28%
in mn
1.0
0.8
0.6
0.4 8%
0.2
37%
0
2008-09 2009-10 2010-11 2011-12 2012-13
Budget Midscale Upscale Upper Upscale
Domestic Passengers Foreign Passengers
Coimbatore International Airport, located at Peelamedu, 18 km

from city centre is the second busiest airport in Tamil Nadu,
44
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
OUTLOOK
'
/

"
@

@

!
Coimbatore recorded an AOR of 59% in 2012, declining by feature the second longest runway in South India. Other
1% since 2011 and 10% from 2010. infrastructure plans include a monorail, and other civic amenities.
These have been planned with the anticipated commercial activity
The ADR for the city in 2012 was INR 3,660, a 4% drop
from the SEZs and other industrial districts in the area. This
since 2011 but an increase of 20% since 2010.
improved infrastructure along with the increased commercial
activity in the SEZs is expected to create more demand for
HOTEL PERFORMANCE organised hotel accommodation in the city. There is currently
Coimbatore is one destination that has seen a decline in both limited branded inventory in the city and a very minimal growth
occupancy and room rates in 2013. The market wide AOR for pipeline. Therefore, Coimbatore will remain an interesting location
the city dropped from 59% in 2012 to 57% in 2013. The ADR for brands looking to expand their footprint in the country,
also witnessed a small correction with the market wide ADR especially in southern India.
dropping to INR 3,566 for 2013 as compared to INR 3,660 for
2012. Consequently, the RevPAR for Coimbatore dropped to INR
2,026 during 2013, compared to 2012s achievement of INR 2,149.
Coimbatore will continue to see hotel activity
While there has been a minor drop in demand, the addition of
600 keys to the total organised inventory over the last three due to its commercial importance, as well as
years contributed to declines in all three key performance indices. being the gateway to destinations in the Western
Ghats.
Hotel Performance
4,000 61%
ADR/RevPAR (in INR)
3,500
60%
3,000 #"
=/

59%
2,500
ADR - INR 3,637
AOR
2,000 58%
1,500
1,000
57% AOR - 58%
56%
500
0 55%
2011 2012 2013
ADR RevPAR AOR
During 2013, the total number of keys available in the city,
at 1,302, did not change from 2012, as no new hotels were
commissioned. The total RNS per day, for 2013, was recorded at
740, declining by 3.7% y-o-y with respect to 2012.
1,400
RNA/RNS Per Day
1,200
1,000
800
600
400
200
0
2011 2012 2013
45
MAY 2014
KOCHI increase of 3% over last year. Approximately 58% of total arrivals

recorded in 2013 were foreign travellers.
OVERVIEW
The city of Kochi is the most densely populated city in the state Air Passengers
and is part of an extended metropolitan region, which is the 6.0
largest Urban Agglomeration in Kerala. 5.0
4.0
in mn
Kochi is one of the 10 major ports of India, and its historic
3.0
importance stems from this naval background. Kochi is home to
the Southern Naval Command of the Indian Navy and the state 2.0
headquarters of the Indian Coast Guard. Commercial maritime 1.0

facilities of the city include the Port of Kochi, an International 0.0
Container Trans-shipment Terminal, the Cochin Shipyard, offshore 2008-09 2009-10 2010-11 2011-12 2012-13
?+|

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Its commercial and political importance is also historical, with

Kochi being one of two princely states integrated to form present INVENTORY
day Kerala (along with Thiruvananthapuram). It houses the High Kochi has a total inventory of approximately 4,300 keys across
Court of Kerala and Lakshadweep, and the Cochin University of different market segments. The midscale hotels, with 60%,
Science and Technology. contribute to the largest share of the inventory followed by
upscale and upper upscale inventory with 24% of the inventory
The Cochin Stock Exchange, International Pepper Exchange, while 10% of the existing inventory is in the budget hotels and the
major chemical industries like the Fertilisers and Chemicals remaining 6% is in the luxury segment. Kochis hotels are amongst
Travancore Limited (FACT), Travancore Cochin Chemicals (TCC), the smallest in the country, at an average of 58 keys. The Holiday
Indian Rare Earths Limited (IREL), Hindustan Organic Chemicals Inn is currently the largest hotel in the city with 253 keys.

]`#Z

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Q/

=
Transformers and Electricals Kerala Limited (TELK) and industrial The opening of Banyan Tree, an all-pool villa resort, originally
parks like the Cochin Special Economic Zone and Infopark are scheduled for 2013, has run into legal hurdles and the 166 keys
present here. Park Kochi which was slated for a 2013 opening has also been
delayed and is expected to open this year. The other hotel
Kochi is also de-facto, the tourism capital of the State, with the scheduled to open in 2014 is the Keys Hotel with an inventory of
airport being the primary entry point for both domestic and 120 keys.
foreign tourists. The developed infrastructure in the city and
environs has also helped in this city achieving more than a fair Kochi is expected to see a further addition of approximately
"

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=

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with brands like JW Marriott, Grand Hyatt, Movenpick, Radisson

Kochi is one of two entry ports into the State of Kerala, the other and Hilton entering the market.
being Thiruvananthapuram.

Kochi is part of the North-South Corridor of Indias National
Highways system via the NH 47 and NH 17. The city has two 3%
major railway stations Ernakulam Junction and Ernakulam Town.
22%
Given the density of urban development in the State, Southern
38%
Railways has planned a suburban railway system connecting Kochi
to nearby towns and cities, using Mainline Electrical Multiple Unit
services, which further increases commuting to the city.
Kochis international airport at Nedumbassery opened in 1999,

37%

!
"
/

"


The total air passengers for Kochi duirng 2012-13 have been
estimated to be nearly 4.9 mn, thereby recording an y-o-y
46
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
Inventory Composition 2018 Supply-Demand Dynamics

10% 3,500
3,000
RNA/RNS Per Day

2,500
20% 37%
2,000
1,500
1,000
500
34% 0
2011 2012 2013
Budget Midscale Upscale Upper Upscale Luxury RNA per day RNS per day
Source: Cushman & Wakefield Hospitality Source: Cushman & Wakefield Hospitality
OUTLOOK
Kochi is considered the commercial capital of Kerala and is one
The ADR for Kochi showed an upward trend, increasing by of the prominent industrial cities in the country. There are several
7% to INR 3,920 in 2012. infrastructure update projects in and around the city including
the Kochi Metro (completion by 2017), the Kochi International
AOR rose by 3% y-o-y to 70% in 2012
Container Transhipment Terminal (ICTT / Vallarpadam Terminal),
RevPAR for the organized hotel segment in 2012 stood at which is the only such port in the country, will be completely
INR 2,590. operational within the next three years, the Vytilla Mobility Hub
(integrated transport hub for road, metro rail and inland water
transport), which will increase accessibility within Kochi and to
HOTEL PERFORMANCE other source markets.
The performance of hotels in Kochi has remained largely stable
The hotel market has over the years, matured, and has taken
in terms of ADR market wide, at INR 4074 for the year 2013, a
advantage of both leisure and commercial demand. At the top end,
marginal growth over 2012.
the hotel industry had much reliance on leisure this has changed
in the last few years with commercial demand increasing in this
The AOR for Kochi has however noted a dip, dropping to 67% segment. Transit demand, induced by the airport as well as the
in 2013 as compared to 70% in 2012. Market wide RevPAR for central location of Kochi in the State will also play a notable role
Kochi hotels was INR 2,739 for 2013 which is a 5.7% growth over for hotels in the city.
the RevPAR for 2012 at INR 2,590.
With the gentle revival of both commercial and real estate
Hotel Performance activity, demand for hospitality is expected to remain stable.
4,500 71% Demand derived from tourist activities have so far supplemented
4,000 commercial demand (especially at the top end of hotels), and this
ADR/RevPAR (in INR)
70%
3,500 situation is anticipated to continue.
69%
3,000
AOR
2,500 68% Occupancy as a measure is expected to decline in the short term,

2,000 67% given additions to supply, though rates are expected to hold.
1,500
66%
1,000
500 65%
0 64%
2011 2012 2013 Kochis position as the gateway to the State as
ADR
RevPAR AOR
well as its commercial activity (akin to Jaipur)
make this a sustainable hotel market.
Supply of hotel keys in the city remained unchanged between
2012 and 2013, at 3,179 per day. At the same time, there was a #"
=/

growth in raw demand, as seen from the growth in RNS to 2,138
in 2013.
ADR - INR 4,155
AOR - 62%
47
MAY 2014
LUCKNOW INVENTORY
Lucknow has approximately 1,500 keys in the organised sector
OVERVIEW
spread across 25 hotels. Over 60% of organised supply of hotel
The City of Nawabs, Lucknow, is the Capital of Uttar Pradesh accommodation in Lucknow is in the budget segment a key
and is situated on the banks of the River Gomti. The citys difference from all other featured markets. 21% of inventory
importance is derived from both its political importance, as well is in the upper upscale and upscale segments and the midscale
as its historical prominence. accounting for 19%. The average size of hotels in the city is 47
keys and the Vivanta by Taj is the single largest hotel in the market,
The industries that drive the economy of Lucknow are with 110 keys.
handicrafts, textiles, IT, biotechnology, gems & jewellery, software,
computer hardware, silk, leather and leather goods, agriculture Increasing commercial activity and prominence of the city has
and chemicals. resulted in the development of more hotels in the organised
sector. The city will see the commissioning of at least 1,000 keys
Infrastruture development has been a focus of the Lucknow

"

"

"
$
/

Development Authority (LDA) in recent years and examples of

this include the development of Gomtinagar scheme on Faizabad The 115-key Renaissance Hotel and 180-key Hyatt Regency
highway, Kanpur road scheme, an ultra modern scheme Amar are scheduled to be commissioned during 2014. The other
Shaheed Path to connect Kanpur road and Faizabad road. brands that will enter the market in the next few years include
Q

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Lucknow enjoys good connectivity with the rest of the country by Wyndham. With these hotels, the proportion of budget
by road, rail and air. There are four National Highways that pass accommodation will decline.
through Lucknow - NH24, NH25, NH28 and NH56 connecting it
to the neighbouring states. Lucknow is also a major station in the Inventory Composition 2013
Indian Railways network.
7%
The Chaudhari Charan Singh International Airport located at 12%

Amausi about 20 kms from city centre is connected directly
with major cities of the country. The airport was declared an

!
"
"

"
<
# * 67%
14%
operation Council (GCC) countries.
Air Passengers
2.5 Budget Midscale Upscale Upper Upscale Luxury
2.0
in mn
1.5 Inventory Composition 2018

1.0 5%
0.5 21%
0
2008-09 2009-10 2010-11 2011-12 2012-13 50%
Arrivals at this airport have seen a surge from 2008 to 2012 at an 25%
y-o-y growth of 26.5%. However, this growth was not sustained
for 2012-13, when there was only a marginal increase of 3,860
passengers and the total number of arrivals was recorded at 2.02
mn. During 2013, international arrivals contributed to 19% with
the remaining 81% being domestic travellers
48
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
OUTLOOK
Lucknow has seen an increase in commercial and economic
ADR increased by 8.5% from INR 3,160 in 2011 to 3,430 activities in the recent past and this trend will continue. The
in 2012. development of IT and Biotechnology parks in the city and
consequent commercial activity, together with improved
AOR increased by 3% from 59A% in 2011 to 62% in 2012.
infrastructure of the city augur well for hotels. There is a proposal
RevPAR increased by 13% market-wide to INR 2,110 in for Lucknow Metro and monorail services to provide speedy
2012. mass transport and decongest the roads of the capital city. The
/
"

"

_

$

@

HOTEL PERFORMANCE 2017. Lucknow is also rejuvenating its tourist destinations and
policies to promote tourist destinations in the region.
Lucknow is one of the most important commercial centres in
North India, and is also a prominent destination for domestic With the improved infrastructure, increased commercial &
leisure travellers. The main demand drivers for the hotels in the tourism activity and new branded hotels entering the market,
city are commercial, tourist, political and administrative activities. the face of the Lucknow hospitality industry is set to see a
transformation in the years to come. This positive change is also
The ADR for the city has grown marginally from INR 3,430 in expected to encourage more brands to enter the market.
2012 to INR 3,527 for 2013. The AOR for Lucknow hotels has
also registered a 2% rise from 62% in 2012 to 64% in 2013. The
corresponding RevPAR for the city has shown a 7.5% rise in 2013
and is at INR 2,245. Lucknows hotel market has seen little activity,
given macro-economic conditions. The
Hotel Performance
dominance of the budget segment in the city is
4,000 65%
also set to change, with demand generation due
ADR/RevPAR (in INR)
3,500 64%
3,000 63% to infrastructure development.
62%
2,500
AOR
61%
2,000
60%
1,500
59%
1,000
#"
=/

58%
500
0
57%
56%
ADR - INR 3,683

2011 2012 2013
ADR RevPAR AOR AOR - 55%
During 2013, Lucknow had 1,701 keys on offer each day, with no
increase from 2012. As against this availability, 1,083 keys were
sold in 2013, representing a growth of 2.9%, y-o-y.
1,600
RNA/RNS Per Day
1,200
800
400
0
2011 2012 2013
49
MAY 2014
NAGPUR sector and in the budget segment. The average size of hotels here
is 57 keys.
OVERVIEW
Situated on the river Nag, in the Vidharba region of Maharashtra, Inventory Composition 2013
Nagpur is the largest city in Central India and third largest city in
the State after Mumbai and Pune. Interestingly, Nagpur is located 24%
at the geographical centre of India and is the 13th most populous
city in the country.
60%
Nagpur also hosts the winter session of the Maharashtra State
Legislative Assembly, which also drives some demand to hotels in 16%
the city.

In a survey by ABP News IPSOS in 2013, the city has been
/

"
@

" "

"
@
greenery, public transport and health care parameters. Nagpur

is of importance for the Indian Defence Forces as well being the Inventory Composition 2018
headquarters for the Maintenance Command for Indian Air Force
and the ordnance factory being located here. 12%
Nagpur with its central location is well connected by air, road and
43%
railways. The two major National Highways that service Nagpur
26%
are NH6 and NH7. Nagpur Junction is one of the major railway
junctions in central India with regular trains connecting Nagpur
with the rest of the country.
19%
The citys airport Dr. Babasaheb Ambedkar International Airport Budget Midscale Upscale Upper Upscale
connects the city to 12 domestic and 1 international destinations. Source: Cushman & Wakefield Hospitality
The airport recorded over a 14.5% growth, y-o-y with 1.4 mn
air passengers during 2011-12. However, the air passengers ["
/
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at Nagpur recorded a decline of 11% for the year 2012-13, keys commenced operations in 2012, and also features the
recording 1.23 mn arrivals. largest inventory in the city. There is, however, a fair pipeline of
approximately 700 keys being added to the branded inventory
Air Passengers of the city over the next few years. Royal Orchid, Hyatt Hotels
& Resorts, and Taj are among the brands expected to enter the
1.4
market.
1.0
in mn

0.6
Nagpur hotels achieved an ADR and AOR of INR 2,720
0.2 and 59%, respectively for 2012. The ADR increased by 9.9%
over 2011.
0
2008-09 2009-10 2010-11 2011-12 2012-13 The RevPAR for 2012 was registered at INR 1,498, a rise
Source: Airports Authority of India (AAI) of 11% over the previous year.
Nagpur being major railway junction in central India receives a fair HOTEL PERFORMANCE
amount of its visitors via rail.
Nagpur has traditionally been a centre of commerce and trade
in Central India, in addition to being a centre for citrus fruits and
INVENTORY
other vegetables. Hotels here, are therefore, driven by traders
The Nagpur hotel market is still at a nascent stage with minimal and commercial visitors. Hotels also receive a boost when the
branded inventory. With approximately 2,000 keys spread across State Legislative Assembly meets here once a year. The city
40 hotels; the majority of the inventory is in the unorganised has experienced growth in the last couple of years with 2012
50
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
recording a11% growth in the ADR over 2011 and subsequently, economic activity in the area. Boeing has announced plans to set
in 2013, recording a 5% growth to reach INR 2,836. The market- up their MRO Maintenance, Repair & Overhaul unit in the city.
wide AOR for the city has also shown growth - hotels achieved an Other investments in the area include a recent one by Infosys, the
AOR of 61% in 2013 as compared to 59% in 2012. The low ADRs IT major in the MIHAN area.
in the market may be attributed to the limited branded inventory.
The RevPAR increased by 7%, over 2012, to INR 1,737 market-

"

!

"
@/

"

wide during 2013. term. In the near term, demand is expected to grow at the same
levels. With the opening of branded hotels such as the 300-key
Hotel Performance Taj and the Orchid Hotel with 100 keys in 2014, there will be
3,000 62% pressure on average rates. A Peppermint Hotel is slated for a
2015 opening with an inventory of 90 keys. This market will
ADR/RevPAR (in INR)
2,500 61%
see conversion of demand from the unorganised sector to the
2,000 60%
@

!""
!
@
@/

"

AOR
1,500 59% the medium term onwards.

1,000 58%
500 57%
0 56% Overshadowed by Mumbai and Pune, this

2011 2012 2013
ADR RevPAR AOR
|""

/

infrastructure and, consequently, hotel
development.
During 2013, Nagpur had 1,809 keys on offer, with 1,108
occupied. While there was no increase in inventory, demand grew
#"
=/

by 2.6% from 2012.
ADR - INR 2,893
2,000
AOR - 62%
RNA/RNS Per Day
1,600
1,200
800
400
0
2011 2012 2013
OUTLOOK
["

/

"

"
"@
region is the 4,025 ha. MIHAN Multi-modal International

cargo Hub and Airport. This is being developed around the Dr.
Babasaheb Ambedkar International Airport. The government of
Maharashtra has developed a special purpose entity - Maharashtra
Airport Development Corporation (MADC) for development
of MIHAN. The main aim of the project is to take advantage of
central position of Nagpur and develop the present airport into
a major cargo hub with integrated road and rail connectivity.
|'{#

"

/
!
"

/
X

|'
@

The development of MIHAN is expected to kick start further
51
MAY 2014
THIRUVANANTHAPURAM INVENTORY
The organised hotel sector has a total inventory of 2,200 keys,
OVERVIEW
spread across 27 hotels. Thiruvananthapuram like most other
Thiruvananthapuram is the capital of Kerala, and its most Tier 2 cities is predominantly a budget hotel market with the
populous city. segment constituting upto 45% of the total existing inventory. This
is followed by midscale hotels with 31% of the inventory whereas
Thiruvananthapuram has witnessed a reasonable amount of upper upscale and luxury segment of hotels comprise of 12%

"

"
[[?
/
of the total inventory. Kovalam, a popular tourist destination of
textiles, automobiles, industrial, biotechnology and government the region is a short distance of 10 km from the city centre, and
sectors. could be considered part of the larger market. The Leela Kovalam
with 183 keys is the single largest inventory in the region whilst
The city contributes towards 80% of the software exports from Vivanta by Taj, Thiruvananthapuram with an inventory of 137 keys
the state and is considered the best tier 2 city in the country with is the largest city hotel.
respect to IT/ITeS infrastructure. The Technopark spread over

"
/

"
=

"
country.
12%
Thiruvananthapuram and Kochi have emerged as the ports
of entry for visitors to Kerala, especially over the last decade. 12%
Thiruvananthapuram is also an important education centre 45%

with various engineering colleges, medical colleges, ayurveda,
homeopathy and law colleges in the city.
Thiruvananthapuram is well connected by state and national 31%

highways, railways and airways. The city with its robust public Budget Midscale Upper Upscale Luxury
transportation system is connected on the NH66 connecting Source: Cushman & Wakefield Hospitality
from Panvel to Kanyakumari. The city is also a major stop and
terminus on the Indian Railway network.
["

[""
!

"
/

8%
international airports, and is today, the 10th busiest in the country. 9%
Arrivals at this airport have grown y-o-y at 8% from 2008-09 35%
to 2012-13. The airport received a total of 2.84 mn arrivals for
the year 2012-13, with 65% of the arrivals being international 12%
travellers while the remaining 35% constituted of domestic

passengers. The high rate of international travel can be attributed
to the city being one of the major international airports in the 35%
region and also the high ratio of NRI population of the state.
Air Passengers
3.0
The 134-key Muthoot Plaza was rebranded as Hilton Garden Inn
2.5 in 2013 marking the entry of a major international brand in the
2.0 market. Hycinth by Sparsa, with 104 keys, was the other hotel to
in mn
commence operations in 2013. Thiruvananthapuram is expected

1.5
to see addition of approximately 400 keys in the branded segment
1.0 over the next three years, with hotels like Courtyard by Marriott,
0.5

+=/
@

@
0
and midscale hotels are expected to have equal proportion of
2008-09 2009-10 2010-11 2011-12 2012-13 inventory in the city with 35%.
52
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
Quick Review Almanac 2013: Supply-Demand Dynamics

2,000
The AOR of Trivandrum grew by 1% y-o-y and was 63% in
RNA/RNS Per Day

2012 1,600
The ADR for the city during 2012 was INR 4,140, having 1,200
grown by 9% over 2011 800
400
HOTEL PERFORMANCE
0
2011 2012 2013
Hotels in Thiruvananthapuram are driven by both leisure and
business demand. It is the state capital and a major administrative Source: Cushman & Wakefield Hospitality
and commerce centre in the state. The city also gets a fair share
of the transit demand.
OUTLOOK
The AOR for the city increased from 62% in 2011 to 65% in 2013. The city is undergoing various infrastructural development
The market wide ADR for the organised segment in Trivandrum
=

also witnessed a marginal growth of 4% from INR 4,140 in 2012 the strain on the transport infrastructure. Work is in progress
to INR 4,309 in 2013. Correspondingly, RevPAR for 2013 was INR on the Deep Water Container Transhipment Port at Vizhinjam,
2,784 compared to INR 2,627 for 2012 witnessing a 6% growth. which once completed later this year is expected to be a
key competitor in the ports business. The proposed Phase IV
Hotel Performance expansion of Technopark involves developing an additional 450
5,000 65% acres as Technocity. The proposed expansion of the Airport with
65% the easing of Visa-On-Arrival facility is also expected to provide
ADR/RevPAR (in INR)
4,000 64% impetus to the tourism and therefore, hospitality industry in the
64% city.
3,000
63%
AOR
63%
2,000 The city will continue to receive its fair share of tourist demand,
62%
62%
and we anticipate that this market will further consolidate.
1,000
61%
0 61%
2011 2012 2013
ADR RevPAR AOR
Compared to Kochi, Thiruvananthapuram
receives a lower share of tourism demand. That
SUPPLY-DEMAND DYNAMICS said, the citys economic potential will cause
In 2013, Thiruvananthapuram offered 1,837 keys for sale (growing further development of the hotel market here.
6.1% from 2012); while the RNS was 1,185, which was also an
increase (8.3%) from 2012. The three year pattern of Supply-
Demand Dynamics shows the buoyancy of the market, and its
#"
=/

capacity to absorb new supply at reasonable prices.
ADR - INR 4,396
AOR - 59%
53
MAY 2014
VADODARA The supply pipeline includes about 930 keys. This would change
"

"
$
/

@

OVERVIEW midscale hotels 16% upper upscale hotels and 12% upscale hotels.
Few brands that have projects under development in the city are
Vadodara is the third largest city in Gujarat, and has traditionally
Grand Mercure, Courtyard by Marriott, Four Points by Sheraton.
been an important centre of administration and politics from the
A hotel with a mega international convention centre is also under
pre-independence days.
planning by Gujarat Tourism Project Development Company Ltd.
(GPTDCL).
Vadodara has various industrial clusters across the district -
chemicals & fertilizers, pharmaceuticals, biotechnology, cotton
[$
"

@
/"

dairy. Manufacturing plants of several private industry players 10%
(General Motors, Siemens, ABB, Panasonic, Philips, L&T) as well as
public companies such as Gujarat Alkalis & Chemicals Ltd. (GACL)
and Gujarat State Fertilizers & Chemicals Ltd. (GSFC) are located
51%
here.
39%
The city welcomed 676,090 air passengers at its domestic airport
at Harni, in FY 2012-13. The number of passengers grew at 1%,
during FY 2012-13, in comparison to the growth of 12% in FY
2011-12. The trend in arrivals shows a healthy growth rate over Budget Midscale Upscale

/

Vadodara has robust connectivity with other cities via rail and Inventory Composition 2018
road too, forming two major transport modes for substantial
number of visitors to the city. Vadodara railway junction is the 16%
busiest junction of Gujarat. The city is connected via NH8 to
Delhi, Gandhinagar, Ahmedabad and Mumbai. Indian National 37%
12%
Expressway1 connects Vadodara to Ahmedabad, and further on
expansion will connect to Mumbai.
Air Passengers
35%
0.8
0.6 Source: Cushman & Wakefield Hospitality
in mn
0.4
0.2
Vadodara clocked an ARR of INR 3,750 in 2012, an
0 increase by 6%, over the last year. The AORs also
2008-09 2009-10 2010-11 2011-12 2012-13 witnessed an increase by 4%p to 70% in 2012.
HOTEL PERFORMANCE
INVENTORY Vadodara is primarily a business-oriented destination. Both ADR
Vadodara has 15 hotels with approximately 900 keys in the
'`Q
!

"

"

organised segment. The market is dominated by budget hotels In 2013, the market-wide ADR was INR 3,646, 3% down from
(51%), followed by midscale hotels (39%) and the upscale hotels 2012. The AOR decreased to 68% in 2013 from 70% in 2012. The
(10%). There is no upper upscale or luxury hotel in the city. The RevPAR have decreased by 6% to INR 2,480 market-wide in 2013.
average hotel size is 68 keys. The hotel with the highest inventory
in the city is the WelcomHotel Vadodara with 133 keys, also one The decline in room rates and occupancy levels is perhaps
of the citys oldest. attributable to a market correction with the penetration of hotels
that opened in 2011 gaining momentum.
54
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW

4,000 70% Vadodara is a strong contender amongst Tier 2 cities given
3,500 69% its infrastructural, connectivity, administrative and educational
ADR/RevPAR (in INR)
3,000 68% advantages. We anticipate that the market will continue to

2,500
67%
operate at current levels, and offer a positive outlook.
AOR
2,000
66%
1,500
1,000 65%
500 64% As a hotel market,Vadodara has not performed

0 63%
2011 2012 2013 to its intrinsic potential. This will change with the
ADR
RevPAR AOR
/

"

#"
=/

During 2013, the city had 1,368 keys on offer, of which 936 were
occupied each day. While there was no increase in supply over
2012, there was a reduction in raw demand by about 1.7%, leading
ADR - INR 3,718
to a decrease in occupancy to 68%. AOR - 63%
1,600
1,400
RNA/RNS Per Day
1,200
1,000
800
600
400
200
0
2011 2012 2013
55
LEISURE CITIES
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
AGRA which started operations in 2011, with 141 keys. Overall, Agra
has 33% inventory in the luxury segment, 29% in the midscale
OVERVIEW segment, 26% in budget, 11% in upper upscale segment, and 1% in
the upscale segment.
Agra is the most iconic destination of India, and together with
Delhi and Jaipur comprises the Golden Triangle of Indian tourism.
While the city has its share of trade/commerce related activity,
tourism is the prime economic activity, and hence merits inclusion
as a leisure destination. 33% 26%
As per Uttar Pradesh Tourism Directorate, the volume of tourists

at the Taj Mahal went up from 4.7 mn in 2010 to 5.3 mn in 2011,
an increase by 12%. Till August 2012, the monument had received
3.79 mn tourists. The Archaeological Survey of India reports that 11%
29%
1%
the number of visitors across the Agra circle (which includes
the Agra Fort, Fatehpur Sikri, and Itmad-ud-Daula) rose by
12.8%,y-o-y, to 9.9 mn in 2012. 85% of these were domestic, while
15% were foreign tourists.
The nearest international airport is at Delhi. In order to ease the
pressure on arrivals, the Uttar Pradesh government has approved
(in 2013) the construction of a new airport in Agra. Currently 30% 24%
air access is available at the Air Forces Kheria Base, limiting the
@

"

Road transport is the preferred means of accessing the city and

with the creation of the Yamuna Expressway, access from Delhi 9% 36%
has become even better. 1%

Air Passengers Source: Cushman & Wakefield Hospitality
40
'
"

=

"

"
$
/

30 With the opening of these hotels, the segment mix will change,
in mn
resulting in the midscale segment with 36%, luxury with 30%, 24%
20 with budget segment, 9% to upper upscale segment and 1% to the
upscale segment.
10
0
2008-09 2009-10 2010-11 2011-12 2012-13
Domestic Passengers Foreign Passengers Agra clocked an ARR of INR 5,800 in 2012, a decrease by
Source: Airports Authority of India (AAI) 4%, over the last year. The AORs also witnessed a decrease
by 4%p to 59% in 2012.
INVENTORY
The total number of keys in Agra is approximately 4,700, HOTEL PERFORMANCE
with 54.7% belonging to the organised segment. The average Hotel performance in the city has been a function of accessibility
inventory in the city is 89 keys per hotel. Jaypee Palace Hotel and from Delhi, as well as the organised travel trade plans for tour
Convention Centre has the largest inventory in Agra, with 341 circuits. Increasingly, Agra has become a days excursion from
keys. Delhi, severely impacting the hotel industry. This has exacerbated
after the commissioning of the Yamuna Expressway and the
There were no new additions in the city during 2012 and 2013. introduction of a Shatabdi Express between Agra and Jaipur
The last branded hotel to open in the city was The Radisson Blu, recently. Agra receives more leisure visitors than business visitors.
57
MAY 2014
The city hotels, market-wide, witnessed an ADR of INR 5,634, a prime attractions to everyone (both domestic and international),
3% decrease in 2013 over 2012. The AOR decreased to 53% in there are no activities at these or related sites to keep visitors
2013 from 59% in 2012. Resultantly, the RevPAR reduced by 13% involved (this is a result of Indian rules and policy). In addition, the
to INR 2,960 in 2013 over 2012. State or the tourist trade have not developed other activities to
keep a visitor in the city for at least a night.
The decline in room rates and occupancy levels is a result
of increasing number of excursionists rather than overnight At the same time, this is a market that is a must-have for any
visitors. Improved infrastructure in the case of Agra has reduced hotel chain that wants to specialise in the leisure segment. This
the viability of the tourist economy here, with more visitors has resulted in the creation of high-end hotels, each with a niche
preferring a day trip. The tourist trade and government have also positioning, competing in a shrinking pie. That said, we believe that
not stepped in to create other activities in the area that could the market is important as a benchmark of what can be done
hold visitors for at least a nights stay. to the tourism market. The current and incoming operators /
developers, we believe recognise this potential, and will perhaps
Hotels therefore have extensive weekend packages and also cause a turn-around of the situation in the medium to long term.
offer a number of meetings-related activities, which have become Our outlook, however, remains negative, at least for the next year.
increasingly important.
Hotel Performance
The performance of Agras hotels is inextricably
7,000 64%
6,000 62% linked to the Taj Mahal, and unless drastic changes
ADR/RevPAR (in INR)
60%
5,000
58%
are made to the tourism product, this poor run
4,000 56% will continue.
AOR
3,000 54%
52%
2,000
50%
1,000 48%
#"
=/

0 46%

2011 2012 2013
ADR - INR 5,747
ADR RevPAR AOR
AOR - 48%
During 2013, Agra had 2,575 keys on offer, with around 1,352
sold per day. RNS has declined 10% from 2012. Supply has not
increased in the city in the last three years.
3,000
RNA/RNS Per Day
2,500
2,000
1,500
1,000
500
0
2011 2012 2013
OUTLOOK
Agra is a curious case amongst Indian hotel markets, given its
dependence on the World Heritage Sites of the Taj Mahal, the Fort
and Fatehpur Sikri. While these ASI protected monuments are
58
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
GOA INVENTORY
The state has 9,800 keys in total, out of which, 68% belong to the
OVERVIEW
organised segment. Currently, the state has 54% inventory in the
Goa is as iconic as the Taj Mahal in the Indian tourism product budget segment, followed by midscale with 16%, upscale with 15%,
representing the two foci. At the same time, Goa has been rated luxury with 8% and upper upscale with 7%. The average inventory
the best state for investment environment and infrastructure in the city per hotel is 90 keys. The largest hotel in the city is the
among smaller states by Indicus Analytics. While the State has Grand Hyatt with 314 keys.
encouraged non-tourism activities, it has had mixed success.
Inventory Composition
The natural resources of the State (Coal, water), combined with
infrastructure (Mormugao Port, the Konkan Railway, NH 17, etc), 8%
make it a primary destination for investment however, the 7%
availability of land, environmental laws have resulted in these not

being exploited enough. 15%
54%
Goa is one of the most developed hotel markets as well, given
the product mix available. Goa is well connected to metropolitan
cities and centres of trade and commerce through road, rail, and 16%
sea-routes as well as by air. During FY 2012-13, air passengers Budget Midscale Upscale Upper Upscale Luxury
to Goa were 1.7 mn, a growth of 0.6%, y-o-y. Of the total, 81.5% Source: Cushman & Wakefield Hospitality
were domestic and 18.5% were foreign.
Goa is one of the destinations in the country that have regular Inventory Composition 2018
charter operations. The total number of arrivals that visited Goa
14%

"
"

*
!

"
["

@

7%
42%
*
!
@

* *
!"
"

@

"
!
@

'
/
" !

"

primarily a naval one, with restrictions on arrivals and departure 13%
slots.
During 2012-13, the total number of cruise line arrivals in Goa 24%
was 22,233, accounting for a total of 25 vessels during the period. Budget Midscale Upscale Upper Upscale Luxury
The total number of arrivals by cruise liners in Goa had grown by
86%, y-o-y, whilst the total number of vessels grew by 25%, y-o-y.
The only branded opening in 2013 was the Swissotel with 135
keys; however this brand association was terminated within six
Air Passengers
months of opening and it was relaunched as a standalone hotel
4 named North 16.
3 ["

@

"
$
/

!"

in mn
to 3,300 keys. However, with the challenges prevailing in the

2 state regarding hotel development activity and approvals some
projects are likely to be delayed or shelved. Assuming that all the
1
announced projects are completed and operational by 2018, the
0 segment mix will undergo change: with 42% of the total inventory
2008-09 2009-10 2010-11 2011-12 2012-13 in budget, 24% in midscale, 13% in upscale, 14% in luxury and
7% in upper upscale. International brands that are scheduled to
enter the market include W Retreat & Spa, Grand Mercure, The
Fairmont, The Hyatt Place, Holiday Inn, The Four Seasons Golf
Resort, Hard Rock Hotel.
59
MAY 2014
OUTLOOK
Goa is one of the countrys premier leisure destinations, boosted
Goa clocked an ADR of INR 5,550 in 2012, an increase by by the growth in the network of regional low cost carriers. As
8%, over the last year. per the Goa Investment Policy 2013, the government is focusing
on high spending tourists to strengthen the state economy and
Occupancy, however, decreased to 65% in 2012, from 67%,
employment availability. Thus, investment in high-end tourism
a year prior.
products is being promoted.
HOTEL PERFORMANCE We believe that the Goa market will stand its stead, and continue
Hotels across Goa achieved an ADR of INR 5,389 (a 3% decline to be buoyant. New supply will generate new demand, especially
in 2013, over 2012). The AOR increased to 66% in 2013 from in this market.
65% in 2012. Consequently, the RevPAR decreased by 2% to INR
3,557 in 2013, over 2012. The leisure segment accounts for almost
86% of the total demand in Goa, followed by the MICE segment. Goa continues to be an attractive destination, as
The increase in occupancy is a result of increase in tourist
arrivals, with little addition to supply. During the off-season, Goa hotel and tourism products have evolved in the
also reduced taxes to nearly half to attract more tourists, this decades past keeping pace with changing demand.
together with the States promotions as a monsoon destination,
especially to domestic tourists have resulted in additional visitors
in the off-season months.
#"
=/

Hotel Performance
6,000 68%
ADR - INR 5,496
AOR - 63%
ADR/RevPAR (in INR)
5,000 67%
4,000 67%
AOR
3,000 66%
2,000 66%
1,000 65%
0 65%
2011 2012 2013
ADR RevPAR AOR
During 2013, the total number of RNA per day was estimated to
have been 9,729, without any change over previous year, whilst
the total RNS per day was 6,435, growing by 1.1% y-o-y. There
was no new addition in inventory during 2013. The growth rate of
RNS per day led to the corresponding increase in AOR per day, by
1.1%, to 66%.
12,000
RNA/RNS Per Day
10,000
8,000
6,000
4,000
2,000
0
2011 2012 2013
60
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
JAIPUR INVENTORY
During 2013, the total supply in Jaipur was approximately 4,720
OVERVIEW
keys, with an average inventory of 86. The largest hotel in Jaipur
Jaipurs claim to importance date from the Mughal era, and today, is the Marriott Jaipur, with 362 keys. Of the total supply, 29.1%
as the Capital of Rajasthan State, it is one of the most important belongs to the budget segment, 29.8% to the midscale segment,
regional cities in North India. 21.9% to the luxury segment, 12.6% to upscale, and 6.6% to the
upper upscale segment. During 2013 the two hotel additions to
In addition to its administrative and political importance, the city the city include the Ibis Hotel (147 keys) and Radisson Blu (178
developed around the gems & jewellery industry, along with trade keys).
and commerce.
The last decades have also seen the emergence of newer
industries (software, IT/ITeS, etc), taking advantage of the citys 24%
proximity to Delhi/Gurgaon. Major infrastructure projects such as 32%
the Golden Quadrilateral, the Delhi Mumbai Industrial Corridor
(DMIC) have all created linkages with Jaipur.
7%
While the case for Jaipur as a business oriented destination may
be valid, the inclusion of Jaipur in this study is primarily due to its 11%
26%
traditional positioning as one of the nodes of the Golden Triangle
tourism circuit, together with Delhi and Agra. Jaipur has also Budget Midscale Upscale Upper Upscale Luxury

/

! Source: Cushman & Wakefield Hospitality
Jaipur International Airport, in 2012-13, received a total of 1.8 mn

air passengers, of which 87.4% were domestic and 12.6% were Inventory Composition 2018
foreign. Air passengers are only a small share of total visitors,
given the excellent connectivity the city has with both Delhi and 19%
23%
Agra.
Jaipur is connected to major cities such as Delhi and Mumbai via 9%

the NH8, to Agra & Bikaner via NH11 and to Madhya Pradesh via
NH12.
32%
17%
Jaipur has 2 railway stations; Jaipur railway station and Gandhi
Nagar station. Jaipur serves as the headquarters for the North Budget Midscale Upscale Upper Upscale Luxury
Western Railway zone.
By 2018, the total inventory is expected to increase to 7,075. The

Air Passengers
supply addition will change the composition by segment - the
2.0 midscale segment will increase share to 32.3%, budget to 23.3%,
luxury to 19.4%, and upscale to 16.4% and upper upscale to 8.5%.
1.6
in mn
1.2 Quick Review Almanac 2013:
0.8 Jaipur clocked an ARR of INR 5,900 in 2012, an increase

by 8%, over the last year. The AORs also witnessed an
0.4 increase by 2% to 55% in 2012.
2008-09 2009-10 2010-11 2011-12 2012-13
61
MAY 2014
HOTEL PERFORMANCE that the increasing economic importance of the city will be
substantially bolstered by infrastructure projects currently under
During 2013, Jaipur recorded a market wide AOR of 56%, having
implementation.
increased 1%, y-o-y. However, this increase in occupancy came
with a 2% decrease in market wide ADR to INR 5,745. RevPAR
These projects include the International Convention & Golf
during 2013 was estimated at INR 3,220 declined 0.3% y-o-y.
#

=

"
X
"
/
"

"
citys metro railway (connecting Mansarovar to Chandpole, to

The majority of the room night demand for the organised sector
open later in 2014), and the metro line to Sitapura Industrial Area
in Jaipur is accounted for by the leisure segment with 55%,
to be completed by 2017.
followed by the corporate segment with 33%, MICE with 11% and
airlines with 1%.
The upgrade to the National Highway 8 (the Delhi to Jaipur
stretch) is expected to be complete within the year, and increased
Jaipur hosts a variety of cultural festivals, accounting for
and better road connectivity to Delhi and Gurgaon will provide
substantial contribution to room night demand include the Jaipur
Jaipur the opportunity to harness MICE demand, especially in the
Literature Festival held in January and the Jaipur International Film
off-peak months.
Festival during February.
Over the medium to long term, projects such as the Delhi
Hotel Performance Mumbai Industrial Corridor, the model townships along the Delhi
7,000 Jaipur stretch, the development of the NCR (including Alwar
District) all augur well for Jaipur to diversify demand and become
ADR/RevPAR (in INR)
6,000 55%
a better hospitality market.
5,000
50%
AOR
4,000
3,000
45%
2,000
As with Kochi, Jaipur attracts both the leisure
1,000 40% and the business traveller, and this combination of
2011 2012 2013
ADR RevPAR AOR
demand will help create a stable hotel market.
SUPPLY-DEMAND DYNAMICS #"
=/

During 2013, the total RNA per day was estimated at 4,721,
growing by 7.4% y-o-y, whilst the total RNS per day was
ADR - INR 5,860
2,645, growing by 9.6% y-o-y. The growth rate of RNS per day
outstripped the growth rate of RNA per day, leading to a minor
AOR - 52%
increase in the AOR per day, by1%, to 56%.
5,000
RNA/RNS Per Day
4,000
3,000
2,000
1,000
2011 2012 2013
OUTLOOK
From a hospitality perspective, Jaipurs predominant position as
part of the leisure tourism circuit will continue we also believe
62
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
VARANASI Varanasi can perhaps be counted among the must visit

destinations of most Indians, and the cultural history of the city
OVERVIEW also attracts international visitors. This has led to some interest
amongst investors and operators over the last few years. Site
Varanasi is amongst the few cities in the world that can trace
availability has been a major constraint for development, as
occupation for more than 5,000 years. The citys pre-eminence
has been the pricing levels. Our research indicates the fewest
derives from its position in Hindu mysticism as also to its being
additions to supply (less than 400 keys) up to 2018. This will see a
part of the Buddhas life.
minor change in the segment-wise break-up of supply.
While the city thrives on the visitor markets, it has also achieved
a certain level of economic importance in the eastern part of Inventory Composition 2013
Uttar Pradesh. It is a major railway centre, as also a major centre
10%
of small and medium industries bases on agri-produce.Varanasi
is also home to one of Asias largest universities the Benares
Hindu University (BHU).
29% 61%
Lal Bahadur Shastri Airport received, in 2012-13, a total of over
0.8 mn air passengers, of which 91% were domestic and 9% were
foreign. This was an increase of 8.1%, representing a consolidation
of the previous (2011-12) years growth of 34%.
Varanasi is connected to the rest of the country by road via
NH2 and the NH7, facilitating connectivity of major cities such as
Delhi, Agra, Kolkata. Inventory Composition 2018
Varanasi is also an important railway junction, providing direct 12%

connections to most important cities. 30%
Air Passengers
0.8
58%
0.6
in mn

0.4
During 2014,Varanasi is expected to see the addition of Hotel

0.2 U KBJ with 133 keys this hotel will be managed by U Hotels &
2008-09 2009-10 2010-11 2011-12 2012-13
Domestic Passengers Foreign Passengers Resorts, a Thailand-based hotel management company.

INVENTORY
Varanasi hotels have shown an upward trajectory in terms
The citys hospitality industry is dominated by the unorganised
of occupancy. The occupancy rate increased by 3% to 66%
sector. Most of these are in the budget segment, offering the
in 2012 and the ARR increased by 11% to INR 2,628 in
most basic of services and facilities, mostly clustered around
2012.
the principal Ghats, and offer small inventories. There is
limited inventory in the organised segment providing quality
accommodation. HOTEL PERFORMANCE
During 2013,Varanasi recorded a market wide average occupancy
During 2013, the total inventory for Varanasi was approximately
rate of 68%, increasing by 2%, while the average room rate of
1,185 keys, with an average hotel offering 59 keys; the largest
the city was INR 3,110, increasing by 17%, y-o-y. RevPAR during
hotel in Varanasi is currently the Gateway Hotel with 130 keys. Of
2013 was estimated at INR 2,210 having grown 21.8% y-o-y. The
the total supply, 61% belonged to the budget segment, 29% to the
strong occupancy levels can be attributed to smaller quality hotel
midscale segment and 10% to the upscale segment.
inventory, as also to the year-round visitation pattern to the city.
63
MAY 2014
The modest ADR can perhaps be attributed to the nature of provide infrastructural and soft skills development in the region,
demand (dominated by religious visits) as also to the composition making it attractive to high end visitors (both domestic and
of supply (dominated by budget and economy hotels). The most international).
popular months for travel to the city are October- November,
during which a number of festivals take place, particularly Diwali. Our outlook for the destination remains neutral, with the short
term occupancy rate declining due to additions to quality supply.
Hotel Performance
3,500
Amongst the smallest organised markets,

ADR/RevPAR (in INR)
3,000
2,500 Varanasis attraction as a destination will continue

2,000 in a limited manner, given the dynamics of the
1,500
market.
1,000
500
2011 2012 2013
ADR RevPAR AOR #"
=/

ADR - INR 3,170
During 2013, the total number of RNA per day was estimated at
AOR - 62%
1,185, (no growth y-o-y), whilst the total RNS per day was 808,
growing by 2.8% y-o-y. The growth rate in keys sold was higher
than supply increase, leading to a minor increase in the AOR per
day, by 2%, to 68%.
1400
RNA/RNS Per Day
1200
1000
800
600
400
200
2011 2012 2013
OUTLOOK
The performance patterns of the hospitality sector in Varanasi
are like most Indian, domestic leisure markets, highly seasonal,
dominated by budget and economy supply, and smaller hotels.

@
"

/
sell to international visitors, as has been the limited availability of

international quality accommodation.
Commercial and other demand is limited, especially for the

"

=

"
/
over the years. The governments at the State and the Union have
negotiated assistance worth USD 300 mn from the World Bank
for the development of the Buddhist Tourism Circuit as well as
the Braj Circuit Varanasi is part of both. This is expected to
64
KEY SOUTH
ASIAN CITIES
MAY 2014
COLOMBO, SRI LANKA registered hotels in Colombo decreased from 29 (3,188 keys) in
2008 to 20 in 2012.
OVERVIEW
This apparent discrepancy in the statistics could be attributed to
Colombo is the primary city (and de facto capital) of the island
the process of renovations that most hotels underwent in the
nation of Sri Lanka, the administrative capital of the Western

]
"

"

Z

Province and the district capital of the Colombo District.

decreased inventory to enable renovation, and new hotels were
Located on the west coast of the island, it is adjacent to Sri
also commissioned.
Jayewardenepura Kotte - the parliamentary capital of Sri Lanka.
Currently, the average inventory per hotel in the city is 94 keys.
Diverse and vibrant, the city is the economic centre of the The hotel with the highest inventory in the city is Cinnamon
country. The city has various key sectors contributing to its Grand with 501 keys.
economy such as textile & apparel, tourism, infrastructure,
knowledge services sector, gems & jewellery, ceramics, etc. In early 2013, the Ceylon Continental was re-branded as
Kingsbury and opened after an USD18 mn refurbishment. A new
Sri Lanka received over 1.3 mn international visitors in 2013, hotel, The Mirage, opened in October 2013 in Colombo with 60
witnessing a y-o-y increase of 27% over 2012. Colombo handled keys.
all of this international visitation
Approximately, a total of 6,480 keys are in the pipeline and are
India is the main source market among top ten markets for =

"
$
/

`

"
!

!
!"

"

["

about one third is at the planning stage. However, as per our
from India have increased by 18%, over 2012. UK is the second estimates out of the remaining two third, 28% of this proposed
largest contributor, with approximately 11% share of the total inventory is likely to enter the market in 2014, 12% in 2015, 37%
international tourists. in 2016 and & 22% in 2017.
As is anticipated from a tropical destination, the peak visitation Overall, on a segment-wise basis, 44% belongs to the luxury
is recorded between October and March, while the lows are in segment, 25% to the midscale segment, 20% to the upper
April to June. upscale segment and 11% to the upscale segment. In addition to
domestic brands (Jetwings and John Keels), most new supply will
Air Passengers be internationally branded, e.g., Hyatt Regency, Four Points by
1.6 Sheraton, ITC, NEXT hotel, Ozo by Onyx, , Shangri-La, Park Inn
by Radisson and Movenpick.
1.2

in mn
0.8
During 2012, the hotels recorded AORs of 76%, decreasing
0.4 from 84% over the previous year and up from 78% in
2010. The ARR during 2012 was recorded at approximately
0.0
2009 2010 2011 2012 2013
USD 122 having increased by 11% since 2011.
Foreign Passengers
Source: Sri Lanka Tourism Development Authority
HOTEL PERFORMANCE
INVENTORY Principal demand for hotel accommodation in the quality segment
# @
"
@

=

"
"*

/*
is from international arrivals, which grew 27% in 2013. This
categories, spread across 40 hotels as per our research. Of these, " !
!

@

39% of the inventory belongs to the luxury category, while about "
!""

/

!"
19% belong to midscale category, 12% to upscale and 22% to

The market-wide ADR increased by 3% in 2013 to USD 126 over
upper upscale hotels and 8% to budget hotels.
2012. A combination of circumstances has led to a situation where
As against our research, which records 3,900 keys, the Sri quality hotels encounter a rate barrier, where each segment
Lanka Tourism Development Authority (SLTDA) has registered of hotel cannot charge below a set rack rate. The anticipated
3,054 keys in graded establishments in Colombo, spread across demand due to the Commonwealth Heads of Government
20 hotels as of 2012. Between 2008 and 2012, the number of Meeting (CHOGM) did not occur, further exacerbating the rate
situation in the city.
66
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
While there has been an increase in the number of international OUTLOOK

arrivals in the country, demand for accommodation in Colombo
Colombo is the principal city of the country, its gateway and
has declined by 16% between 2011 and 2013. This can perhaps
transit hub, in addition to being the commercial capital, attracting
be attributed to the gradual improvement in the security
business and leisure demand. 2013 saw the commercialisation of
environment in the country, and the opening up of destinations
the Hambantota - Mattala Rajapaksa International Airport, which
other than Colombo, resulting in demand transference from
will result in an easing of airline slot availability into the country,
Colombo to these new hotels and destinations. Thus, the RevPar
augmenting the Bandarnaike International Airport (BIA) which
in the city also declined to USD 89, by 4% in 2013 over previous
was the only functional international airport in Sri Lanka
year.
Colombo has a number of infrastructure developments under
In addition, the government, in an effort to increase sustainability
progress such as the waterfront development (comprising
of the hotel industry, has since 2011, established minimum rack
convention centre), new port city development project over 230
rates for different bands of hotels this has also had an effect in
hectares, Formula 1 race track, casinos and the Colombo South
"
/

"

"

["
"
Harbour Project (to upgrade the facilities of the existing port at

industry has had reservations in adopting these measures, and in
Colombo) etc.
the medium to long term, rate corrections are foreseen, with the
increased supply.
We, therefore, rate the medium to long term performance of
Colombo hotels as positive. In the short term, however, we will
Hotel Performance see pressure on occupancy, while rates will continue to perform
140 90% to par.
120 80%
ADR/RevPAR (in INR)
70%
100
60%
80 50%
AOR
60 40%
While challenged in the short term, Colombos
40
30% hotel market will regroup in the medium to long
20%
20 10% term.
0 0%
2011 2012 2013
ADR RevPAR AOR
#"
=/

SUPPLY-DEMAND DYNAMICS ADR - USD 129

During 2013, the keys available for sale each day was estimated at
3,868, a growth of 1.6% y-o-y, whilst the total keys sold per day
AOR - 54%
was 2,714, reducing by 6% y-o-y.
The new addition during 2013, which accounted for the increase
in RNA per day during 2013, includes the Mirage Hotel (60 keys).
The shrinkage in raw demand resulted in a larger than normal
reduction in occupancy, by 7.5%, to 70%.
5,000
er Day
4,000
3,000
RNA/RNS Pe
2,000
1,000
0
2011 2012 2013

67
MAY 2014
DHAKA, BANGLADESH INVENTORY

A majority of hotel inventory in Dhaka is unorganised. The
OVERVIEW
inventory in Dhaka is dominated by the non branded segment
The largest and capital city of Bangladesh, Dhaka has a population with Westin, Radisson, Best Western and Ascott being the
of 14.3 mn, making it one of the largest cities in the world, as also handful of branded hotels currently operational in the city. Dhaka
amongst its fastest growing. has an inventory of approximately 3,000 keys across various
market segments. The upscale segment has the highest share of
Dhaka is at the centre of activity in the country, and therefore, is inventory with 27% of the inventory closely followed by midscale
"

"
=

"

/

segment with 26%. The budget segment comprises of 21% of
the regional framework can be judged given the presence of most the total inventory followed by upper upscale segment with 16%
major international players, and the continued interest shown by $

!"

"

["
+
+/
existing and new players. Sonargaon Hotel, with an inventory of 277 keys is the largest
hotel in the city while the average number of keys per hotel in
Dhaka has undergone large scale modernisation of transport and Dhaka is 85 keys.
communication infrastructure, and as a result has been attracting
a substantial amount of foreign investment in the city. Political unrest and uncertainty in the country has resulted in a
sluggish rate of development and the city did not see any branded
Dhaka is home to the only major convention centre in the hotels opening in the year 2013. However Dhaka has over 2,500
country, the Bangabandhu International Conference Centre keys under development, which are expected to enter the market
(BICC), which spreads over a total of 50,000 sq. m. in the next four years. Four points by Sheraton with 139 keys,
slated for opening in June 2014, and Le Meridien Dhaka with 304
Dhaka is the main port of entry for visitors coming into the =
"

!
@
"
/

country. It is well connected to India, the Middle East and South open. 2015 is expected to witness the opening of Novotel Dhaka,

'
!"

"

"
and the Hilton Dhaka while Movenpick Hotel, Sheraton Dhaka,
city daily. and another Best Western Hotel are slated for a 2016 opening.
The JW Marriott and the Hyatt Regency are expected to open in
As compared to the total arrivals of ~0.40 mn in 2012, the city 2017 and 2018 respectively.
welcomed and equal number in 2013,
Tourism is one of the major currency earners for Bangladesh. Quick Review Almanac 2013:
The major tourist attractions in Dhaka are the beaches, historic Hotels in Dhaka registered ADR and AOR of USD 80 and
monuments with the history of the city dating back as long as the 75%, respectively, during 2012.
16th century, picnic spots, wildlife, its cultures and tribes. Dhaka
acts as the transit point for visitors travelling to Chittagong, The AOR increased by 3% over 2011, while the ARR held
Rajshahi, Sylheti, Khulna, Rangpur etc. Some domestic visitors also steady with minimal change.
use the Sadarghat Port located on the banks of Buriganga river to Branded hotels in Dhaka recorded ADR and AOR of USD
reach Dhaka. People travelling from India can avail the services of 220 and 80% respectively, during peak season in 2012.
the special international train running from Kolkata to Dhaka.
Air Passengers HOTEL PERFORMANCE

Hotels in Dhaka recorded a marginal growth in ADR during
0.4 2013 to achieve a market wide ADR of USD 82 (3% over 2012s
performance of USD 80).
0.3
in mn
0.2 The AOR however recorded a drop of 10% reaching 67% as

compared to 75% for 2012. The corresponding RevPAR for the
0.1 market was USD 55 for 2013, recording a 9% drop over 2012.
0.0
2009 2010 2011 2012 2013 The drop in occupancy rates in Dhaka can be attributed to the
Arrivals countrys restive political situation, uncertainty and standoff over
Source: Huzrat Shahjalal International Airport elections.
68
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
["
/
@
"

"

!"

Over 2,500 keys being added to the branded inventory over the
keys noted an ADR of USD 133 with an AOR of 72%, for 2013 next few years are likely to impact the dynamics of the hospitality
while the RevPAR for the same period was recorded at USD 97. industry positively, leading it to be more organised. The 700 key
JW Marriott Dhaka, scheduled to open in 2017 would be the
Hotel Performance largest hotel project in the region thus far
90 77%
80 76%
Our outlook for the city remains neutral to positive.
ADR/RevPAR (in USD)
70 75%
60 74%
50
AOR
73%
40
72% {"=
"
@

/
"
=
!"
30
20 71% limited branded supply. The supply pipeline is
10 70%
0 69% /

!

@

"
2011 2012 2013
ADR RevPAR AOR

#"
=/

SUPPLY-DEMAND DYNAMICS ADR - USD 83

During 2013, the total number of RNA per day in Dhaka was
AOR - 60%
estimated to have been 2,793, remaining unchanged for the last
two years with no branded inventory entering the market. The
total number of RNS per day for 2013 was1,883, recording a
decline of 10.1%, y-o-y, with respect to 2012.
3,000
RNS/RNA Per Day
2,500
2,000
1,500
1,000
500
0
2011 2012 2013

OUTLOOK
The economic opportunities presented by Bangladesh will
continue to drive investment in the country, and this is anticipated
to receive a boost with the election of a new government.
Dhakas primacy in the country will continue to make the city
a favoured destination for investment and activity, cementing
the need for accommodation in the city. As with all developing
markets, Dhakas supply will morph, and the interest shown by
international operators is ensuring that this change is receiving
adequate impetus.
Several infrastructure projects (including a study for a new

international airport terminal, the ASEAN highway, etc.) are
underway, as is an overhaul of legislation (in the wake of the
negative events in 2013), which augur well.
69
MAY 2014
KATHMANDU, NEPAL There are no new additions in the other categories except tourist
standard hotels (457 hotels) with 10.9% increase in 2013 over
OVERVIEW 2012, as tourist spending has dropped considerably to as low as
USD 36 over the last decade and process of registration of hotels
Kathmandu, the capital city of Nepal, is located in the Kathmandu
has become easier as per new revised policy.
valley, together with Patan and Bhaktapur.
As per our research, out of the Kathmandus total organised
Kathmandu has proved to be an important tourist market, given
supply of 2,840 keys, 35% belong to upscale category, 25% to
its locations amidst the Himalayas, as well as its commercial and
upper upscale, and 20% to budget and midscale each. The average
political importance.
inventory in Kathmandu is 113 keys per hotel in the organised
segment. The largest inventory is of Crowne Plaza Hotel with 282
Foreign Direct Investment (FDI) into the country increased
keys. The international hotel brands present in Kathmandu are
four times in 2012-13 and tourism sector was the third highest
Crowne Plaza, Radisson and Hyatt Regency. There were a few new
recipient. Nepal is one of the few countries that permit100% FDI
hotel projects that were announced in 2013 - Sheraton Hotel,

"
'
+/

!"

=

@
X

/
@
|
!"
X
keys, to open by 2016. There is an upscale hotel that is proposed

Tourists can enter Nepal via two modes, land and air. As per latest
to be developed on BOOT mode by Civil Aviation Authority of
(by 2013 year end) data by Nepal Tourism Board, in total, 0.8 mn
Nepal (CAAN).
of tourists visited the country in 2012.
Tribhuvan International Airport is the only international airport Quick Review Almanac 2013:
in Nepal, located in Kathmandu city. The tourist arrivals via air
were 598,258, up by 10%, y-o-y, and via land were 204,834, up by During 2012, the hotels recorded AOR of 63%, sustaining a
7% y-o-y in 2012. pattern of decrease from 2010 at 66%.
The ADR during 2012 was recorded at approximately
India contributed to 28% of the total arrivals, up by 15.6% than USD 120 having increased by 4% since 2011
"

!
"
/
"

!

3.9%, in arrivals, with a total of 0.28 mn only in comparison to

that of 2012. The National Tourism Board Statistics show that it HOTEL PERFORMANCE
was primarily because of 19% drop in tourists from South Asia The ADR in the organised segment witnessed a decrease by 2% in
and about 21% drop in arrivals from India, which is Nepals biggest 2013 over 2012. The AOR decreased from 63% in 2012 to 61% in
tourist feeder market. Overall, the total visitors by air witnessed 2013, in continuation to the decrease from 65% in 2011. The ADR
drop by 1.9% to 586,668 in 2013. stands at USD 117 and the AOR at 61% for the year 2013.
Tourist Arrivals This is a consequence of a number of factors such as European

0.8 Commissions ban on Nepal airlines due to concerns on safety,
the strikes held by political parties at the time of constituent
0.6 @

"
using Kathmandu runway as it is sensitive to damage. The tourist

in mn
0.4 spending per day has reduced to USD 35.6 in 2012 from USD
79.1 in 2003, following the reduction of the high net worth
0.2 traveller moving away from this niche market.
0.0 Hotel Performance

2009 2010 2011 2012
By Air By Land
140 66%
Source: Nepal Tourism Board
ADR/RevPAR (in USD)
120 65%
100 64%
INVENTORY
80 63%
AOR
As per Nepal Tourism Board, the city had 11,600 keys spread 60 62%
across various categories of 550 hotels in Kathmandu. The tourist 40 61%
standard hotels lead in inventory, with 65% contribution. Five star 20 60%
hotels comprise 13% of the total inventory, with two star hotels 59%
0
contributing about 10%, followed by three star and with 5% each 2011 2012 2013
and four star with 2% to the total inventory. ADR RevPAR AOR
70
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
SUPPLY-DEMAND DYNAMICS junctions and relaxed formalities at the border at custom points.

=

@/

"

During 2013, the total number of RNA per day was 2,837,
facility to about 180 countries by India this year considering
without any change in the last three years, whilst the total RNS
its proximity. The eased out hotel registration process is also
per day at 1,744, decreased 2.4% y-o-y. The reduction in RNS per
constructive in building demand holding capacity in the state. It
day led to corresponding decrease in the AOR per day to 61%.
has an estimated a target of receiving 2 mn tourist arrivals by
the year 2020. The drop in the tourist spending is indicating that
Supply-Demand Dynamics Nepal is being witnessed as a cheap travel destination. Nepal has
cut costs of climbing to Mount Everest to almost half in 2014
3,000 to attract more mountaineering and adventure tourists. Thus,
RNA/RNS Per Day
2,500 tourists are further likely to go up.

2,000
1,500
1,000
500 Kathmandu has seen a severe erosion in hotel
0
2011 2012 2013 performance in the last few years, but the
RNA per day RNS per day prognosis is positive given recent events and
Source: Cushman & Wakefield Hospitality decisions made by the Government.
OUTLOOK
The Nepal Tourism Board and MoCTCA are aware of the reasons #"
=/

behind the drop in tourist arrivals and are taking action to

"
/

"

["

ADR - USD 120

governments have also proposed measures to increase bilateral
AOR - 63%
tourism investment and co-operation. This will facilitate over land
travel by tourists, create no hassles transport movement at major
71
MAY 2014
MAL, MALDIVES INVENTORY

The tourism authorities in the country measure inventory in
OVERVIEW

@
"
"
=

/

The Maldives remain one of the most sought after tourist from standard industry practice. The tropical destination had
destinations in the world and a popular honeymoon destination 23,350 operational beds in 2013 as compared to 22,065 in 2012.
with its pristine beaches, scenic beauty and exquisite ecosystem. The majority of hotel inventory in Maldives is in the upscale and
The capital, Mal, acts as the entry and transit point to the luxury segment, which is also supported by the popular one
archipelago for the visitors travelling to other far off islands in island - one resort concept in the region. This has enabled it to
Maldives. maintain high ADRs and RevPARs over the years and also makes it
one of the most expensive holiday destinations in the region. The
Tourism as an activity contributes 70% of the countrys GDP and Paradise Island Resort and Spa with 334 keys is the single largest
60% of its foreign exchange receipts. Such an overdependence inventory in Mal while the average number of keys per hotel in
on one industry has raised concerns in the government, which is the city is 143 keys.
currently evaluating means of rectifying this.
Some projects slated to become operational in 2013 were
Economic challenges were perhaps a root cause for the coup that delayed and have been pushed to 2014. The sluggish pace

"
^
/

+

'
of development in 2013 can be attributed to the political
series of political manoeuvres through the year 2013 have since uncertainty in the country. The country has over 6,000 keys under
calmed the situation with the announcement of Abdulla Yameen development which are likely to enter the market within the next

+
["

"
"
three years. Among these, there are a considerable number of
parliamentary elections are due in 2014.

"
@

/
"

attract the price sensitive tourists who cannot afford the luxury
Maldives reached its landmark target of 1 mn tourist arrivals in beach resorts with private beaches and private islands.
a calendar year in November 2013. This is remarkable, given that
the second half of 2012 saw a sharp decline in arrivals following
the political unrest in the archipelago.
Maldives registered an ARR of USD 594 and AOR of 74%
Asians at 47% of arrivals, especially the Chinese, are now in 2012, a rise of 4% over 2011
supplanting Europeans, whose share has declined to 46% from
52% even in 2012. This is perhaps due to the increasing familiarity Maldives received a total 958,027 tourists in 2012, a rise of
with the product, aspirational issues in the source markets, as also 3% over 2011
a result of the uncertainty being seen negatively in the western
=
"
!"
"

HOTEL PERFORMANCE
Mal witnesses the highest tourist activity (hotels, arrivals,
Tourist Arrivals
economy) in the island nation of Maldives, given that the city is
1.2 the gateway into the country. Given this background, it has been
1.0
easy for hotels in Mal to maintain one of the highest ADRs in the
region.
0.8
in mn
0.6
The political unrest in the country does not seem to have had
0.4 much impact on demand for quality accommodation. The city
0.2 managed an ADR growth of 4% over 2012 and recorded an ADR
0.0 of USD 619 for 2013 while the market wide AOR also recorded
2009 2010 2011 2012 2013
a 3% growth over the previous year and was noted at 76% for
Arrivals
Source: Ministry of Tourism, Maldives
2013. The corresponding RevPAR for Male was recorded at USD
470 for 2013 as compared to USD 452 for 2012. The hotels in
Maldives recorded a marginal dip in the average length of stay at
6.4 days for 2013 as compared to 7 days in 2011.
72
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW

700 77% "
"

|

"
600 country is expected to register a GDP growth rate of 5.5% for

ADR/RevPAR (in USD)
500 75% 2014. Tourism and related activities are expected to remain the
400 largest contributor to the countrys GDP growth. The luxury
AOR
300
73% island destination is pegged to stabilize for the year 2014 with the
political scenario in the country getting clarity post the elections.
200
71% With the development of more affordable hotels in Maldives, the
100
tourist arrivals are expected to further increase by attracting the
0 69%
2011 2012 2013 budget sensitive travellers.
ADR RevPAR AOR
SUPPLY-DEMAND DYNAMICS The Maldives is perhaps the most organised hotel

There have been no additions to quality supply since 2011 the market in the region, and the results show. The
total keys available for sale were 6,736. The total number of RNS economys dependence on tourism will ensure
per day for 2013 was 5,119, growing by 2.7%, y-o-y. "
"

!

"
8,000 #"
=/

RNS/RNA Per Day

7,000
6,000 ADR - USD 631
5,000
4,000
3,000
AOR - 63%
2,000
1,000
0
2011 2012 2013
73
MAY 2014
THIMPHU, BHUTAN INVENTORY

Thimphu has a total inventory of 470 keys; the average inventory
OVERVIEW
per hotel is 33, with the largest hotel being the Taj Tashi with 66
Thimphu is the centre for commerce, religion and administration keys. The supply is dominated by the budget segment comprising
for the country of Bhutan. The city like the country is relatively 86% of the total inventory. There has not been any new addition
land locked. Accessibility & connectivity to Thimphu remains fairly of inventory for a few years now. Currently, Thimphu has one
limited, primarily due to the topographical challenge. The closest hotel under development, the proposed Le Meridien; which is
airport is located in Paro (50 km away). expected to be operational by 2015.
Visitation to Bhutan is primarily leisure, because of the cultural

attractions the country exhibits. In fact, the country is often
perceived as a Cultural Destination. During 2012, the hotels recorded AORs of 41%, increasing
by 2%over the previous year and 5% since 2010. The ARR
Citing the growth in the IT/ITeS sector, the government had made during 2012 was recorded at approximately USD 145
some recent developments towards becoming more IT focused having increased by 3% since 2011 and 4% since 2010.
!"
"

/
[
+=
["
_

@

[

$*

["
/
phase of the project became operational during 2012 and features HOTEL PERFORMANCE
of 50,000 sq. ft of IT space and data centre.
The market wide occupancy performance for the city, during
A total 41,545 people visited Thimphu in 2012, an increase of 2013, was approximately 41%, increasing 3% y-o-y, whilst the
18% over 2011. Thimphu welcomes approximately 25% of the market wide ADR was USD 142, declining by 2%, y-o-y. The
total visitor arrivals in the country, making it the second most rather high ADR is on account the presence of the Taj Tashi,

+
["

$
!

barring the property the Market wide ADR for the city is USD 82.
during autumn (August-October) and spring (February-April). The RevPAR during 2013 was estimated at USD 60, having increased
majority of travellers visiting Thimphu are from the United States 3.5% y-o-y.
of America, Japan, China and the United Kingdom. Additionally,
"
'

@

"
"

Thimphu is a leisure destination, with the segment absorbing 85%
Paro International Airport. of total room night demand during the year, 10% by MICE and 5%
by Corporate.
Road trips to Bhutan have become extremely popular over the
years. India-Nepal-Bhutan is becoming a popular road circuit, During 2013, Thimphu was the venue for some major SAARC
!"

[@

"

["

/
events such as 12th SAARCLAW Annual Conference, the 9th
numbers of the visitors via road yet, however, this is an emerging SAARC Chief Justices Conference (24th 26th May), 13th SAARC
travel trend in the region. Payments Council meeting (29th July 2013), SAARC-CCI (Chamber
of Commerce and Industry) Capacity Building Workshop (28th
November) and SAARC Literary Festival (18th-31st December)
Tourist Arrivals
etc.
0.04
Hotel Performance
0.03
160 44%
in mn
ADR/RevPAR (in USD)
0.02 140 43%

120 42%
0.01 100 41%
80 40%
0.00
2011 2012 2013 60 39%
Arrivals
40 38%
Source: National Statistics Burea - Bhutan
20 37%
2011 2012 2013
ADR RevPAR AOR
74
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
SUPPLY-DEMAND DYNAMICS OUTLOOK

During 2013, the total number of RNA per day was 467, having Connectivity and accessibility are the primary deterrents to low
witnessed no growth y-o-y, whilst the total RNS per Day was

"

202, growing by 6.6% y-o-y. The growth rate of RNS per day levels. Paro Airport remains the only international airport in
outstripped the growth rate of RNA per day, leading to a minor the country and lies 50 km outside the capital. In 2008, the
increase in the AOR per day, by 2%, to 43%. government of India in collaboration with the government of
Bhutan was to develop a railway link between the countries,
Supply-Demand Dynamics connecting Hashimara in West Bengal to Toribari in Bhutan. The
project, however, has been delayed. By May 2014, Drukair - the
500 national carrier for the country, is expected to provide a new
RNA/RNS Per Day
route from Mumbai in India. Flights are expected to operate twice

400
a week.
300
200
An International Convention Centre spanning across 6.5 acres is
being planned in the city and is currently under construction.
100
2011 2012 2013 {

[""

$

"

!
/

RNA per day RNS per day such as 14th Congress of the International Society of Ethnology
Source: Cushman & Wakefield Hospitality (1st 7th June 2014), 1st International Conference on Engineering,
Science, Technology, Education and History (21st 22nd August
2014).
Thimpu has been careful in managing carrying #"
=/

capacity, given strategic and environmental
concerns. The graded opening of the destination
ADR - USD 145
will ensure that Thimpu, while retaining its AOR - 44%
mystique, will also grow as a hotel market.
75
HOTEL CONSTRUCTION
COST ANALYSIS
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
["
/

"

"
=

"
HOTEL CONSTRUCTION COST development cycle is a result of the non-standardized

ANALYSIS approval processes (for sanction of plans, construction and
for other service related issues), and the fact that almost all
This section presents a snapshot of the construction costs of these clearances have to be obtained at the bottom of the
involved in developing hotels in India. The information has been administrative mechanism, at the municipal level, rather than state
collated through international and domestic hotel operators and or federal. A recent World Bank report, for instance places India
developers. The context of this analysis has been the relative at a rank of 182 (amongst 189) countries for ease of obtaining
underperformance of the industry in India restrained growth, permissions, for even those industries that have a clear-cut policy
/

*@

@

* direction. In the case of hospitality projects, permissions have to
/
be obtained at all levels of bureaucracy and from a number of
authorities. At last count, a typical hotel needed over 80 licences
The Indian hospitality industry has faced several hurdles from a or permissions from conception to opening.
development perspective. These include systemic issues such as
the global economic slowdown, regulatory issues such as the fact Adding to the sectors woes is the depreciation in the rupee
that licences and permissions are handled at the local authority
'
/

"

/

"

" "

@
accounted for by imports, pushing up these costs, resulting in an
and equity funding, and others. escalation of up to 30% in some cases.
Development of hotels at the top of a performance cycle has also #/ Construction Period (No. of Years)
exacerbated matters, as these hotels invariably open during the Budget 2
downturn. This results in poorer performance than anticipated, Midscale 3
raising development risks considerably. That said, the opportunity
Upscale 3.5
for hotel development in India is large, given that the top 20
Upper Upscale 3.5-4
destinations account for only about 110,000 keys in the organised
sector. For a country that has close to 50 towns and cities with a Luxury 5
population of over 1 million, this number is very small.
Note: The construction period as discussed above is only for
C&W collated construction costs achieved by branded hotels </
_
that opened in the country in 2013. Our sample includes brands
across four levels of positioning viz. budget, midscale, upscale and Cost escalations have also occurred in building and construction
luxury. The table below shows the approximate per room cost of material cost, in addition to other direct input costs (equipment,
developing hotels in India. This per room cost excludes land and plant, machinery, etc.). Labour availability and increased costs
Interest During Construction (IDC). thereof are also key concerns All of these have resulted in
increased cost of development.
Cost per key Budget Midscale Upscale Luxury
(INR mn) Scarcity of suitable parcels of land (in terms of location, size, and
Urban 1.5-3.5 5-6.5 8-10 15-20 clearances) in most urban centres across the country led to a
steep increase in the cost of land. Developers and owners have
Resort - 5-6.5 8-10 15-20
increasingly considered alternate methods of making investments
Service Apartment - 4-6 - 8.5-10
in hotels viable, and the resultant profusion of mixed-use
FF&E Cost 2-2.5 3-3.5 3.5-4 4-4.5 developments is witness to that.
Pre Opening Cost 0.05-0.1 0.1-0.15 0.15-0.2 0.3-0.4
In light of the existing market conditions, developers and hotel
companies are looking at various models to expand and establish
Typically, green
/
" take up to 5 years to be developed, business. Branded residences, integrated developments, mixed-use
with luxury hotels taking the longest. Depending on the sites township projects with a focus on food & beverage, recreation
suitability and the ease of obtaining permissions, a budget hotel are a few of the business models being looked at in Tier 1 cities as
could potentially be developed in 24 months. well as some Tier 2 cities. Combining usage patterns as described
77
MAY 2014
provides relief for capital intensive hotel developments by

diversifying product mix, thereby reducing development risks.
{

/
_
remains challenging, given little change in

At the same time, over the past few years, operational and regulatory conditions and high land pricing.
/"
"
"
@
@

"

["

"
@ "
@ !/

investors easier entry into markets, by reducing the time taken to

entry, albeit at a higher cost. operational hotel transactions also marks the
growing maturing of the investor community.
78
TRENDSPOTTING: BRANDED
RESIDENCES
MAY 2014
"

=

"

/
TRENDSPOTTING: BRANDED price points.

RESIDENCES
A lot depends on the brand that has rendered its name to the
By Yvette Costi, yoo development that tags with it a superior quality and reliability. Out

!""
"

/

=
The concept of Branded Residences is not very new. The genesis
of the concept dates back, vaguely, to 1920s, when New Yorks

Sherry Netherlands Hotel offered private residences. The concept

{
has only evolved thereafter. Considering the constant time crunch
with most people today, the emphasis is on the services and
[
facilities being provided by these residences, in addition to the
brand promise and its value proposition. A hospitality operator ensures that the services and facilities
that are delivered to the customers are up to their expectations.
Typically, branded residences combine the architectural and design There are a variety of

that a
elements of a brand and, if associated with a hospitality brand, hospitality operator brings in laundry, concierge, housekeeping
then in addition to the architectural and design elements, there and health club etc.
are varied services and facilities that are offered by the operator
concierge services, security, business centre, restaurants, health Today, privacy and security are two elements that are vital in
club & salon etc. The more premium the segment gets, the better any buyers list, be it unbranded or branded. However, the brand
the basket of service offerings get! differentiates the attributes of the product ensuring exclusivity
and by providing comfort about the level of privacy and security
Essentially, these residences are a part of a resort/hotel complex that will be extended to the customers.
and thats how the synergies are achieved, with all the services
and facilities. The concept is more prevalent in business cities for 1. Exclusivity
the End Users and in leisure destinations for the Second Home
Buyers. 2. Privacy
3. Security
Branding of residences could be from two broad perspectives
design and services, either or both. In India, and South East The existing inventory in this space, the pricing of the unbranded
Asia in particular, branded luxury living is still in its infancy.Yet a counterparts, the investment appetite and general market/
sizable chunk of the market share in India perhaps as much as business sentiments also play a crucial role in determining the

*
@

$
"
"
!

/
premium that can be achieved for a particular project.
100 cities for us to target, says John Hitchcox, chairman of yoo,
a founding force in residential branding since 1999. Since then Says
, It
weve been involved in numerous projects in cities we didnt think is important to recognise the basic premise of luxury living
to include in that initial list.
@

/
/"

proposition and differentiation for the project makes selection of

Residential branding, though still in its pioneering phase, has in the right brand a key priority. The developers have realised the
recent years augmented growth in the prime global residential need for superior sitting of the project, and indeed the need to
market. Anecdotal research indicates that projects implementing a adopt the exacting standards prescribed by international brands.
branded structure command uplift of over 30% compared to their This may mean a high level of supervision, and attention to detail,
non-branded counterparts. This, of course, varies from region to he added.
region. As emerging economic markets become more and more
competitive, just as in fashion, car and technology labels, increased yoo is in good company with many other property brands
rivalry and the need for greater distinction go hand in hand. vying for business with some of Indias heavyweight developers,
including Lodha and Panchshil Realty. Both developers, along
PREMIUM: with Supertech, Unitech, Century Properties and House of

/
=

"

+
Branded Residences are able to command a premium as they

Mumbai and Delhi in India, as well as Sri Lanka, Indonesia and the
carry the brand promise and its value proposition not only in
Philippines. Panchshils 5 star sanctuary yoo Pune, a yoo Inspired
terms of design, but also in the services and facilities that are
by Starck branded project, is set within an expanse of 17 acres,
provided. The percentage of premium depends from market to
including a 5-acre historic rainforest. In Mumbai, Lodha has
market, ranging at an average of 20% to 30%. Having said this,
erected the tallest residential tower in the world with interiors by
80
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
Armani/Casa, as well as two landmark projects with yoo, including alignment with a certain lifestyle or taste through association with
Lodha Fiorenza with interiors by Jade Jagger for yoo and a highly credible, carefully selected designer or icon.
Lodha Evoq a yoo Inspired by Starck residence. Indeed, yoo
alone is currently underway with 7 projects in India, with a net

"

"
"

!

@

Gross Development Value (GDV) worth in excess of $2 bn. emerging markets all over India and South East Asia - especially
those who are widely travelled and aspire to a particular level
Of course, the task of creating luxury environments in locations of living that they have experienced elsewhere. Equally, for the
with emerging economies is not without pitfalls. These can range expats, investing outside their home country, there is the implied
from regulatory to development to even the marketing of such sense of quality control. Association with a brand offers a level of
projects. "
/

#
!"

name or icon garners a level of trust they might not otherwise

For these reasons, the path to success requires a great deal of feel when purchasing abroad, local property laws permitting.
skill, discernment and market-knowledge. Its important to note
here that the notion of branding property has developed into Though the property sector has been notably slower to the
so much more than simply a link to a lavish hotel or an iconic branding party than other industries, demand for this kind of
"^

@@

"
$

/
project continues to grow in tandem with trends in global wealth
architecture and design is there, alongside luxury, integrated creation as it has done since the 90s. Its a pattern thats likely to
services and amenities, unsurpassed privacy and security, theatres, continue. As new economies emerge, the investment expectations
shopping services, private parking the list of basic expectations

* !
@

@

@
"
" !

!

/
changing, and shaping the way we think about property for the
to attract the buyer? This is where intelligent, insightful branding future.
creates an opportunity to stand out from the crowd, by offering
81
MAY 2014
BRANDED RESIDENCES Key Proposed Projects

CITIES PROJECT DEVELOPER NO. OF UNITS NOTES
Bangalore Leela Palaces, Bharitya Urban 150 Branded Residences to feature in addition to a
Hotels & Resorts hotel project. Units would be in 3 BHK and 4 BHK
layouts.
Project is featured in an integrated township,

located in the northern suburb of Hebbal
Bangalore Four Seasons Westcourt Real Estate 110 The private residences begin upwards of INR 4 Cr
for a 1,800 sf. apartment and upwards of INR 9 Cr
for 3 BHK & 4 BHK apartments of 3,800sf. in size.
Project located in the northern suburb of Hebbal

Bangalore Oberoi Hotels & The Oberoi Group 60 Branded Residences to be feature in addition to a
Resorts hotel project.
Project located near Hebbal Lake

Bangalore \ /"
[ !* Joint venture between 72 is situated in the same compound with hotels as
Residences \ /"
+
the JW Marriott Bengaluru and the Oakwood
Group Prestige Bengaluru.
NCR Four Seasons 3C Company 180

$

"
/
Noida and retail components. The project is currently

being funded by Red Fort Capital.
NCR Leela Palaces, Supertech 100
Noida Hotels & Resorts
NCR Hyatt Hotels Ireo 265 Is to be featured within a 29 acre integrated
Corporation complex to be located on the Golf Course
Extension Road in Gurgaon.
Mumbai World Towers Lodha Group 300 Interior design is to be done by Armani Casa, it
is considered to be the worlds tallest residential
!
!"

Project is located in Central Mumbai.

Mumbai Marriott Oberoi Realty 200 Project located in Worli.
International
Ritz Carlton
Mumbai Trump Rohan Lifespaces 45 Project located in South Mumbai.
International
Pune YOO Pune Panschil Realty 228 Project located in Magarpatta City.
Chennai Marriott Nitesh Estates 80 Project located on 36,400 sq. mtrs of land in
International Chennais Boat Club area.
Ritz Carlton
82
HOSPITALITY
ALMANAC 2014
SOUTH ASIA MARKET
OVERVIEW
There has also been a churn in the class of developers over the
IN CONCLUSION last few years, with many investors realising the complexity of the
The robustness of the Indian hospitality industry is seen in the hotel industry (as against being a pure real estate asset), thereby
fact that approximately 53,000 new hotel keys are expected to
$

" "

*/

"
[

"
$
/

]
funds have also now become major players in the industry, and
2018). An interesting side note is that mid-scale hotels will see the have subtly altered the development side of the hotel business in
highest additions of over 35%, followed by upscale hotels at 20%. India.
The other segments also show increases of over 10%.
While there have been a few notable transactions in the last
Demand for hotel accommodation in all the major destinations two years, this market is yet to mature, given that most available
continues to grow, perhaps at a lower rate than supply induction opportunities are at mismatched expectations on price. This is a
in these locations. Key performance indicators have therefore result of these investments having been made at the top of the
been subdued due to this mismatch. Demand growth however, real estate cycle, with most sellers unwilling to discount from
is expected to stabilise, with improvements being seen in the market or replacement costs.
economic cycle, as well as hopes of stable political and regulatory
While India, together with other emerging markets, has enjoyed
environment.
prominence in growth plans for international stakeholders, the
The federal government has recognised the need, albeit selectively, need to step up operations and exposure has also received
of promoting investment in the hospitality industry by including impetus for multiple reasons. While the sheer size opportunity is
hotel projects costing over Rs 2 bn (and convention centres large, the fact that more and more Indian nationals are travelling
costing over Rs 3bn) in the infrastructure lending list. While this abroad makes it imperative that brands are introduced to

@/
"

"
potential guests in their home country. This is relevant at all levels
market the midscale, economy and budget hotels it is a step of the market from luxury to budget/economy, as well as related
in the positive direction. Several state governments have also areas.
realised the potential of the hotel industry, and have announced
We believe that the much awaited consolidation in the industry is
measures to ease licensing and permissions at the local level as
coming together, and the environment is perhaps becoming more
well. Much needs to be done, however!
accepting of the realities of hotel transaction pricing and results.
Politically, 2014 will mark a watershed. Whatever result the The last year has also seen rebranding of supply, another indicator
general elections in April and May 2014 throw up, there is much of the growing maturity of the hotel community.
expected from an incoming government at the Centre. These
Our outlook for the market, therefore, remains cautiously
include quicker policy decisions, which is expected to increase
optimistic.
@
/

["
Q
=

"
/

"
expressed concern about the current levels of exposure and

quality of lending that the banking system has to the real estate
sector (with hospitality being a component). Thus, banks and
/

"

"

to this sector, with their realising the need for better diligence

"

"
!

"

development cycle. Their increasing cautiousness is good for the

industry in the long run, as only the better projects get funded. It
is expected that there will be short-term implications as well, with
some stressed hotel portfolios becoming available as secondary
market transactions.
The hotel industry (amongst other service oriented industries

!"

" "

Z

_
/

initiated by the authorities which include setting up of REITs,

@
+

"
/

these will make funding for hotels easier, and more transparent,
reducing risk outlook.
83
MAY 2014
GLOSSARY
Abbreviation Full Form
ADR Average Daily Rate
AOR Average Occupancy Rate
BKC Bandra Kurla Complex
bn Billion
CBD Central Business District
FY Financial Year
GDDP Gross District Domestic Product
GSDP Gross State Domestic Product
IHCL Indian Hotels Corporation Limited
IT/ITeS Information Technology / Information Technology Enabled Services
ITC Indian Tobacco Company
MICE Meetings, Incentives, Conferences and Exhibitions
MIHAN Multi-modal International cargo Hub and Airport Nagpur
mn Million
MSME Micro, Small, Medium Enterprises
NASSCOM National Association of Software and Services Companies
NCR National Capital Region
NH National Highway
RNA Room Nights Available
RNS Room Nights Sold
SAARC South Asian Association for Regional Cooperation
sf Square Feet
sqm Square Metres
UA Urban Agglomeration
y-o-y Year on year
YTD Year To Date
84
HOSPITALITY
ALMANAC 2014
MAY 2014 SOUTH ASIA MARKET
OVERVIEW
'@
#"
=/
#"
=/

"
! ^

*"

/
["

clients on all aspects of property occupancy and investment, and has established a preeminent position in the worlds major markets, as

@

"

/

"
$

/

"

@

/

/

@=

_

["
/
"

billion in assets under management globally.
#"
=/
@"

!
"
/

@

permission by the Government of India to operate as a wholly owned subsidiary. We are a strong team of over 2,000 employees, operating
across Ahmedabad, Bengaluru, Chennai, Gurgaon, Hyderabad, Kolkata, Mumbai, New Delhi and Pune. In addition, we service over 60 other
cities such as Chandigarh, Cochin, Coimbatore, Goa, Jaipur, Ludhiana, Mohali, Mysore and Nagpur amongst others.
'
>

@

"
"
/
@"
=

!!!"!=/ = !
For more information about #!$!%

C&W Hospitality, contact:
&#! '
!"# juhie.tak@ap.cushwake.com
Regional Director - Hospitality
South & Southeast Asia #
! (!
+65 6232 0868 ruchi.bhatia@ap.cushwake.com
akshay.kulkarni@ap.cushwake.com
! !#)
shirat.phougat@ap.cushwake.com
Director Hospitality
India ! *
+91 124 469 5555 Rehan.rizvi@ap.cushwake.com
pr.srinivas@ap.cushwake.com
!+
sasha.menon@ap.cushwake.com
Special Report Branded Residences:

Guest Author
,
Head of Marketing
YOO

.
This report has been prepared solely for information purposes. It does not purport to be a complete description of the markets or developments contained in this material.
["

!""
"

@
"
@
@

!
@

@
@
@
!
"

/
"

!

guarantee that the information is accurate or complete.

#"
=/
All rights reserved.
85
!!!"!=/
AHMEDABAD KOLKATA
Ebony Business Center 6th Floor, Stesalit Towers
703 B3 | Shikhar Complex Plot No. E 2-3, Block EP & GP
Nr. Mithakhali Six Roads Salt Lake City, Sector - V
Navrangpura, Ahmedabad 380 009 Kolkata 700 091
Tel: +91 79 4070 4016 Tel: +91 33 4409 5555
BENGALURU MUMBAI - CITY

4th Floor, Pine Valley First Floor, Mafatlal House
Embassy Golf Links Business Park Padma Bhushan H. T. Parekh Marg
Intermediate Ring Road, Bengaluru 560 071 Churchgate, Mumbai 400 020
Tel: +91 80 4046 5555 Tel: +91 22 6657 5555
Fax: +91 80 4046 5566 Fax: +91 22 2202 5165
CHENNAI MUMBAI - SUBURBS

Paramount Plaza, 5th Floor Block B2, 8th Floor, Nirlon Knowledge Park
# 7A/22 Nungambakkam High Road Off Western Express Highway
Chennai 600 034 Goregaon (E), Mumbai 400 063
Tel: +91 44 4299 5555 Tel: +91 22 6771 5555
Fax: +91 44 4299 5566 Fax: +91 22 6771 5566
GURGAON NEW DELHI

14th Floor, Tower - C, Building No. 8 B-6/8, 2nd Floor, Commercial Complex
DLF Cyber City, Phase -2 Opp. Deer Park, Safdarjung Enclave
Gurgaon 122 002 New Delhi 110 029
Tel: +91 124 469 5555 Tel: +91 11 4310 5555
Fax: +91 124 469 5566 Fax: +91 11 4310 5566
HYDERABAD PUNE
Unit # 111, Ist Floor, Maximus 2B Onyx, 11th Floor, Survey No. 37/3 + 37/4+1
Mindspace IT Park, Hi Tec City North Main Road, Next to Westin Hotel
Madhapur, Hyderabad 500 081 Koregaon, Pune 411 001
Tel: +91 40 4040 5555 Tel: +91 20 6686 5555
Fax: +91 40 4040 5566 Fax: +91 20 6686 5566
KOLKATA
1st Floor, Brooke House
9 Shakespeare Sarani
Kolkata 700 071
Tel: +91 33 4030 5555
Fax: +91 33 4030 5566

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HOSPITALITY

KEY SOUTH ASIAN CITIES 65

HOTEL CONSTRUCTION COST ANALYSIS 76

TRENDSPOTTING: BRANDED RESIDENCES 79

India is currently on the threshold of growth revival. After

Type Time Period Investment TOURISM OVERVIEW

World Ranking (out of 184 countries)

Direct Indirect Induced = Total contribution of Travel & Tourism

The World Economic Forum (WEF), in its Travel & Tourism 

All these indicators demonstrate the importance of tourism,

India received a total of 6.8 mn international visitors in the year

Together, these destinations have over 77,000 keys in existing

and expected additions to supply of accommodation in the

Each of these markets will see addition of over 40% of existing

years. This is perhaps as much a result of the slow-down in the

Current Supply & Pipeline

Supply to increase by 68% till 2018 over 2013 in

AVERAGE OCCUPANCY ACHIEVED

Average Occupancy Rate

40% 45% 50% 55% 60% 65% 70%

AVERAGE RATES ACHIEVED Of the cities achieving growth in average rate,

while three (Bengaluru, Chennai, Kolkata) have experienced

Average Daily Rate

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

TIER 2 DESTINATIONS Chandigarh

pattern in hospitality development, in that branded inventory -

Chandigarh 41% 3,179 3,179

Nagpur AVERAGE OCCUPANCY ACHIEVED

2,000 40% 45% 50% 55% 60% 65% 70% 75%

and corporate entities see in branded products, thus providing

market-led growth in rack rates.

800 Average Daily Rate

897 952 936

- 1,000 2,000 3,000 4,000 5,000

2013 2012 2011 CAGR of ADRs over 3 years

LEISURE DESTINATIONS: Agra

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000

8,000 9,310 9,729 9,729

1,000 1,185 1,185 1,185

750 787 808

AVERAGE OCCUPANCY ACHIEVED AVERAGE RATES ACHIEVED

Source: Cushman & Wakefield Hospitality

KEY SOUTH ASIAN MARKETS: Dhaka

Current Supply & Pipeline

- 2,000 4,000 6,000 8,000 10,000 12,000 6,000 6,736 6,736

in raw demand. Supply in each of these destinations in the last

AVERAGE OCCUPANCY ACHIEVED AVERAGE RATES ACHIEVED

Average Occupancy Rate Average Daily Rate

Colombo Colombo -6%

Tier 1 Cities KPI Unit 2011 2012 2013 2014 F

Tier 2 Cities KPI Unit 2011 2012 2013 2014 F

Leisure Cities KPI Unit 2011 2012 2013 2014 F

the NH 8 that connects Delhi to Mumbai, NH 8C connects it

Quick Review: Almanac 2013 Supply-Demand Dynamics

RNA/RNS Per Day

The total inventory grew by 28% y-o-y in 2012 in the 0

RNA per day RNS per day

65% of INR 4,450.

OUTLOOK Fedara, near Ahmedabad, on PPP basis, metro link to Gandhinagar

OVERVIEW Air Passengers

was completed. 2011 1,665 3,490 2,244 781 1,546

2012 1,850 3,705 2,244 781 1,546

2013 2,153 3,848 2,494 781 1,813

The Kempegowda International Airport, which lies 35 km outside

The World Economic Forum (WEF), in its Travel & Tourism