With cities like Mumbai, NCR, Goa, and Hyderabad edging ahead of it, Ahmedabad is set to be the eighth most attractive destination of hotels by 2013, says a study by Knight Frank India Pvt Ltd, a leading global property consulting firm.
The research study on India's hotel market provides an extensive scenario of the hotel market projecting the demand and supply dynamics of 10 major cities by the end of 2013. The study also assesses to measure the performance of the existing hotels in terms of ARRs, occupancy rates and other operational characteristics as well as analyses the present market condition regarding hotel development. The study encompasses 10 key cities in the hospitality industry namely NCR, Mumbai, Bengaluru, Goa, Pune, Jaipur, Hyderabad, Chennai, Kolkata and Ahmedabad.
While NCR will attract 24 per cent of the total supply of 81,296 rooms by 2013, Mumbai, Hyderabad, Bangalore, Chennai, Pune, Goa, Jaipur and Ahmedabad will see 16, 12, 12, 9, 7, 6, 5 and 4 per cent, respectively.
"Supply side of survey have been done through research of hotels that will be operational by 2013 in Ahmedabad. Our research indicates that the major hotel projects are located in the western region of the city due to the several commercial and retail developments over last decade. We expect that the competition in the hospitality sector of Ahmedabad will increase substantially since the incremental demand will not be able keep pace with the incremental supply," said Samantak Das, national head – research, Knight Frank India.
In order to gauge the dynamics of hospitality industry, Knight Frank research segmented the hotels in three broad categories namely upscale, midscale and economy and a sample of 250 hotels across 10 cities was surveyed in these categories. The research also formulated city specific econometric models to forecast the demand supply dynamics. The econometric model for each city has been developed after studying the various factors that have significant bearing on the hospitality market of the city.
However, according to Das, the growth in demand of hotel rooms will be less than growth in supply till 2012. "The comparatively lesser growth in demand will put pressure on the occupancy rates till 2012. We may see occupancy rates going down from 40-50 per cent at present to 36 per cent by 2012. After that there will be a consolidation in the market which should push up the occupancy rates again," he added.