According to data from STR Global, India's hotel
industry posted performance improvements in year-end 2010 results
compared to the previous year.
Increases in occupancy have generally outweighed
the falls in ADR, resulting in improved RevPAR.
RevPAR for India
as a whole was up 6.2% during 2010 compared with 2009, led by
individual RevPAR gains in Goa (11.4%), Delhi (8.1%) and Chennai
(7.4%). Only Hyderabad saw a RevPAR decline, due mainly to the
addition of significant supply which limited occupancy gains.
The 2010 gains are tempered by the fact that 2009 comparison
figures were weak and rates in particular have fallen from a very
high base point. To more realistically assess the state of the
Indian hotel market, one should compare current performance with
that of the most recent peak during 2008, before the global
ADR in Bangalore during 2010 lags that of 2008 by
37.34%. For Mumbai, the difference is 30.33%. Chennai, Delhi and
Hyderabad all saw ADR decreases of 20% or more since 2008.
Certain specific situations warrant further attention, namely the
Mumbai bombings of November 2008 and the staging of the
Commonwealth Games in Delhi in October 2010. In Mumbai,
year-on-year occupancy was already in double-digit decline for
each of the six months before the bombings, which then accelerated
to a fall of 47.5% during December 2008. This was followed by
double-digit declines in occupancy until July 2009, with occupancy
gains arriving a year after the incident. Nevertheless Mumbai is a
major tourist hub and the most popular point of entry for
Mumbai's demand in terms of occupied rooms grew
by 14.5% for 2010 over 2009 with 11 out of 12 months during 2010
showing double-digit, year-on-year growth.
Delhi's hosting of the Commonwealth Games proved beneficial to the
economy, but the impact on hotel performance was muted. Actual
occupancy of 73.4% for the month of the games (October 2010) was
down 1.2% compared to the previous year. In the face of this,
hoteliers managed to improve year-on-year ADR by 14.9%.
Many commentators have seen the fall in rates as a long overdue
correction, and pressure is likely to remain acute for some time
given the increase in supply. The Pipeline Report from STR Global
shows more than 46,000 rooms due to open before 2015, representing
a 30% increase in current branded hotel stock in the
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