Growth drivers and challenges in Indian hotel industry
- Author Kuldeep Kumar
- DOI
- Country : India
- Subject : Business Management
Keywords : Budget Hotels, Luxury Hotel Brand, Demand–Supply Scenario. CAGR, ROI
Abstract
India's travel and tourism industry has huge growth potential. In the long run, the demand-supply gap in India is very real and that there is need for more number of hotels in most cities. The present study explores a qualitative and quantitative view to examine the hospitality industry trends in India. The quantitative approach is applied to collect data and figure from published reports and articles related to the industry by accumulating descriptive statistics whereas the qualitative method has been employed for examining the content of collected reports, intercepts of industry expert’s interview and articles on methodology, research areas and results. The study examined that mid-market hotels are likely to be the driving force due to the fact that both domestic and international hotel chains are looking for a fruitful experience in this segment. The luxury segment has a market of its own and the emergence of the budget hotels would not affect the luxury consumers. The two segments are mutually attractive to both the domestic as well as international visitors. Hotels in both the segments have to face the challenges by uniqueness of the product. The study further concludes that one way to make a good return on investment (ROI) would be to look at the hotel business in different light. This could be done by taking a multiuse development approach and make the hotel project more viable. With the potential and future growth of this industry the full utilization of established infrastructure can be ensured by increasing occupancy percentages. Hotel industry may have increased number of hotels to be centered on upcoming tourist spots as well as commercial hubs. Reduction of operating expenses can further be ensured by borrowing other firms with more efficient strategies. The best option to invest for a foreign player is through hospitality focused private equity funds who understand locally the dynamics of the industry.
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