Financial Daily from THE HINDU group of publications
Wednesday, Mar 22, 2006


Group Sites

Marketing - Marketing Research
Industry & Economy - Hotels
States - Andhra Pradesh

IT, financial services driving Hyderabad hospitality market

Tunia Cherian George

Highest occupancy rates recorded, says Crisil study

Make-up factor
Infrastructure facilities supporting Hyderabad's growth as a business centre.
Greenfield airport, convention centre aiding the glamour

Mumbai , March 21

Though Bangalore continues to lead the domestic hospitality market with an average room rate of Rs 12,020 in the three quarters to December 2005, Hyderabad is emerging as a potential market, driven by the growth of the IT, ITeS, and financial services industries there.

A study by Crisil Research reveals that five-star hotels in Hyderabad recorded the country's highest occupancy rates of 84 per cent during the nine months ended December 2005, up from 77.1 per cent during the same period in 2004. ARRs have also been on the rise, up 36 per cent at Rs 5,955 for the nine months to December 2005.

During the same nine-month period, the occupancy in Bangalore averaged 76.5 per cent, North Mumbai 76.3 per cent, Delhi 75.8 per cent, Kolkata 72.7 per cent, and Chennai 72.6 per cent, respectively.

According to Mr Sidharth Thaker of HVS International, the Delhi-based hospitality consultant, the development of a greenfield international airport Hyderabad, the country's largest convention centre, and other infrastructural facilities would support the city's growth as a business centre. "It is a great market and has the potential to emerge as the biggest domestic hospitality market. When completed, the convention centre will have the potential to generate between 18,000-20,000 additional rooms per night," he said. Hyderabad, which competes with Bangalore as an investment destination, is scoring on account of a better infrastructure index, he said.

"IT, ITeS, and financial services have a huge appetite for hotel rooms. They are also high-paying customers and so rates in the city are likely to push up even further," he said.

Gaining ground

Mr Sanjoy Pasricha, Corporate Head, Sales & Marketing, The Leela Group, points out that Hyderabad was gaining prominence as an alternate IT destination. "There is a huge diversion of traffic from Bangalore to Hyderabad," he said.

However, he points out that there was limited capacity in the Hyderabad market and so occupancies tended to be high and as a result average room rates were also likely to be on the higher side.

According to an analyst with Crisil Research, Hyderabad has an inventory of 1,010 rooms in the premium segment. Given the limited capacity, ARRs in the city could push up by 35 per cent in the next two-three years. However, she adds that once more capacity enters the market, occupancy levels and rates were likely to taper off.

Among the hotel brands that would enter the market over the next three years are the Novotel, the Leela, the Marrriot, Le Meridien, and the Taj Falaknuma among others.

More Stories on : Marketing Research | Hotels | Andhra Pradesh

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Reckitt Benckiser looking to bring in global brands

McDonald's announces burgers on bicycles
Osim plans HDFC Bank tie-up for consumer loans
Ranbaxy buys auto-injector patent from Senetek
Carbon's Face of the Day contest
Showcause notices to TV channels for airing surrogate ads
Globalpharma ties up with French co for Cetirizine
IT, financial services driving Hyderabad hospitality market
Labelling of GM food: Imported soyaoil will suffer
Cost of complying with EU standards high, says FICCI
SIEMA to coax Coimbatore pump units to go for BIS marking
Godrej launches `age control' soap
Jagson Air to start service from Pondy

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line