After a two-year lull in development of projects in the hospitality sector, the scenario seems to be changing. Apart from the pent up supply that will come into the market over the next three-four years, announcement of some new deals could well be on the anvil. ?Most hotels which are likely to open by 2011 end are projects that went ahead despite the recession. However, a significant number of projects currently being announced are new deals being signed,? Ajay Sharma, senior manager, valuation & advisory services (hospitality), Colliers International, told FE. Robust room occupancies and improving average room rates (ARRs) seen in the hospitality sector, have had real estate developers queue up for hotel projects again, added Sharma. According to Colliers, an estimated 20,500 rooms would be ready by 2015 across 12 major markets in India. Of this, 60% would be in the economy or budget hotels segment, while the remaining would be upscale and luxury. A total of 164 properties are likely to be developed by end of 2015 in top 10 cities of the country.
In Mumbai market alone, real estate developers like Housing Development and Infrastructure (HDIL), Lodha, DB Realty, Oberoi Realty and a few others have upcoming hospitality projects. HDIL has tied up with Hilton for its Conrad brand, which will come up in Juhu. Lodha is looking at a hotel property in Lower Parel, and DB Realty plans to bring in Park Hyatt at Marine Lines. Also, some real estate funds like Xander Realty Fund are planning a hotel in the city?s latest commercial hub Bandra Kurla Complex and a five-star property in Juhu. Oberoi Realty also has plans for a mixed-use development at its Worli land ad measuring 2.1 million square feet, in which it plans to have a hotel and high-end residential apartments. Mumbai metropolis is expected to see more hotels opening with luxury residential complexes unlike other cities which are seeing more of mixed-use properties, like hotels coming up with malls and shopping complexes. ?Mixed-use development, where commercial or residential development happens along with a hotel, enables developers to maintain a steady cash flow for their hospitality project. Also, by announcing a hospitality project, the developers tend to get better prices for residences and commercial and retail spaces,? said Berinder Sahni, associate director, investment services, Colliers International.
Agreeing that the hotels business helps developers with better valuations, PR Srinivas, leader, travel, hospitality and tourism, Deloitte in India, said, ?Hotels are annualised income for the real-estate developers. There is a revival in the market seen across the country and we are seeing real-estate developers re-visiting their plans in the hotel business.? ?We are seeing more realistic picture by real-estate and hotel companies now. A little more cautious approach is being undertaken in the number of projects they are talking about,” he said.