Rising demand drives hotel expansion plans
NEW DELHI : India’s largest hotel chains are rapidly expanding their portfolios amid record-high room rates. In the last week alone, half a dozen hotel companies across India have announced new development plans, including management contracts with independent owners and launching properties signed in the past few years, to capitalize on the soaring demand for hotel accommodations. Buoyed by hotel demand outstripping supply, many top hotel operators are signing up new properties in the first quarter of FY24.
Hospitality industry consultants estimate that between 100-150 hotels could have already been signed this year. Many of these are new developments, led by the growth in tier 2 and 3 cities, and, in some cases, are conversion properties. Take Indian Hotels Co.
Ltd (IHCL), which runs the Taj chain of hotels, for instance. In the first quarter of this fiscal, it signed 11 new hotels across Delhi, Gurgaon, Indore and Guwahati, compared to 29 signed in all of FY20. The company said it had a record year for signings and openings last year, with 36 hotels signed and 16 new hotels opened and is hoping to surpass that number.
“We have continued that momentum in the first quarter of FY24 with an all-time high number of 11 signings and five hotel openings," said Suma Venkatesh, executive vice president of real estate and development at IHCL. For other listed operators like Lemon Tree Hotels, the strategy is to go beyond just tier-one cities. The company is now targeting tier 2-5 cities as well.
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