Hotels cautiously optimistic in 2015

The two-day event of Hotel Investment Forum India (HIFI) 2015 reflected the cautious mood of the hospitality sector and the challenges the hotel industry is facing today.

Amidst volatile market situation, high debt costs and soaring land prices, HIFI 2015 reflected the cautious mood of the hotel industry. Despite the relatively marginal revival in occupancies and RevPARs in hotel business in India in the second half of the 2014 after the assumption of the new government, the industry is yet to find comfort as room rates are not picking up in many micro markets. Industry players delved into crucial issues of future planning of operations, expectations from operators, development outlook, selection of operators, etc.

According to Vijay P Thacker, Director, Horwath HTL India, confidence of the industry has improved ever since the new government under Prime Minister Narendra Modi came to power. Make in India, e- Visa initiative, Swachh Bharat mission, etc. have brought a long-term attitudinal change, he felt. Presenting the ‘ Outlook for the Indian Hotel Industry’, Thacker said, “Almost 10,000 new hotel rooms have been added into the organised room inventory last year and around 30,000 more rooms are expected to be added in the next three to four years time. Demand creation is the only way forward.”

Regarding the challenges the industry is facing today, he lamented, “The structure of funding in our country is incon- sistent. Thus, debt funding continues to be a concern for the hotel investors.” He also warned the industry stakeholders against heavy discounting to keep cash flows going.

Talking about the ‘ Economic Trends Survey’ report, James E Burba, President, BHN opined, “Economic sentiments are going to be better in key markets, including the US and South East Asia in 2015 com- per cent, average rates declined by 2.70 per cent. Hotels in India have to explore strategies to improve rates,” she stated.

Highlighting the government initiatives to boost tourism in the country, Dr Lalit Panwar, Secretary-MoT, commented, “Almost 40 per cent of the source markets are covered under ETA now, and after the proposed expansion, this would go up to 63 per cent of the mar-