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The Indian Union Minister of Tourism, Selja Kumari has said the tourism industry in India is on the path to recovery.
Reacting to the growth rate of 12.8% in foreign tourist arrivals (FTAs) in Q1 2010, she told Travel Gazette India, “Now we can safely say that the negative impact has been totally mitigated.”
December 2009 saw a rise of 21% growth in comparison to the corresponding period during the previous year. The trend continued with 16% growth in January 2010 and about 10% in February 2010.
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In addition, optimistic results at the end of Q1 2010 have also got leaders in the travel trade re-strategising.
In India land prices have not permitted budget hotels, but there is now a temporary oversupply.
“Occupancy seems to be here, but rates are going to stay where they are because of oversupply,” says Uttam Davé, president and CEO of InterGlobe Hotels, Accor’s key partner in India.
Keys Hotels is set to launch soon. And, Hilton plans to add 1500 keys in the next 12-15 months, with six out of its 10 global brands – Hilton, DoubleTree, Garden Inn, Hampton, Conrad and Waldorf Astoria. Experts say that this is not the case of too much of a good thing. “In the short term there will be over supply. But no hotel or tourism product is built for three years. There is a seven-year time frame for recovery,” says P R Srinivas, Industry Lead, Tourism, Hospitality and Leisure, Deloitte India.
Things will not be the same, at least for some time. “The customer is trading down. He was earlier looking for a five star deluxe hotel, today he’s happy with a five star,” says Arjun Sharma, MD, Le Passage to India. “We are dealing with a new customer psyche – tendency to book late and trade down.” So, re-strategising does not include hiking prices, for the moment.
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COMMENT
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