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| Hoteliers see room rentals rising 25% during CWG |
| Neeraj Thakur / New Delhi Jul 31, 2009, 01:29 IST |
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More than 100,000 visitors expected for the Games
The battered hospitality industry, which has seen a constant decline in its revenues over the past one year, is betting high on the shortage of hotel rooms during the Commonwealth Games (CWG) 2010. Hotel chains and travel agents are expecting a 25 per cent increase in room rentals during the sporting event as most of the under-construction hotel projects in Delhi and the National Capital Region (NCR) are likely to be delayed due to a financial crunch.
‘Out of the 9,500 rooms expected from the 60 hotel plots sold since 2006 in Delhi and NCR, only 3,500-4,000 rooms are likely to be available during the CWG in 2010. A lot of projects are running behind schedule. In some cases, the construction has not even started,’ Federation of Hotels and Restaurants Association of India Secretary General Deepak Sharma said.
According to industry experts, Delhi would need a room inventory of 25,000-30,000 by next year to be able to cater to the inflow of national and international tourists. However, due to the late offtake of projects, the capital will fall short of the required capacity of rooms by nearly 60 per cent.
‘During the games, the city of New Delhi will witness an increase in demand for rooms in all categories of hotels due to the overall shortage of rooms, which will raise the average rate of hotel rooms by 20-25 per cent,’ The Lalit Suri Hospitality Group Vice-President (Sales) Shobu Mathew said.
New Delhi is expecting more than 100,000 visitors to watch the CWG. The Delhi Development Authority (DDA) has auctioned around 33 hotel plots since 2006. A similar number of projects were expected to come up in the NCR as well. However, due to a financial crunch, a lot of hotel projects are either running behind schedule or have been deferred by the developers.
‘The impact of the global economic slowdown has resulted in tighter debt and equity financing parameters for real estate assets, including hotel development. Investors are reviewing opportunities with greater scrutiny in an attempt to minimise their risk, which is not only driven by the short-term economic slowdown but also by the sheer number of rooms anticipated to enter the market,’ Cushman & Wakefield Hospitality Executive Director (South Asia) Akshay Kulkarni said.
Existing hotel players, who were forced to reduce their average room rentals by 20-25 per cent in the past one year, are hoping to gain ground during the games.
Jaypee Group — which currently runs two five-star properties in Delhi and is coming up with another one in Noida before the CWG — expects room rentals to go up significantly.
‘During the games, existing hoteliers and the tourism industry will definitely show a positive growth, leading to higher ARRs (average room rentals),’ Jaypee Hotels Director Manju Sharma said.
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