Of the top 13 major cities in the country, Ahmedabad witnessed the highest increase in hotel occupancy (10.1%) last fiscal despite an 11% increase in supply, a survey by HVS Hospitality Services pointed out.
The survey titled 'Hotel In India, Trends and Opportunities' said that demand in Ahmedabad is driven primarily by the commercial segment and largely depends on the project-related business emanating from industrial clusters located along the periphery of the city in Naroda, Vatwa, Changodar, Odhav, Aslali and Sanand, in addition to demand generated from the traditional central business district (CBD) areas."
In 2011-12, most hotel markets witnessed a decline in occupancy with the exception of Ahmedabad, Pune, Kolkata, Mumbai and Goa. Ahmedabad, which witnessed a decline in occupancy in 2010-11, bounced back in 2011-12 with the highest increase in occupancy (10.1%) on account of strong growth in demand and limited supply entering the market. Pune, witnessed an 8.4% increase in occupancy, while Kolkata and Mumbai witnessed 4.5% and 2.2% increase in occupancy respectively. Noida, on the other hand, witnessed the highest decline in occupancy (22.3%) in 2011-12, with 50% increase in supply, but only 15% growth in overall demand.
Also, in the past few years, owing to hectic development in the commercial sector, Sarkhej Gandhinagar Highway in the western periphery of the city, is slowly developing into an alternate CBD. New hotels have come up in the area. Recently, Accor Group opened its budget business hotel Formule1 in the neighbourhood. "We have carefully chosen a location that has many restaurants operating in the vicinity, and also the city's central business district (CBD) is moving to this part of the city. Right now, it is the best alternate location apart from the CBD which brings down our cost of property and we can offer competitive tariff," explained Philip Logan, vice president Formule1 Hotels, India.
From an existing supply of 1,975 rooms (2011-12), the city has a lineup of proposed 2,550 hotel rooms by 2016-17. Of these, 9.8% would be in the luxury segment, 39.4% upscale, 26.9% in the mid-market segment and 23.8% in the budget category, the HVS survey said.
"We expect 54,000 rooms to be developed over the next five years, taking total supply to about 138,000 rooms by 2016-17," the survey claimed. Over the past decade, the branded supply of room nights in India has risen by 142%, while room night demand has increased by 150%.
