Hospitality

Hotel industry vendors suffer as sector slows down

INDIA

The slowdown in India’s hospitality sector has had a negative impact on the hotel equipment manufacturer and suppliers markets. Delays in hotel projects, hard price negotiations, uncertainties in payments are impacting suppliers’ survival.

In the first half of the year 2013, the hotel industry has gone through a tough phase. Occupancy levels have dropped and average room rates (ARR) have slumped. Occupancy in Indian hotels was 51.4% in June, 2013 and showed a negative growth of 1.1%, compared to that of the June 2012. Similarly, Average Daily Rate (ADR) registered a negative growth of 2.6% and RevPAR registered a negative growth of 3.7%. Even metro cities like New Delhi and Mumbai did not perform well in any of these parameters, the STR Global report stated. ADR in Mumbai fell by 6.8% and in Delhi NCR by 6.5% respectively.

The uncertainties in the global and local economy are making investors hold their purse strings tight. not surprisingly, many planned hotel projects are are either put on hold or are not progressing at the expected pace. Investors are waiting for the business environment to improve to finish their projects

Off-season renovationsGenerally, the tourist season in India is confined to the winter months from October to March. This is mainly due to favourable weather conditions across the country during these months and also the fact that these months coincide with the holiday season in the western and south-east Asian countries. The hot summer months are the time when hotels generally undertake renovations and replacement of various equipments to get ready for the new season. However, because of the increasing input costs and lower revenues, hotels haven’t taken up such works in the last couple of seasons.

Read the full report here,Hospitality Biz India

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