India’s top 10 markets to add 36,000 guestrooms by 2013

INDIA India’s top 10 key markets are expected to add a combined 36,000 guestrooms to their existing inventories by the end of 2013, translating to an average annual growth of 17%, global property consultancy Knight Frank India Pvt. Ltd. says.

Of the expected new inventory, about two-thirds is projected in the upscale segment. About a quarter will come in the midscale segment, with the rest slated for the economy category.

Growth in supply is estimated to surpass growth in demand during the next three years, however. “The huge influx of incremental rooms in India will exert downward pressure on the occupancy level and average room revenues of hotels for most of the cities,” says Samantak Das, national head of research for Knight Frank India. “We estimate that the occupancy level across all the cities except Mumbai and Goa to witness a falling trend from 2010 to 2013.”

The study encompasses 10 key cities in the hospitality industry—New Delhi, Mumbai, Bengaluru, Goa, Pune, Jaipur, Hyderabad, Chennai, Kolkata and Ahmedabad. Mumbai and Goa are said to be the most attractive hospitality markets over the next three years, with Mumbai set to overtake New Delhi in market size. Strong growth in demand, higher occupancy level, increasing ARRs and low incremental supply are some of the factors for Mumbai and Goa to outperform other cities.