By Cushman & Wakefield exclusively for Hotelier India
India’s financial capital, which is the largest contributor to India’s taxes, is seeing a burgeoning growth in its hospitality sector.
Mumbai, the capital city of Maharashtra, is one of the largest metropolitan cities in the country with a population that ranks fifth in the world. With modern infrastructure and contemporary city facilities, Mumbai has a colourful history that glitters with legendary tales of Maratha valour.
The commercial capital of India enthralls you with monuments that are legacies from the past. The city has the Gateway of India, Haji Ali Mosque, Elephanta Caves, Flora Fountain, Victoria Terminus and several other attractions for tourists.
From being a manufacturing and textile centre, the city has evolved into a major financial and trading center. Aptly referred to as the commercial and business capital of India, Mumbai houses important financial institutions such as the Reserve Bank of India (RBI), the Bombay Stock Exchange (BSE), the National Stock Exchange (NSE), along with all major industrial powerhouses and financial corporations in the country.
The city is the largest contributor to the India’s taxes and half of India’s international trade passes, through its splendid harbour.
In addition to the service and manufacturing sector, Mumbai is also home to India’s foremost Hindi film and television industry – Bollywood. Mumbai’s importance as a business and leisure destination has made it one of the most sought after hospitality location in India.
Most of the first generation hotels in Mumbai were located in South Mumbai coinciding with the actual centre of business in and around the area of Nariman Point, Churchgate and Ballard Estate.
However, there has been a gradual shift northwards with locations like Bandra Kurla Complex (BKC), Andheri, and Malad coming up as important business districts.
These are also areas that are in close vicinity to the International Airport, making them easily accessible for business travellers. Needless to say, these areas have already attracted the attention of hoteliers.
The northern suburbs are the new hub of upper upscale and upscale hotels. JW Marriott, Taj Lands End and The Renaissance Mumbai Hotel and Convention Centre are a few major players in north Mumbai.
The top hotels namely Hyatt Regency, Intercontinental – The Grand, Le Royal Meridien, ITC Grand Maratha Sheraton and The Leela are centred around the Chattrapati Shivaji International Airport in Andheri.
The last decade has seen a major shift in the profile of hotel users in India from leisure to business travellers. Hoteliers are leaving no stone unturned to ensure their properties have something unique to offer.
With hotels offering airport pick-ups, express check-ins and checkouts, wireless internet connectivity, interactive televisions, smart meeting and conference facilities in addition to the attractive tariffs and special discounts for corporate clients, one can comprehend that business travellers arriving in the city today are spoiled for choice.
For example, The Renaissance Hotel and Convention Centre has an executive lounge spread across 12,500 sq ft – a sun-deck terrace, foot reflexology, library, board rooms and a central bar are some of its many features.
On the other hand there are the Taj Hotels and Resorts, which offers special butler services to Taj Club and suite room guests using their executive lounge.
The pampering of the business traveller is not just a knee-jerk response to rising competition in the industry, but a well thought out strategy. The leading hotel chains are totally dependent on over 85% of usage originating from this segment. For the same reason, most of the new properties (upper upscale to midscale category) in the city have branded themselves as business hotels.
After rooms, banqueting is an important revenue churner for hotels along with food and beverage. The hotels operating in the city today have business centres and conference centres equipped with new technology offering facilities at par with any Grade ‘A’ corporate office.
For example, JW Marriott has a dedicated executive floor popular with business travellers and corporates along with a total space of 15,689 sq ft allocated for meeting and conference and banqueting facilities.
At the same time, The Renaissance Convention Centre too offers 230,000 sq ft of indoor and outdoor space to suit a multitude of occasions. Hotels in Mumbai have to be doubly careful about the services they offer. With stiff competition, loyalty and repeat customers can only be guaranteed through the services offered.
While the brunt of the economic crisis was being felt across the industry, the unfortunate terror strike in 2008 in Mumbai, brought the hotel industry to a massive slowdown.
The city witnessed the occupancy erosion of 8% since 2007/08 reaching to 64% in the year 2009/10. At the same time the ARRs too declined from `8800 to `7605 for the same time period.
While the sector was struggling since the first half of 2009 due to negative travel advisories and security concerns, a strong pick up in foreign tourist arrivals had been encountered (FTAs) since September 2009. Given the recent increase in arrivals, it is estimated that FTAs will increase to about 5.8 million and 6.6 million in CY11 and CY12 respectively.
In view of this, due to gradual revival felt in the economy, the current fiscal started on a positive note for the Indian hospitality industry. While ARRs continued to remain under pressure, high occupancy rates have come to the rescue of hotels across the city. Until June 2010, the occupancy for hotels has further increased 2% from year-end figures reaching to 66%, while the increase in ARRs have been 5% i.e. around 7985.
Further, with more and more hotel brands expediting their presence in the city, the hospitality industry seems buoyant to the extent of supply outstripping demand for the moment.
In the short to medium term, therefore, Mumbai is unlikely to see any significant increase in hotel room rates in the financial year 2010-2011. The supply of rooms will undoubtedly exhibit pressure on ARRs, but with slight improvement in occupancy rates, the RevPar is expected to improve marginally.
The city is expected to witness an addition of some 1600 rooms by 2011. At present, there are 5888 rooms in the upper upscale and upscale segments of the city, while in the budget and midscale segment there are 3312 keys.
A large portion of supply is expected to come up in the upper upscale and upscale segment with brands like Shangri-La, Radisson, and Crowne Plaza joining the bandwagon. The trend of hotels being launched at the top-end is mostly due to high real estate costs, which developers then have to invariably invest in.
Over the last two months, more than 1000 hotel rooms have entered the city. These hotels include the 331 keys Courtyard by Marriott, the 269 keys Westin Mumbai Garden City, and the 225 room Holiday Inn all located in the eastern suburbs of the city.
The additions in Navi Mumbai include Royal Orchid Central with 67 keys and Four Point under the Starwood brand with 150 keys. The city is also experiencing the launch of innovative formats amidst hotels.
Le Sutra the 16 key hotel is located in the western suburb Khar. Inspired by Indian mythos, the rooms are accordingly designed as a virtual canvas based on characteristics like sensuality, love and purification.
The new hotels have been developed in anticipation of an increase in demand from both domestic and international travellers to the city. Three more business hotels under Accor Hospitality will add to the room inventory of the city.
Catering to every segment, the group plans to enter the midscale segment with 180 keys Ibis Hotel, 550 key Novotel Hotel in the upscale segment and 302 key Sofitel Hotel in the luxury segment. While Ibis is expected to launch later this year, Novotel and Sofitel are likely to set up by 2011 and 2012 respectively.
The month of August also saw the reopening of the Taj Mahal Palace & Towers, Palace wing, which was shut down after the terror strike in late 2008.
For the coming years, the city is expected to witness a momentum in growth with demand shifting to Navi Mumbai on account of a new airport being proposed, while the suggested developments of a theme park, which would be a public private partnership project by Future City Properties and Cidco and golf courses, again a proposed development undertaken by Cidco, are expected to stir leisure demand in the area.
Initiatives like Visit Golden Maharashtra 2010 would allow the state to showcase known and unknown facets of the destination including eco, heritage and wine and Bollywood tourism.
In the medium and long term, that there will continue to be a demand for starred hotels in Mumbai. So, hotels must try and cash in on these opportunities by strengthening services around government-planned initiatives with an aim to add value to guests.
Mumbai: not just Bollywood
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By Cushman & Wakefield exclusively for Hotelier India
India’s financial capital, which is the largest contributor to India’s taxes, is seeing a burgeoning growth in its hospitality sector.
Mumbai, the capital city of Maharashtra, is one of the largest metropolitan cities in the country with a population that ranks fifth in the world. With modern infrastructure and contemporary city facilities, Mumbai has a colourful history that glitters with legendary tales of Maratha valour.
The commercial capital of India enthralls you with monuments that are legacies from the past. The city has the Gateway of India, Haji Ali Mosque, Elephanta Caves, Flora Fountain, Victoria Terminus and several other attractions for tourists.
From being a manufacturing and textile centre, the city has evolved into a major financial and trading center. Aptly referred to as the commercial and business capital of India, Mumbai houses important financial institutions such as the Reserve Bank of India (RBI), the Bombay Stock Exchange (BSE), the National Stock Exchange (NSE), along with all major industrial powerhouses and financial corporations in the country.
The city is the largest contributor to the India’s taxes and half of India’s international trade passes, through its splendid harbour.
In addition to the service and manufacturing sector, Mumbai is also home to India’s foremost Hindi film and television industry – Bollywood. Mumbai’s importance as a business and leisure destination has made it one of the most sought after hospitality location in India.
Most of the first generation hotels in Mumbai were located in South Mumbai coinciding with the actual centre of business in and around the area of Nariman Point, Churchgate and Ballard Estate.
However, there has been a gradual shift northwards with locations like Bandra Kurla Complex (BKC), Andheri, and Malad coming up as important business districts.
These are also areas that are in close vicinity to the International Airport, making them easily accessible for business travellers. Needless to say, these areas have already attracted the attention of hoteliers.
The northern suburbs are the new hub of upper upscale and upscale hotels. JW Marriott, Taj Lands End and The Renaissance Mumbai Hotel and Convention Centre are a few major players in north Mumbai.
The top hotels namely Hyatt Regency, Intercontinental – The Grand, Le Royal Meridien, ITC Grand Maratha Sheraton and The Leela are centred around the Chattrapati Shivaji International Airport in Andheri.
The last decade has seen a major shift in the profile of hotel users in India from leisure to business travellers. Hoteliers are leaving no stone unturned to ensure their properties have something unique to offer.
With hotels offering airport pick-ups, express check-ins and checkouts, wireless internet connectivity, interactive televisions, smart meeting and conference facilities in addition to the attractive tariffs and special discounts for corporate clients, one can comprehend that business travellers arriving in the city today are spoiled for choice.
For example, The Renaissance Hotel and Convention Centre has an executive lounge spread across 12,500 sq ft – a sun-deck terrace, foot reflexology, library, board rooms and a central bar are some of its many features.
On the other hand there are the Taj Hotels and Resorts, which offers special butler services to Taj Club and suite room guests using their executive lounge.
The pampering of the business traveller is not just a knee-jerk response to rising competition in the industry, but a well thought out strategy. The leading hotel chains are totally dependent on over 85% of usage originating from this segment. For the same reason, most of the new properties (upper upscale to midscale category) in the city have branded themselves as business hotels.
After rooms, banqueting is an important revenue churner for hotels along with food and beverage. The hotels operating in the city today have business centres and conference centres equipped with new technology offering facilities at par with any Grade ‘A’ corporate office.
For example, JW Marriott has a dedicated executive floor popular with business travellers and corporates along with a total space of 15,689 sq ft allocated for meeting and conference and banqueting facilities.
At the same time, The Renaissance Convention Centre too offers 230,000 sq ft of indoor and outdoor space to suit a multitude of occasions. Hotels in Mumbai have to be doubly careful about the services they offer. With stiff competition, loyalty and repeat customers can only be guaranteed through the services offered.
While the brunt of the economic crisis was being felt across the industry, the unfortunate terror strike in 2008 in Mumbai, brought the hotel industry to a massive slowdown.
The city witnessed the occupancy erosion of 8% since 2007/08 reaching to 64% in the year 2009/10. At the same time the ARRs too declined from `8800 to `7605 for the same time period.
While the sector was struggling since the first half of 2009 due to negative travel advisories and security concerns, a strong pick up in foreign tourist arrivals had been encountered (FTAs) since September 2009. Given the recent increase in arrivals, it is estimated that FTAs will increase to about 5.8 million and 6.6 million in CY11 and CY12 respectively.
In view of this, due to gradual revival felt in the economy, the current fiscal started on a positive note for the Indian hospitality industry. While ARRs continued to remain under pressure, high occupancy rates have come to the rescue of hotels across the city. Until June 2010, the occupancy for hotels has further increased 2% from year-end figures reaching to 66%, while the increase in ARRs have been 5% i.e. around 7985.
Further, with more and more hotel brands expediting their presence in the city, the hospitality industry seems buoyant to the extent of supply outstripping demand for the moment.
In the short to medium term, therefore, Mumbai is unlikely to see any significant increase in hotel room rates in the financial year 2010-2011. The supply of rooms will undoubtedly exhibit pressure on ARRs, but with slight improvement in occupancy rates, the RevPar is expected to improve marginally.
The city is expected to witness an addition of some 1600 rooms by 2011. At present, there are 5888 rooms in the upper upscale and upscale segments of the city, while in the budget and midscale segment there are 3312 keys.
A large portion of supply is expected to come up in the upper upscale and upscale segment with brands like Shangri-La, Radisson, and Crowne Plaza joining the bandwagon. The trend of hotels being launched at the top-end is mostly due to high real estate costs, which developers then have to invariably invest in.
Over the last two months, more than 1000 hotel rooms have entered the city. These hotels include the 331 keys Courtyard by Marriott, the 269 keys Westin Mumbai Garden City, and the 225 room Holiday Inn all located in the eastern suburbs of the city.
The additions in Navi Mumbai include Royal Orchid Central with 67 keys and Four Point under the Starwood brand with 150 keys. The city is also experiencing the launch of innovative formats amidst hotels.
Le Sutra the 16 key hotel is located in the western suburb Khar. Inspired by Indian mythos, the rooms are accordingly designed as a virtual canvas based on characteristics like sensuality, love and purification.
The new hotels have been developed in anticipation of an increase in demand from both domestic and international travellers to the city. Three more business hotels under Accor Hospitality will add to the room inventory of the city.
Catering to every segment, the group plans to enter the midscale segment with 180 keys Ibis Hotel, 550 key Novotel Hotel in the upscale segment and 302 key Sofitel Hotel in the luxury segment. While Ibis is expected to launch later this year, Novotel and Sofitel are likely to set up by 2011 and 2012 respectively.
The month of August also saw the reopening of the Taj Mahal Palace & Towers, Palace wing, which was shut down after the terror strike in late 2008.
For the coming years, the city is expected to witness a momentum in growth with demand shifting to Navi Mumbai on account of a new airport being proposed, while the suggested developments of a theme park, which would be a public private partnership project by Future City Properties and Cidco and golf courses, again a proposed development undertaken by Cidco, are expected to stir leisure demand in the area.
Initiatives like Visit Golden Maharashtra 2010 would allow the state to showcase known and unknown facets of the destination including eco, heritage and wine and Bollywood tourism.
In the medium and long term, that there will continue to be a demand for starred hotels in Mumbai. So, hotels must try and cash in on these opportunities by strengthening services around government-planned initiatives with an aim to add value to guests.
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