The crux of HVS India’s Trends and Opportunity report this year is that the downturn of 2008 was essential to bring in some much needed correction in pricing and development.
In his 13 page report which has become an annual feature, Manav Thadani, managing director, HVS India, writes that he expects rate correction to become a growing trend owing not only to the economic situation, but also to the new branded supply entering the market. “Current hotel operators need to realise that once the consumers have several options, they will settle for the best value proposition and be quick to switch loyalty from hotels that they believe are overcharging them:” he wrote.
The report also makes official that India is on the threshold of a lucrative deal season. “In the future, valuations of hotels are expected to see a correction and this would actually be a good opportunity for serious investors to invest in incomplete hotel projects:” said the report.
Two key issues the trends and opportunity report highlights is that revenue management strategies will evolve to actively start using RevPAR as a performance measure and that the lower borrowing rates courtesy of the delinked commercial real estate (CRE) guideline could entice investors to partner with well-known international and domestic brands to lower the risk weight of the project and obtain cheaper bank loans.
