Mysore. The historic city, known as the City of Palaces, is situated at the base of the Chamundi Hills. It enjoys vicinity to the state capital of Bengaluru; being located at a distance of about 140km from it. With a total geographical area of 128.42 sq-km, Mysore is the second largest city in the state of Karnataka and an important tourist and heritage destination. The city has been growing at a CAGR of 14. 6% over the last five years. Trade, Hotels and Restaurants in Mysore has been growing at a rate of 14. 5% since the FY 2005-06 .
The total population of the Urban Agglomeration (UA) is 983,893. As of 2011, the literacy rate of the city is 86.8% which is higher than the state’s average of 75.6%. Kannada is the most widely spoken language in the city. Mysore has its share of temples, lakes, gardens/parks, zoo and museums.The city within its vicinity has major tourist attractions, bird sanctuaries and forest reserves.
Economic overview
Mysore is one of the tier II cities identified for development of IT & ITeS sector along with Mangalore, Hubli – Dharwad and Belgaum in Karnataka. To ease the increasing burden on the infrastructure in Bengaluru, state government and NASSCOM undertook consolidated efforts to persuade IT companies to move to Mysore. Owing to the aggressive promotion by the government of Karnataka, Mysore is expected to catch up as the next IT/ITeS destination in Karnataka after Bengaluru. Infosys has already set up its training centres on a 350 acre plot and a number of other major IT/ITeS companies are establishing their development centres. Mysore is the second largest exporter of software, after Bengaluru. It ranks as the number 1 tier II city for the promotion of the IT Industry in India and is the second city after Bengaluru to have its software park with the International Gateway. Tourism industry remains a major contributor to the city’s economy with silk and woodwork industries. Mysore has the Central Food Technological Research Institute, Defence Food Research Laboratory, Government Tool Room and Training Center, Central Institute of Plastic Engineering and Technology and Central Sericulture and Training institute emphasising the potential for Research and Development.
Hospitality analysis
The demand for quality accommodation in Mysore is rising and we see a rise in the occupancy rates of the city hotels from 57% in 2011 to 63% in 2013. The AOR for the city was recorded at 64% for Q1 2014. The market wide ARR has also seen a rise from INR 2,507 in 2011 to INR 3,035 in 2013. The ARR for the city was noted at INR 3120 for Q1 2014. Being one of the most prominent tourist destinations in South India, Mysore still lacks adequate supply of branded hotel inventory. Mysore is the second largest centre of software services in Karnataka. Its economic development has also been aided by its proximity to Bengaluru. The growing economic importance has given an impetus to the MICE segment, which is expected to grow with the economy. In the leisure segment, opportunity exists in two segments – upscale resorts for the leisure travellers and mid-scale to budget hotels for the economy travellers. Growing occupancy levels, along with growing ARRs, indicate growing demand for rooms, and complemented by a consistent increase in per capita income, make this sector an attractive proposition in Mysore.
Inventory
The city has an existing hotel inventory of approximately 2500 keys. The Radisson Blu Plaza Hotel Mysore which opened earlier this year was the latest entrant in the branded hotel inventory of Mysore with an inventory of 140 keys. The proposed development with 220 keys, Sheraton Mysore by the Brigade group which was slated to open this year has been delayed. Another two prominent hotels scheduled to open next year are the Hyatt Place with 150 keys and the Hilton Garden Inn consisting of 250 keys, which is expected to be the single largest inventory in the city.
Tourism and demand analysis
Mysore capitalises on its vicinity to the capital of the state, Bengaluru, and attracts visitors, being a historic town. It is also referred to as the sandalwood city as sandalwood oil and incense are manufactured in Mysore and exported all over the world. The city attracts tourists from across the globe for its grand palaces, beautiful gardens and the historic relevance of having been the capital of the empires of Tipu Sultan and the Wodeyars. The best time to visit Mysore is during Dasara (September-October) where in tourists from all over the country flock the city. The city is one of the most famous tourist destinations of the state and notices a large amount of tourist activity. The city recorded approximately 3.7 million tourist arrivals for the year 2013 which is a growth of 0.5 million over 2012; however the city witnessed 3.6 million tourist arrivals in 2011. Some places of interest in Mysore are: Maharaja’s Palace, Chamundi Hill, Brindavan Gardens, Chamarajendra Art Gallery and Jagan Mohan Art Gallery, Zoological Gardens, Water Falls, Lalitha Mahal Palace, Saint Philomena’s Church, etc.
Forecast
The Mysore hotel market is dominated by budget hotels with a few midscale hotels. The city has a fair share of organised hotel inventory with both international brands and local brands to the region. The market wide AOR for the city is forecasted to witness a marginal decline, due to addition of Hilton Garden Inn with 250 keys, which is going to be one of the largest hotel inventories in the city and Hyatt Place with an inventory of 150 keys.
Outlook
There is a significant amount of commercial and residential development happening in Mysore which is towards establishing the city as the next hub after the capital Bengaluru. The city which has long been predominantly a leisure destination is now witnessing a fair amount of business travel. With the stability and growth in the market, there is interest among various international hotel brands to establish their footprint in the city and we should see more branded inventory entering the market in the next few years.
