Jones Lang LaSalle Hotels, the region’s market leader in hotel investment and advisory services, identified Malaysia and Vietnam as the key growth markets in Southeast Asia, with Singapore, Thailand and Malaysia continuing to be strong markets for predominantly intra-regional travel. Strong fundamentals drive growth in India
While domestic tourism is expanding in India owing to an increasingly affluent and growing population, increasing consumption and the introduction of low cost airline carriers, the Indian government is looking to grow foreign visitation. Over the last five years, India has seen double-digit growth in foreign visitors, the large majority of which (95 percent) are leisure travellers.
Sudeep Jain, Executive Vice President India, Jones Lang LaSalle Hotels, said: “We expect that continued economic growth, increased interest in the Indian markets and improved international access, combined with the modernisation of major airports, will boost inbound business and leisure travel in India. ”
Business and leisure travel are the primary drivers of India’s tourism market. Stifled stock growth over the last five years, however, is leading to a demand supply crunch. And, while India’s RevPAR is growing rapidly, Jones Lang LaSalle Hotels cautions that this may slow in coming years due to supply additions in major Indian cities. During FY2006-2007, performance in Delhi/NCR and Mumbai grew 40 percent and Bangalore grew 20 percent, although Jones Lang LaSalle Hotels warns that such growth, especially in Delhi and Mumbai, is not sustainable for the long term.
India needs to add 150,000 new rooms in the next four years, based on a government target for 2010. The total supply for major Indian cities stands at approximately 30,000 as of March 2008. The introduction of the ‘bed and breakfast’ concept would help to meet demand quickly in places like Delhi, which requires 30,000 new rooms by 2010 to meet the Commonwealth Games’ related demand.
In Mumbai, more than 1,500 new rooms are planned in 2008, but not all are expected to come on-line. Mumbai’s ADR has grown by 40 percent and RevPAR growth will be driven by this increase in ADRs. In Bangalore, 5,700 new rooms are planned for 2008-2009 which is expected to alleviate the current shortage in supply. With occupancy expected to remain at 65-70% in the next five years, RevPAR growth is expected to be driven by ADR growth in 2008-2009.
“Underlying sentiment remains positive however in the short term, a more tempered view on growth will be taken in light of the global slowdown,” said Mr Jain.
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