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Hospitality Industry

Hospitality
Hotels
Demand for hotel rooms is far outstripping supply at the moment within India. In 2005, nearly 4mn international tourists visited the country, yet the stock of 'approved' hotel rooms for the whole country stood at around 106,000. This figure is the same as the number of hotel rooms in New York and stands below the 130,000 rooms offered in Shanghai.
It is widely accepted by tourism authorities that there is a severe shortage of hotel rooms in the country. Due to the massive gap between demand and supply, hotels have increased their average room rates by almost 18-22% annually in recent years.
To help meet this shortfall, the tourism ministry has proposed to create a land bank by acquiring land for building hotels in public-private partnership on a built, operate and transfer (BOT) basis. The urban development ministry has already reportedly agreed to allot three sites in Delhi to the tourism ministry.
Indian Railways has also decided to utilise its land inventory for hotels. In early 2007, the Indian Railways Catering and Tourism Corporation (ICRTC) said that it is planning to set up 100 budget hotels across the country within the next two years. It has already awarded projects for the upgrading of its existing hotels in New Delhi, Ranchi and Puri, as well for the setting up new hotels in Mumbai. The IRCTC will shortly issue tenders for new hotels in Chandigarh, Hyderabad and Bangalore.
In addition to this, the tourism ministry has brought out guidelines for classification of apartment hotels, time share resorts and guest houses. It has sanctioned a capital subsidy for 43 budget hotels and an interest subsidy for 86 hotels of the same category. The ministry has also decided to build up the required inventory of budget category rooms through recognition of spare rooms available with various house owners by classifying these facilities as 'Incredible India Bed & Breakfast Establishments', under Gold and Silver categories.
At present, there are...