Indian economy is growing fast. This is a good sign for the country but not so good matter for the hotel industry. More and more people are now flocking to India. They are business travelers and tourists- both. The number of hotel rooms is not increasing that fast and it is creating a gap between the demand and the supply.
The price of land in major Indian cities is now skyrocketing. So, building new hotels is becoming an expensive matter for the developers. The demand for hotel rooms will only continue to increase in the next 5 years. India is hosting 2010 Commonwealth Games. India is also one of the 4 co-organizers of World Cup Cricket 2011. So, the condition can only get worse.
MSN has published an AP report titled India Economy Boom Leaves Hotel Shortage. It stated:
“India "immediately needs another 100,000 rooms" -- more than double the current amount -- said Lalit Suri, the chairman and managing director of India's Bharat Hotels. He estimated that would require investment of up to $17.4 billion.
What India is going to get will fall short of that.
A total of 300 hotel projects have been approved by the government and are in varying stages of development, said Amitabh Kant, a Tourism Ministry official. Most are likely to be completed in the next three years and should increase capacity by about 75,000 rooms, he said.”
Indian government should liberalize investment policy for construction of hotels. At the same time, major Indian companies in the private sector should come forward to invest in this sector.
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