India's hotel rooms set to double by 2010

India’s chronic shortage of hotel rooms will slowly be relieved over the next few years if proposals go ahead to build 400 new hotels, ranging from 5-Star luxury hotels to budget hotels.
At the moment India has about 110,000 hotel rooms and a senior official in the Ministry of Tourism has said that $6.5 billion will be invested in building hotels providing 140,000 new hotel rooms by 2010, although more conservative estimates put this figure nearer to 70,000.

The shortage of hotel rooms, which drives up the cost, is affecting many businesses and in one instance, traveling sales staff and other professionals are commuting by air daily from Bangalore to Mumbai, a roundtrip of 1240 miles each day.

“They are making you fly to Bangalore every day in the morning and fly back every night because it’s cheaper than paying the hotel bill,” said an analyst for a leading hospitality consulting firm.

One Indian software giant with 66,000 employees worldwide couldn’t wait for new hotels to be built. Instead it built its own 500-room hotel next to its Bangalore headquarters and plans to have 15,000 company-owned hotel rooms across India. This represents nearly one eighth of the entire number of hotel rooms in India, and more than any hotel chain operating in the country.

A room for the night at its own Bangalore hotel costs the company about $15 and the employee gets 3-Star treatment which would cost about $150 elsewhere the company estimates.

The enormous potential for hotel accommodation which will transform the hospitality industry is being spearheaded by international and local hotel chains clamouring to invest in India’s booming tourist and hospitality industry.
October 2008