- Team ProMiller
Weather the Storm: 67% increase in Hotel Rooms likely
Updated: Feb 12, 2020
Isn't it obvious for a developing country like India to see an increase in its Hotels?
Increase in numbers of branded Hotel rooms will only grow in a developing country like India- as it has been in past and remains to continue in future. Although, the catch is that Ahmedabad is likely to see the biggest increase in upcoming supply of branded hotel rooms. As compared to other Indian cities like Delhi, Mumbai, Gurgaon, Kolkata and the likes- this city of Gujarat is expected to see the highest increase of 67%. Basing the study on data points provided by TOI, ProMiller drew few basic trends that can affect the Hotel market in Ahmedabad in near future.
1.) The downside is being observed by the majority of Hotels, irrespective of their scale and this trend can be attributed to the sudden explosion in the supply of branded hotel rooms in the city and many more still in pipeline.
2.) The increase in supply will be matched with demand around EOY 2020, until then the Hotels need to be on their toes and employ the right strategies, whether it is in Hotel Revenue Management, Operations or General Management of the Hotel.
With increasing opportunities in all fields, whether it is business or tourism, Ahmedabad is on its way to enter the league of metro cities soon. The effect clearly shows when we look at the supply of Hotel rooms coming up in the city. During FY 2019- FY 2024, Ahmedabad has 2,006 proposed Branded Hotel Rooms in the pipeline. The future supply landscape is subject to several external forces that may often delay openings.
The pipeline for proposed Branded Hotel Rooms in Ahmedabad showed a likely increase of about 67% of the existing supply which is around 3,000 rooms.
Another side to this fact is that this growth in supply might result in a lopsided supply-demand dynamics of the market in the city. As compared to supply, the city might not be able to attract enough demand for branded Hotel Rooms for another year or two. ProMiller, after extensive research, found out that the downside experienced by Hotels in the city this year- where Hotels struggled to even match their ARR and Occupancy figures with their last year figures- will continue for another year or two. After which, these figures will see a growth as demand will begin to match the supply for Hotel Rooms and market will slowly enter demand-supply equilibrium.
If your Hotel property in Ahmedabad has been struggling to match the revenue figures of last year, you are not alone in this. Right consultation can help you weather the storm.
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