Hotel investment in India under the microscope
DUBAI – Demand for upscale hotel rooms in India is on the rise, and so are prices, according to Jonathan Worsley, co-organiser of the Arabian Hotel Investment Conference (AHIC), now in its fourth year.
Recent figures bear out this optimism with room rates in the major metropolitan centres rising nearly 40 per cent this year over 2006, while global names such as Shangri-La, Four Seasons, Marriott and Hilton have all announced major expansion plans for India.
“India is gearing up to accommodate international interest, both in business and leisure sectors, in a country poised for rapid growth,” said Worsley.
The Arabian Hotel Investment Conference in Dubai will devote the key opening session on May 3 to the potential opportunities and pitfalls of the burgeoning hotel investment market in India.
“There is perceived potential in every sector from luxury palace resorts to branded budget chains and executive residences,” Worsley said.
“This buoyant scenario aside, there are difficulties associated with investing in this market and the India Summit at AHIC 2008 will address these issues,” he added.
Worsley’s view is borne out by one of the key Middle East players, Kingdom Hotel Investments.
Development director, Tim Hansing, has been keeping a watching brief on opportunities. “Difficulties of obtaining suitable land, bureaucracy associated with construction and constraints of infrastructure mean India is an expensive opportunity,” he cautioned.
“Indian assets do not come cheap, and while there is clearly an under capacity in the hotel sector, international investors are having to compete with local money (investors) and places a different risk perception on future yields,” said Hansing.
The Arabian Hotel Investment Conference will run from May 3-5, 2008 at Dubai’s Madinat Jumeirah Convention Centre and is jointly organised by The Bench and MEED.
Ian Jarrett
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