Change is inevitable, continuous and more often than not, required! As we publish this year's edition of the Trends & Opportunities report, it comes on the heels of a historic and monumental mandate that was awarded to the BJP-led National Democratic Alliance by the citizens of India in the recently concluded General Elections. In sharp contrast to last year’s greatly subdued outlook for business, there is a general sense of hope, optimism and positivity today.
The Indian hospitality sector may also want to raise a toast to cheer the official count of branded/organisedhotelroomscrossing the100,000markthispastyear.While growth in supply did indeed outpace growth in demand across some markets, early signs of a recovery were equally evident across others. Overall, financial year 2013/14 saw a marginal improvement in nationwide occupancies,thusbreakingathree-year downward trend.
We have often written about the inherent cyclical nature of the hospitality business. We have also highlighted the importance of allowingnewhotelstolivethroughtheir gestationyears beforestakeholders begin demanding performance and financial retu rn s from t heir invest m en t . I t is imperative that both developers and lenders understand and appreciate the uniqueness of the hotel business, if they truly intend to reap benefits from it. In one of our recent publications(HotelsinIndia–TheStory Behind the Numbers) we had detailed the last three cycles that were witnessed by the Indian Hotel sector and had also commented onthelikelihoodofthenextcyclebeing round the corner. While the following report will provide a thorough analysis of the years gone by as well as an estimation of the years ahead, we thought it important to highlight that, in our view, the tide is turning!
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