|
|
|
Run up to the Budget: Hotel industry
Locationwise room demand and availability in the premium segment
|
(nos) |
1999-2000 |
2000-01
E |
|
Mumbai |
|
|
|
Demand |
2,648 |
3,178 |
|
Availability |
4,099 |
4,686 |
|
Surplus |
1,451 |
1,507 |
|
Delhi |
|
|
|
Demand |
3,338 |
3,472 |
|
Availability |
5,683 |
6,006 |
|
Surplus |
2,345 |
2,534 |
|
Calcutta |
|
|
|
Demand |
475 |
493 |
|
Availability |
919 |
919 |
|
Surplus |
444 |
426 |
|
Chennai |
|
|
|
Demand |
620 |
713 |
|
Availability |
1,005 |
1,127 |
|
Surplus |
385 |
414 |
E: Estimate
Source: CRIS INFAC
State of the industry (2000-01)
- Foreign tourist arrivals (including arrivals from Bangladesh and Pakistan) are expected to increase by 8 per cent. However, growth in foreign tourist arrivals, excluding Pakistan and Bangladesh would be lower.
- In Mumbai and Chennai, demand for rooms is expected to increase by 15-20 per cent; and in Delhi and Calcutta, by 4 per cent each. Growth in demand in Mumbai and Chennai would be largely due to an increase in the number of business travellers, opening of new sectors such as insurance, and continued development of the IT sector.
- By March 2001, in the metros, room availability in the premium segment is expected to increase by 1,847 rooms as compared with that in 1999-2000.
- In the metros, occupancy rates are expected to increase. However, average room revenues are not expected to increase. During the April-December 2000 period, in the metros, occupancy rates increased by 2.6-4.3 per cent (except Delhi, where occupancy rates declined), and average room revenues declined by up to 4 per cent.
- Operating profit margins are expected to either remain relatively unchanged or increase marginally. During the April-December 2000 period, operating profit margins of 6 major hotels declined, from 31.2 per cent to 30.1 per cent.
Performance in the premium segment: Mumbai, Delhi, Kolkota and Chennai
|
(Rs) |
Occupancy
rate
(%) |
Average
room
revenue
(ARR) |
Revpar |
|
|
1999-2000 |
2000-01 |
Change
(%) |
1999-2000 |
2000-01 |
Change
(%) |
1999-2000 |
2000-01 |
Change
(%) |
|
Mumbai |
60.8 |
65.1 |
4.3 |
6,060 |
6,036 |
-0.4 |
3,683 |
3,930 |
6.7 |
|
Delhi |
54.8 |
53.1 |
-1.7 |
5,052 |
4,849 |
-4.0 |
2,770 |
2,575 |
-7.0 |
|
Chennai |
59.7 |
62.4 |
2.6 |
4,463 |
4,327 |
-3.1 |
2,666 |
2,698 |
1.2 |
DoT class.: DoT classification; Revpar: Revenue per available room.
Notes:
1) Figures are for the April-December 2000 period.
2) The revenue per available room was calculated as the occupancy rate multiplied by the average room revenue. As revpar includes both the performance variables, ARR and occupancy rate, it is a better indicator to assess the operating performance of a hotel.
Source: Industry
Industry expectations from the Union Budget (2001-02)
- Removal of expenditure and service taxes: The Federation of Hotels and Restaurant Association (FHRAI) has proposed the removal of the 10 per cent expenditure tax and 5 per cent service tax.
- Granting of infrastructure status: The FHRAI has asked for infrastructure status to the hotel industry under the Income Tax Act.
Rediff-CRISIL Budget Impact Analysis
Budget 2001
Disclaimer: CRISIL has taken due care and caution in compiling this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of its web site.
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