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[ Report ]
domestic and international leisure travellers contributed 30%.
In 2009 to 2010, the largest number of visitors arrived from the
US and UK. According to the Ministry of Tourism, over the
last two years the highest growth rates in terms of arrivals, have
been from Africa and South America, albeit starting from a low
basis, whilst arrivals from South East Asia and the Middle East
experienced a decline.
Grand Hyatt Mumbai
Hotel Performance
The Mumbai hotel industry suffered a severe setback in 2008
due to the terrorist attacks that all but decimated two of the
finest hotels in the city. The occupancy levels and the ADR
dropped sharply as the city saw demand weaken from both
the corporate and leisure sectors. The ADR in 2007 to 2008
was close to US$ 270 before dropping by 35% in 2009. The
occupancy rate fell from 74% in 2007 to 57% in 2009. The
industry started recovering in 2010 and continued to do so in
the first half of the year. According to the first half of 2011data,
occupancy was 65% (5% above the same period in 2010) and
ADR recorded a marginal increase to US$ 190. RevPAR,
which dropped by almost US$ 100 in 2009 (from US$ 199 in
2007 to US$ 104 in 2009) and increased by 11% to US$ 125 in
the first half of 2011.
Tourism Arrivals
Though the impact of the terrorist attacks were felt on tourism
arrivals in Mumbai in 2009, economic resurgence saw close to 9
million international arrivals and 20 million domestic arrivals via
air in 2010 to 2011. The growth in numbers was also attributed
to the resurgence of Goa as a tourist destination in the winter of
2010, for which Mumbai is the primary hub. Demand was led
by the business segment which accounts for roughly 65%, whilst
Hotel Supply
Mumbai currently has 18,700 hotel rooms, of which close
to 8,900 belong to the luxury and upper-upscale segments.
However, new supply seems to be concentrated in the upscale
or mid-scale segments. Of the 6,200 rooms in the pipeline, 47%
are in the upscale and 13% in the upper mid-scale segment.
This is a trend being driven by both consumers, who are more
price sensitive post recession, and developers, who are seeing the
benefits of these segments in terms of increased net incomes.
Several new brands are poised to enter the city with some of the
world’s most reputable hotel brands such as W, The Conrad and
Park Hyatt scheduled to open in the short term.
Outlook
The lack of space for new development in central and south
Mumbai might lead to higher development costs in these parts
of the city. In addition, the expansion of the city toward the
north and the east due to relatively cheaper land should attract
residential and commercial development, thereby leading
to increased hotel demand and development. The increase
in supply may not be met with a proportionate increase in
demand and corporations continue to seek ways to economise
post-recession. In 2012, ADR is expected to rise whilst
occupancy will experience a marginal drop as compared to
2011 levels. However, these KPIs could experience a lower
growth rate compared to pre-recession levels as occupancies
and ADRs may drop in the medium term and stabilise in the
long term.
38 FHRAI Magazine november 2011 Visit FHRAI Website: www.fhrai.com