Hotel industry gears up for Commonwealth Games

The financial losses due to economic meltdown and Mumbai terror attack notwithstanding, the Indian hotel industry is gearing up for the Commonwealth Games next year to make the most of the likely spurt in tourist traffic.

"Things are improving for the hotel industry after March but not in a very dramatic way. We can't quantify the amount of losses we made last year but I think the Commonwealth games will certainly give a major boost to the hotel industry," says Bharat Bhushan, director, Hotel Association of India.

Text: Anurag Sharma, PTI

Mumbai terror attack and the economic slowdown obviously had an impact but 2010 Games will be a catalyst for a boom in the tourism sector, he adds.

K B Kachiu, vice-president, Carlson Hotels(Radission), says that the hospitality sector have already started experiencing the pressure due to the upcoming sporting extravaganza.

"We are expecting more than 15 per cent growth next year only because of the Games. And it's not just the three-week event but delegations and people will come quite before the games start. We have added additional rooms and created facilities specially for serving the guests. The heat is already on," he adds.

The Commonwealth Games are scheduled to be held from October 3 to October 14, 2010. And as per industry estimates, currently, there is a requirement of around 30,000 rooms in Delhi and the NCR for the 2010 Commonwealth Games.

According to global consultancy firm Deloitte, occupancy in hotels was down by 14 per cent throughout 2008, and average room rates rose 4.5 per cent.

"In 2010, India will host the Commonwealth Games for the first time, and hoteliers here will be hoping to emulate the success of Melbourne, which was the host in 2006," it said in a report, 'Hospitality Vision-Global Performance Review'.

Vilas Pawar, CEO, Choice Hotels, however, says that the three week extravaganza would be a temporary phase for the hotel industry and it will see a marginal increase in the occupancy figures.

"We have witnessed a substantial loss of around 25-30 per cent drop in the deluxe segment in the last six months but things have improved after April. We are ready to host the guests during games and there will be no shortage of rooms, he adds.

According to industry body Assocham, India's foreign exchange earnings from the tourism sector is likely to grow by 20 per cent to $16.91 billion in the next two years, primarily due to huge tourists inflow expected during the Commonwealth Games.

Anaji Chatterjee, GM (marketing), The Lalit, says, "We are eagerly waiting to host the Games and hoping it will have a substantial impact on the hospitality sector. There is already an increase of 25-30 per cent in NCR in hotel infrastructure. We will soon have meeting with or tour operators, business partners to work on the expected rise in demand of rooms during the Games."

"There are issues which are creating problems but we (hotel industry) are confident to accommodate all the people visiting the country next year, she adds.

But there is a flip side to it also. According to industry insiders, there are host of factors causing delay building infrastructure before the deadline, which includes difficulty in securing finance, an unviable tax structure and delay in getting the required clearances for these projects.