Top Trends in Hospitality Sector of India

Topics: Hotel, Hospitality industry, Hotels Pages: 16 (5257 words) Published: March 31, 2011
Ten Trends Influencing Hospitality in India: How the Game is Changing | By Achin Khanna and Manav Thadani

This article addresses the ten "game changers” that have influenced the Indian hospitality sector in the past decade and will continue to do so in the years ahead.

The year 2000 was an important one for HVS India; we grew from a team of two members to four. The year 2010 is also an important one as we have grown ten-fold in as many years. Our growth story seems to mirror that of the Indian hospitality sector.

It is only fair to assert that we had started from a very small base. The next decade will thus be even more pertinent as it helps the hospitality sector define its personality and carve its niche. As the Indian hospitality sector gears up to welcome an era of growth, there are several critical influencers or what we think of as game changers that will play a key role along the way. This article aims to touch upon the ten game changers that have facilitated the metamorphosis of the sector in the past decade and will continue to do so in the years ahead.

1. The Indian Economy

Not only is the elephant dancing today, but it's actually one of the only few circuses around. It has been a fantastic growth story for a country that in 1990 attracted only US$ 150 million of Foreign Direct Investments (FDIs), and then received US$ 4 billion in 2000 to over US$ 90 billion in just the past three years.

The millennium year of 2000 was hyped to be doomsday for the computers of the world with Y2K. Well, 2000 came and went by and as we all know the computers did not collapse; instead, Indian technology companies grew considerably and allowed the emergence of the BPO and KPO sectors. This led to a rising middle class and an ever-growing service sector. The opening of the telecom sector a few years earlier also had its role to play. From the most expensive to the least expensive telephone systems in the world – the Indian telecom story is certainly one for the books.

India's GDP has grown at an impressive 8.5% during the six years spanning 2003/04-2008/09. The recent global financial crisis has only reduced the rate by 2-3 percentage points and even then the economy continues to grow at the annual rate of 6% following the three quarters after the meltdown. Several domestic and global agencies have recently applauded the Indian economy's resilience and have projected a growth rate of 7% in 2010 and 7.5% for 2011. India reduced its central fiscal deficit from 8% of the GDP in the early 1990s to 2.5% in early 2008. This gave the government ample breathing space to increase its expenditure (the deficit subsequently rose to 7% of the GDP), and boost demand in the country which enabled the economy to sustain itself during the critical months of the crisis.

Additionally, the Indian demographics continue to cater to the global audience very effectively. An enormous English speaking workforce that is highly educated (more college graduates than any other nation) and ingrained in a service culture that is touted as among the best in the world, makes the Indian employee a worthwhile investment. So while our friendly red neighbour to the north has its own growth story to boast of, we believe that the Indian economy has a lot more dancing left to do before the elephant finally settles down to some silent grazing.

Key Game Changers:

India's exponential FDI growth likely to continue
Indian demographics, the right fit for global business audiences Continued growth of projected GDP, at more than 7% in the years ahead Resilient economy, only marginally affected by the global financial crisis Exponential service sector growth, with emergence of BPO, Telecom and other sectors 2. The Maturing of Indian Hotel Markets

About a decade ago, there were really only a handful of major hotel markets in India, namely the four metros and possibly a Bangalore or a Goa, a result of businesses primarily being based in and needing...
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