FHRAI presents The Indian Hotel Industry

Survey
Tuesday, January 21, 2014, 12:00 Hrs [IST]
By HBI Staff | Mumbai

The Federation of Hotel & Restaurant

Associations of India (FHRAI) has released the
latest edition of its widely acclaimed annual
publication, the FHRAI Indian Hotel Industry
Survey, published in cooperation with HVS
Hospitality Services. The survey encapsulates
the performance of hotels in all major Indian
cities and across star categories and market
positioning. In addition to in-depth data on
financial and operating metrics such as
occupancy, average room rates and revenue per
available room, the report also includes a
comparative analysis based on parameters such
as guest facilities, manpower, technology
adoption, choice of marketing media etc.
A presentation on the key highlights and trends emerging from this year's survey was made by
Manav Thadani, Chairman-Asia Pacific, HVS, to a select audience comprising of top hoteliers,
senior government officials and the media, at an event hosted by FHRAI at The Leela Palace,
New Delhi yesterday. Parvez Dewan, Secretary, Ministry of Tourism, Government of India
graced the occasion as Chief Guest.
S M Shervani, President, FHRAI, said, As the leading national voice of the Indian hospitality
industry, FHRAI accords high priority to producing credible research and contemporary thought
leadership which can shape policy and guide business strategy. Our annual Indian Hotel Industry
Survey is an exemplary reflection of this very commitment and it is extremely gratifying that this
publication serves as an indispensable reference and benchmarking resource for hospitality
professionals, policymakers, investors, mediapersons and other stakeholders.
Sharing his assessment on the hotel industry's performance in the past year, Shervani stated that
despite sincere efforts, both by the Government and the private sector, Indias global market
share in tourism remains at a disappointing 0.68 per cent, with the country being ranked 41 in the
world in international tourist arrivals. The World Economic Forums influential Travel &
Tourism Competitiveness Index, placed India at the 65th position among 140 nations in 2013. It
is pertinent to note that on their three pillars of competitiveness, India was well assessed in terms

of its human, natural and cultural resource endowments with a rank of 21, but scored an
abysmally low position of 110 globally in its regulatory framework for travel and tourism and 67
on business environment and infrastructure. It is thus amply evident that India has been unable to
convert its inherent comparative advantages into a sustainable competitive advantage for our
hospitality and tourism sector.
He added, 2013 was certainly a challenging year for the industry on account of the global and
domestic slowdown, which is also visible in the pressure witnessed on hotel occupancy and
average room rates. In a tough macroeconomic environment marked by high inflation, rising
interest rates, currency volatility and a tepid demand scenario, hotel companies have prioritised
realignment of their cost structures, optimising operational efficiencies and adopting flexible
business models. At the same time, the industry is optimistic about the long-term potential of the
Indian hospitality sector and we remain steadfastly focused on pursuing customer-centric
innovation, delivering service excellence and tapping newer market segments.
Shervani further stated that in order to achieve the 12th Plan target of 1452 million Domestic
Tourist Visits (DTVs) by 2017, the industry needs to add 1,20,000 rooms in the budget and midmarket category, entailing an estimated capital investment of Rs 50,000 crore. The Government
must facilitate this massive investment by reducing the minimum project cost stipulated for
inclusion of hotels in the RBI's Infrastructure Lending List from the present Rs 200 crore to a
more reasonable threshold of Rs 50 crore. FHRAI has also proposed that bank loans up to rupees
10 crore extended to SMEs in the hospitality industry should be permitted to be classified as
priority sector lending under RBI norms.
He added, Achieving a meaningful growth in Foreign Tourist Arrivals (FTAs), requires that the
Government must empower the industry to effectively compete with our peers in neighbouring
destinations such as South-East Asia, by urgently rationalising our complex multiple tax
structure, adopting a streamlined electronic visa regime for international tourists and reviving
investor sentiment in the hotel sector through measures such as single-window project clearances
and access to lower cost long-term funding.