Hotels expect infrastructure status to boost supply, large scale developments

Hotels are batting for infrastructure status.

The infrastructure status for the hospitality industry will increase branded hotel supply at lower costs, said Aashish Gupta, Consulting CEO, Federation of Associations in Indian Tourism and Hospitality (FAITH).

There is a need to have 3-4x of the rooms at present, said Federation of Hotel and Restaurant Associations of India (FHRAI), President, Pradeep Shetty who is batting for infrastructure status for the industry who added that infrastructure status should be granted so that more hotels can come up.

Hotels in India last year added the highest amount of new supply with the addition of 14,000 rooms, bringing the total inventory of chain-affiliated rooms to 183,000 in the country, showed the Economic Survey 2023-24.

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In FY24, the average daily rate increased from Rs 6,704 to Rs 7,616, a 13.6 percent year-on-year (YoY) growth.

"Extended industry status to the hospitality industry along with enabling provision of affordable-rate infrastructure funds for the private sector would go a long way for large scale developments," said Tejinder Gupta, Partner, Grant Thornton Bharat.

Hotel companies have thrived post-pandemic, driven by strong demand boosting occupancies across all segments. Travel companies have also seen strong growth as Indians have increased the number of trips they take in a year from one long trip earlier to multiple shorter trips in the post-Covid phase.

Rating agency ICRA expects robust revenue growth of 11-13 percent for the Indian hotel industry in FY25. Overall, the tourism sector is anticipated to sustain its momentum and grow significantly in FY25.

The Economic Survey also said hoteliers are increasingly leveraging technology to personalise guest experiences and improve operational efficiencies.

They are also adopting innovative operational strategies such as leasing or managing external restaurant, spa, and lounge brands to capitalise on established concepts that attract hotel residents, thereby boosting revenue.

The tourism sector has embraced the digital revolution, the pre-Budget document said. One such initiative is E-Marketplace, designed to facilitate interactions between tourists and certified tourist facilitators and guides through web and mobile applications.

The Centre in collaboration with state governments and union territory administrations is working on registering accommodation units nationwide in the National Integrated Database of Hospitality Industry (NIDHI) portal. This database will aid in formulating effective policies and strategies for promoting tourism, the survey said.