Mumbai to be home to most luxe hotel rooms, Bengaluru comes close

A spurt in luxury projects is expected to lead to a 50 percent growth in branded hotel room inventory over the next 4-5 years in Mumbai.

Mumbai and Navi Mumbai will see an addition of 6,771 rooms, taking the total to over 21,000 by FY26, a report by research and data gathering company Hotelivate has said.

These additions will make these two markets home to the biggest number of branded hotel rooms in India, surpassing Delhi, which tops the room inventory tally. The room additions planned for Mumbai and Navi Mumbai for the next five years is nearly three times the supply made during the last 10 years.

“With an ADR (average daily rate) of Rs 8,199 and an occupancy of 76 percent, Mumbai continued to be the top performing market in the country in FY20. Mumbai’s hotel market relies heavily on corporate travel and extended-stay clientele. Moreover, across all segments, foreigners make up a significant portion of Mumbai’s hotel demand,” the Hotelivate report said.

The US-based Wyndham Hotels & Resorts is building a 300-room property near Terminal 2 of the Mumbai International Airport. This will be operational within a year. Lemon Tree Hotels will open a massive, 669-room property, also near the international airport, under the brand Aurika. It is expected to open in 2023.

Indian Hotels Company, the country’s second largest hospitality group by number of rooms, bets on securing clearances for its long-delayed Sea Rock project in Bandra.

While Mumbai flies high on hospitality, Bengaluru isn’t lagging far behind. The country’s IT hub aims to grow its supply of branded hotel rooms by 45 percent from 13,901 in FY21 to 20,167 in FY26. This will help the city outpace Delhi to have the second largest number of branded hotel rooms. The new rooms will come in the mid-market, upper mid-market and upscale categories.

These additions to room inventory are part of the 42 percent increase in room supply until FY26, according to data supplied by Hotelivate. Marriott International, the country’s largest hotel company, has signed 15 properties and aims to take its total inventory to 200 properties by 2025 from the 129 now.

Industry watchers are confident of a robust return in the hotel business, the threat of the third wave notwithstanding. Occupancies across categories have risen to 70 percent at many key destinations with the easing of the lockdown restrictions, pushing room rates back to the pre-pandemic levels.

“Yes, there is a lot of activity in the hotels sector,” said Anil Madhok, Managing Director, Sarovar Hotels. “Sarovar has over 40 hotels in the pipeline and at least 10 will open in the remaining part of this financial year. The market is really looking up for hospitality industry and once international traffic resumes, it would be very good.”

Mumbai took a beating worse than most other destinations with the COVID pandemic driving most business activities to a screeching halt in 2020-21. In addition to the city’s hotels operating as quarantine centres, the density of branded hotel supply in the city saw frenzied price-cuts as hotels, across positioning, grabbed at the little business to be had.

While corporate business slowly returns to the track, as per hoteliers, leisure business is gaining traction faster than expected due to restrictions on international travel and heavily discounted packages offered on extended stay by hotels.