Archive for March, 2011

The hospitality industry in India is growing

March 30, 2011

According to industry reports, the hospitality industry in India is growing at a rate of 15 per cent annually. More and more companies in India are investing in the sector to fill in the gap between supplies (61,000 rooms) and demand (100,000 rooms).

The year 2010 saw the demand in Hospitality Industry pick up after a slow growth in 2009. A company in India such as Reliance Industries (RIL) is entering the hospitality industry through a JV with Mumbai-based real estate company Maker Builders. RIL plans to build two hotels in Mumbai Bandra Kurla Complex.

International hotel chains such as Hyatt, Radisson, Meridian and Marriot are expanding their chains in the country by tying up with companies in India. World hotels will be signing a deal for a resort at Aamby Valley in Maharashtra as well as opening business hotels in New Delhi and Chennai to enter the hospitality industry. InterContinental Hotels Group (IHG) has tied up with Holiday Inn Express, a mid-market hotel brand, and its first property is expected to open in Noida in 2012. Lebua Hotels & Resorts, a Thailand-headquartered luxury hospitality chain is planning to enter India as well. Lebua has hotels in Bangkok and New Zealand.

According to the World Travel and Tourism Council (WTTC) 2011 report, India is expected to attract 6,179,000 international tourist (overnight visitor) arrivals in 2011, generating US$ 15.05 billion (INR678.6bn) in visitor exports (foreign visitor spending, including spending on transportation). The direct contribution of Travel & Tourism to GDP is expected to be US$ 34.8 billion (INR1,570.5bn) in 2011 which is about 1.9 per cent of the country’s GDP. This reflects that the hospitality industry in India will have to gear up to cater to such high demand. Companies in India are investing their capital and industry reports predict that the capital investment in India, in the travel and tourism sector will grow at the rate of 8.8 per cent between 2010 and 2020.

Taking the cue, online travel companies too are making their entry in India to cash in the booming travel and hospitality industry. Hotels.com, an international online hotel booking portal, has plans to spend about Rs 25 crores on promotional activities. ERevMax, an online channel management technology provider, has developed an innovative product for the hotel industry. The product allows fully automated inventory management and rate calculation across over 700 connected websites based on channel performance.

Mandarin Oriental Group, which owns one of the world’s most luxurious hotels, resorts and residences, will be adding 16 new properties in India in the next five years. Other Companies in India such as Small Luxury Hotels of the World (SLH), a marketing firm of luxury hotels, is expecting to expand their foothold in India. Currently, SLH has 13 hotels in India and hopes to add 10 more hotels by the end of 2011. The company also has a website for travel agents through which agents can book rooms for their clients.

India’s growth story

March 14, 2011

The Indian economy is boosting with growth and is attracting the foreign players to come, invest and be part of the aspiring Indian investment climate. One of the leading sectors harnessing the limelight potential is the Indian Fast Moving Consumer Goods sector, with a market size of US$ 25 billion (2007–08 retail sales). Food products being the largest consumption category in India, so much so that the sector constitutes nearly 2.15 per cent of India’s gross domestic product (GDP). India is recognised as a cost-effective quality manufacturing base in the world market. Food products accounts for nearly 21 per cent of the country’s GDP. India is the largest producer of several fruits, such as banana, mango and papaya, and the second-largest producer of vegetables such as brinjal, cabbage and onion. The food processing industry is one of the largest industries in India, and is ranked fifth in terms of production, consumption, export and expected growth.

Tracking the size of the food processing industry in India, it has increased from US$ 57 billion (INR 2,736 billion) in 2004 to US$ 75 billion (INR 3,600) in 2007. Moreover, the sector attracts foreign direct investment (FDI) worth Rs 576 crore (US$ 127.50 million) in the first eight months of 2010-11, according to Mr Harish Rawat, Minister of State for Agriculture and Food Processing Industries.

CG Foods, a noodles and snacks firm set up by Singapore-based Cinnovation Group, is all set to invest Rs 40 crore (US$ 8.82 million) for establishing a manufacturing plant in Gujarat.

The FMCG forms a concrete part of every individual’s life. With the facilitation from the Indian government and the relatively aloof economy during the recession, the companies are foraying into the Indian market with their products in order to tap the vast middle class base of India.

The industry intends to provide additional option to the consumer. Keeping the lead, companies are also looking forward to spend upon research and technology (R&D), with Nestle, another FMCG major plans to invest Rs 230 crore to set up its first R&D centre in India at Manesar in adjoining Gurgaon district.

The invariably growing Indian economy is witnessing its golden age, with the Indian talent in research being recognised globally. The companies foraying into India harness the potential and reap the benefits of the low infrastructure, production and labour costs. In addition, the companies in India like the Pune-based Thermax, has initiated a solar project at a village in Chakan near Pune, in association with the Department of Science and Technology at a cost of US$ 2.84 million to electrify the village. It is these developments, which form the backbone of the growth story of India. It is technology sector, which forever provides inputs to the innovation and research and ignite the investment climate in India.

Significantly, research in science and technology sector includes various sectors include nano technology, renewable energy, space sector besides other related sectors. The investment climate in India being conducive and open to be harnessed is all ready for companies in India and that from abroad. In all the presence of good, sophisticated and latest technological infrastructure attract the foreign firms to have their respective development centres in India, besides reaping the benefits of the lucrative investment climate in India.