Hotel majors rush to meet room shortage

The Four Seasons will open doors in Mumbai next month

A massive shortage of hotel rooms combined with an average room rate of $277, the absolute highest in Asia, make Mumbai an attractive proposition for new hotels and several international chains hope to fill the gap.

All over India, and in Mumbai in particular, several domestic and global players are rushing to claim a pie of this market on the back of a huge supply-demand imbalance. Of the 100,000 new rooms projected for India in 2010, just over a tenth, or 11,732 are to be sited in Mumbai.
And yet, say experts, that isn’t going to be enough to satisfy a boom that is set to last at least another five years, driven by a boom in both business and leisure travel.
The $100 million Four Seasons Hotel is the first off the block. Set to open next month, the group’s first property on the Indian subcontinent will add 231 new rooms to the city’s portfolio.
Among the new hotels announced, Shangri-La Hotels and Resorts is to open a 400-room hotel in Mumbai at the end of 2009, the group’s fifth property in India.
Accor has just announced the opening of a 440 room property in Mumbai, due to open in 2010. The project is in partnership with India Blue Mountains, a hotel specific development company focused on India.
The Tata Group’s Indian Hotels Company, which owns the Taj Group of Hotels is reportedly set to build a 200 room hotel near the city’s domestic airport on a site that originally housed the Taj Flight Kitchen. The hotel is to open by the end of this year.
The country’s Oberoi Group is spending Rs6 billion ($1.5 million) on three new luxury hotels, including one in Mumbai.
Other properties announced include a five star property to be run by the ITC Welcomgroup in either Central or North Mumbai, as part of a Rs15 billion ($3.7 million) expansion drive by the company in India. Bollywood film star Mithun Chakraborty has also reportedly signed a land deal for his Monarch Group for a property that is also to be near the airport, while local chain Pride Group of Hotels is reportedly constructing a 120 room five star hotel to be opened sometime this year.
Starwood has announced The Westin Mumbai Garden City, to be sited in the city’s western suburbs, with a total of 269 rooms.
A new Hyatt has been reportedly also set for Mumbai, while Warburg Pincus’ Lemon Tree Hotels is to open a Red Fox Hotel. Other names that have reportedly either recently signed deals or are in the process of doing so are Trident, Ibis, Park Plaza, Mandarin Oriental, Starwood and the Taj’s budget Ginger brand.
by Clark Kelly