Market trends:

With the demand curve in the metros stagnating, smaller towns have emerged as potential growth areas. Thus, chain hotels like IHCL, EIH and ITCH are better placed than single-location hotels like BHL and AHL.

Luxury, leisure and heritage hotels are concentrated in tourist circuits like Delhi-Agra-Jaipur, Mysore-Bangalore, Bhubansehwar-Puri-Konark, Jaisalmer-Jodhpur-Bikaner and Mahabalipuram-Pondicherry.

Various MNCs have started entering the Indian hotel industry. Le Meridien plans to set up 17 hotels in the country. It already has three five-star hotels at Delhi, Bangalore and Pune; the Mumbai branch was recently inaugurated. The company also is coming up with more hotels at Goa and Cochin in the next couple of years. Carlson Restaurant Worldwide, Accord Asia Pacific, Best Western International and Bass Hotels are the other leading multinational hotel groups in India.

Most players, with the exception of IHCL and EIH, have entered into a marketing tie-up with major international hotel chains. For example, ITC-Sheraton, Leela-Kempinski and AHL-Hyatt Regency are well-established collaborations. BHL, too, has a tie-up with the Inter-Continental Hotels Corporation. The Indian partners gain from the brand following of the worldwide international chain and get global exposure. International hotel chains do not stand to lose either. They get an opportunity to test Indian waters without setting up their own infrastructure.