Showing signs of recovery, the GDP has risen to 5.7 since the Modi government took over. Gujarat, the fastest growing state of India, is witnessing the upward trend. One of the major consumer of cleaning products, the hospitality industry has registered a whopping 10-15% growth in hotel room occupancy in Gujarat alone. Combined survey from HVS Hospitality services and FHRAI reveals that Gujarat has shown remarkably the best growth rate in hospitality industry in India. Over a five-year period, the State has jumped up by five places. With around 2.9 crore tourists visiting the State annually, the amalgamation of tourism industry and soaring demand in business travel has made the State the ultimate ID for the hospitality sector. Suprita Anupam elaborates on the recent developments in hospitality sector and the consequential cleaning & facility services.
Gujarat has shown commendable improvement amongst all states, moving up to number four. Increased supply of branded hotel rooms, a higher per capita income and a better ranking of its state tourism website have all contributed to this achievement…
Ahmedabad: Leading from the front
Out of the 12 Indian major cities witnessing growth, three cities of Gujarat- Ahmedabad, Surat and Vadodara – have been registering high occupancy and supply of hotel rooms. From January 2010 to December 2013, around 2,300 rooms (35 new hotel projects including bed-and-breakfast inns) have been approved in Gujarat. Latest FHRAI and HVS survey reveals that almost seven new hotels with combined inventory of more than 700 rooms have opened in the city in 2012-13 alone, and the city is expected to add an additional inventory of 1,500 hotel rooms in the next couple of years. With Marriott International among the very first global player setting up its hotel there in 2010, a number of new players are now entering the market which indicates the growing appeal of Ahmedabad.
Ahmedabad also has a strong industrial foothold in textiles, chemicals, plastics, automobile and pharmaceuticals. The Sarkhej Gandhinagar Highway along with the neighbouring areas of Prahlad Nagar have gradually developed into alternate Central Business District. The momentum of growth is expected to be fuelled further in the coming years with futuristic infrastructural projects like dedicated freight corridor and Delhi- Mumbai Industrial corridor becoming a reality. The City has shifted gears as an investment hub for hotel investors in the changing scenario.
Some other long term projects such as Gujarat International Finance Tec-city, Mindspace and Sabarmati Riverfront Project at its peripherals have also helped gain higher room occupancy. The city, earlier dominated by local players, is now witnessing a spurt of organised players entering into the city.
Saurashtra region is also poised to see a similar boom in hospitality. Key areas like Rajkot and Bhavnagar are set to get the major chunk of the investments. Learning from Rajasthan counterparts and riding on the demand, a majority of the palaces such as Kathiawad, Zalawad, Gohilwad, Halar and Sorath have been converted into guest houses/hotels. Bhavnagar’s Neelambaug Palace, Wankaner Palace and Gondal’s Riverside Palace have been converted into heritage hotels and there is a plan to create a luxury hotel out of Khirasara Palace, a 500-year-old heritage building. Falling geographically on the coastal belt of the region, Union territory Diu is not far behind. World Class spa resorts and some hotels are in the process of making at this little island.
Boon for Surat! As per the MoUs signed in Global Investors’ Summit, ten new hotels are expected to be operational in two years with an investment of `2000 crore to be made. According to Surat Municipal Corporation officials, the land has already been made available and further development has also been initiated. Majority of the investment is reasonably for three star level hotels particularly in station cluster area and the airport area is being kept for four-five star hotels.
The Corporation has entered into an MoU with three developers for hotel projects in Abhava, Rundh-Vesu and Gaviyar-Magdalla. The tourism department too has entered into an MoU with seven developers for developing the properties. Besides this, some of the developers are also supposed to build huge entertainment parks on the outskirts of the city.
Located on NH-8 between Ahmedabad and Surat, Vadodara is one of the most important cities in Gujarat. It acts as the entry/exit point for major industrial zones such as Savli and Halol along with the industrial townships of Dahej, Bharuch, and Ankleshwar. The industrial focus is concentrated towards chemicals, power, petrochemicals, oil & gas sectors. Big companies like L&T, ONGC, Alstom, Linde, Bombardier, Adani and Reliance have their manufacturing plants in the city. Witnessing tremendous growth driven by the development of SEZ and new factory setups and expansions of existing plants, a major share of the room night demand for hotels in Vadodara has been generated from these industrial areas. “With additional branded hotels under development in the city, this trend is likely to continue in the short term. However, continued investment in the region supported by a pro-incentive State Government along with expansions planned in existing manufacturing units, is anticipated to drive steady growth of demand for hotels located in Vadodara,” observes HVS.
A vibrant and long term development in hospitality essentially needs the coupling of well-developed infrastructure, increasing air connectivity and the progressive policies of the government. To accelerate the growth of hospitality industry in the State, the government has provided single window clearance system which has reduced hassles for potential investors. Formulating the lucrative investment policy, the State government has also provided more assistance for the investors in hospitality sector like tax holidays, interest subsidies, concession in electricity duty and tariff, modification in lending criteria, assistance in land acquisition and allotment, etc. However PK Mohankumar, MD & CEO, Roots Corporation Ltd has his say, “The lease of land is a very expensive affair and if calculated as per with a built up room then the budget hotel project will not be viable. The government should divide a city in zones or come up with a master plan where the allocation of land could be kept aside for hotel development too. They may try and give it out on lease basis.”
Developing a dozen of new Special Investment Regions at places like Dholera, Halol Savli, and Viramgam-Sanand has helped a lot in the growth of the hospitality sector as a chain effect and the chain effect would continue to pull cleaning & FS industry too. Foreign players too have forayed into the state to register their active presence either through the franchises or acquisition of local players. Catering to over 60% of the guests, local players too have a significant role to play in the development.
Witnessing 12-13% growth in the tourist footfall every year, the State Tourism Corporation has planned to invest `550 crore this financial year in order to further upgrade the public amenities and infrastructure like parking, public toilets, provision of safe drinking water, food kiosks among others. With investment laid out, it aims to achieve 18% growth in tourist arrivals which was around 2.9 crore last year. Of this, 10% are international tourists.
To further attract the tourists and encourage their longevity in the state, the Corporation is promoting various state oriented festivals such as Mango festival, Monsoon festival, Tarnetar fair, Navratri festival and The Rann Utsav.