Salaam Mumbai

Bombay has been renamed to its Marâthi name Mumbai in 1996. Capital state of Maharashtra, Mumbai is India biggest city. Its population reached 18 million citizens and is expected to host 30 million by 2020. Mumbai is the place to be for culture via its movie industry outgrowing Hollywood’s production. Tourists attractions are endless. The famous Gateway of India, built in 1911 to welcome the arrival of King George V and Queen Marry, is on every tourist’s picture as well as religious sites and natural wonders are some amongst many attractions that the city has to offer.Luxury to economic segments, Mumbai ‘s hotel offer is developing. Maintaining high occupancy rate and great RevPar in the region seem to be the trend for the year to come as international interests is maintained by both leisure and business segments. Furthermore, the large increase in domestic travellers as well as the emergency of a visible middle-class is due to impose itself and become a strategic target in the hospitality industry. Thanks to the economic growth, government incentives to liberalise the market has facilitated foreign investment and infrastructures improvement : metro and airport construction. Low-cost companies is a step further towards market diversification and the development of economic and budget hotels. However, in India and Mumbai more particularly, inflation rate, building cost and overpopulation are the main difficulties that the city will have to overcome.The ‘Incredible India’ campaign from the Ministry of Tourism has largely contributed to the growing flow of international visitors in the region. Last year, it’s more than 4 million international travellers on the Indian soil, that is a 12% increase compared to 2005. According to the World Travel and Tourism Council (WTTC) India’s travel and tourism activity is forecasted to grow by 8% each year until 2016. International travellers coming mainly from the UK (16.5%), US (15.8%), France (3.9%) or Germany (3.3%). Middle-east and Chinese travellers are also two recent niches. As a result, the Indian Government has just open a tourism office in Beijing. However, investor’s focus has shifted towards the domestic segment.India’s worldwide exportation of goods and services weigh 1.3% of GDP along with 5% of its investment coming from international funds. That is 3 times less than China. However for the past three years economic growth rises to 9%. Highly-skilled work force within IT, pharmaceuticals and telecommunications field and easier communication, as English is commonly used, are other key factors in favour of international relationships, business opportunities and middle-class development. Cities like Mumbai, Delhi or Kolkata, with more than 10 million habitants, could be in the limelight to benefit from the country’s economic momentum.Upgrading the structures as well as transport network are some of the challenges that a dynamic city has to overcome. Travelling in Mumbai is a bit of a problem. Distance, exceeding population and inappropriate transport facilities are ongoing concerns. The Minister of State for Urban Development, Shri Rajesh Tope, hopes with his 2.2 billion roupies plan to improve Mumbai’s infrastructures and Thane’s district with main emphasis on public transports facilities. The 9-line metro network is under way since 2006 and should be finished by 2021. Hence the BEST bus network, Birhanmumbai Electricity Transport and Supply, set up in 1873 runs 3 391 buses for 4.5 million people over 340 routes, has come to its limit.Mumbai fights against its overcrowded city centre. In fact, the m_ price in South Mumbai is so high considering that building area is rare. The MMRDA, Mumbai Metropolitan Region Development Authority, has been appointed to .ne suitable solutions in terms of infrastructure needs. The construction of the Bandra Kurla in the Northern suburb has responded to the city’s need. Furthermore, it is within this area that most of estate buildings and hotels are under way.Other major work in progress is Mumbai’s international airport. Sanjay Reddy, vicechairman of GVK and Managing Director of Mumbai International airport is due to invest no less than 830 million euros by 2010 in order to upgrade the airport and cater for the expected 40 million passengers per year against the actual 17 million. Reddy wants to increase land properties around the airport surroundings (1850 acres for Mumbai compared to the 5000 acres for Delhi’s airport) which is not enough for the country’s busiest airport. The family run company has also submitted plans to the government for extensive city-side development with hotels, convention centres and recreational area. Furthermore India’s government has approved the construction of a second international airport at Navi to cater for the predicted 80 million passengers by 2026.Regarding the hotel industry development, India has the second largest pipeline in the region. 261 projects for 47 000 rooms all situated in strategic places. In 2007, the shortage in room supply led to an historic RevPar above 200 US$, that is a 80 to 90% rise. This significant increase has been witnessed from top luxury to economic and budget hotels. The city of Mumbai follows the same pattern as the Indian market needs due to its privileged situation as India’s economic capital and busy place for tourism.On the top end of the scale, most hospitality majors have reported occupancy of over 90% this year. The tourist’s season, generally between September and March, is now combined with later booking from international corporate and businessmen thanks to the economic boom in the region. Leela’s Venture’s director for Sales and Marketing Indrajeet Banerjee explains “There is no longer a low season post-April as the average occupancy is at least 70-80 per cent. High-level delegates attending different seminars are driving the growth of the industry even in non-peak seasons.”Since 2006, Carlson’s Park Plaza Mumbai started in 2006 the urge to develop new upscale accommodations to counterbalance the tremendous popularity of the city. The 223 rooms Park Plaza Royal Palms offers 2 swimming pools, a golf course. The opening of Four Season’s Hotel Mumbai in April 2008 will count 202 rooms and becomes the first hotel of the group on the Indian continent. Followed by Westin Mumbai Garden City with 269 rooms alongside the Grand Central and the Maratha for the group’s Luxury Collection, as well as the Royal Méridien to reinforce Starwood’s position in the city. The completion is due for July 2009 and should make the group’s 136 hotels in the Asian region. The same year, the Shangri-La Mumbai will include 400 rooms situated in the heart of the city within the residential and corporate hub of Lower Parel. The hotel, managed with Pallazzio Hotel and Leisure Limited, will be Shangri-La’s fifth property in India. The subsidiary of Phoenix Mills Ltd, a real estate developer in India, marks its foray into the hospitality industry.According to ECA International, the world’s largest membership organisation for international human resources, India should witness the largest income rise (14%). India’s middle class could represent, by 2025, 580 million people and make it 5th market regarding consumption in the world. The income rise as well as low-cost carriers arrival in the region have participated to the increase in domestic travels. Even if companies like Air Deccan, GoAir or Jet Airways have reached the India market rather late, it is becoming one of the most dynamic of the world. In 15, this segment has multiplied by 5 (more than 350 million passengers compared to 67 million in 1991). Next to this market’s potential, both international and domestic hotel industries are orientating its strategy towards the economic segment.Accor with EMAAR Properties has signed contracts to build 100 HotelF1 hotels for a global investment of 300 US dollars. The 80 rooms hotels en suite will also have a restaurant and 24 hours reception service. In parallel the French group and Interglobe is developing the Ibis network throughout a 180 million investment to open 15 hotels and 2700 rooms. The group extends its upscale portfolio with a 300 rooms So.tel Mumbai that is due for completion in 2009 within the prestigious Bandra Kurla complex. Accor has unveiled its development strategy in emerging markets by covering the India’s entire market hotel spectrum.The midscale segment is well occupied by the IHG group. In the 2007 BDRC Asia Pacific Hotel Guest Survey, Holiday Inn was the top midscale hotel choice among business travellers in India and across Asia Pacific. Strong from such positive feedbacks, the world’s leading group has planned to open 14 new look Holiday Inn for more than 3700 rooms within the next 3 years. In total, IHG has a pipeline of 20 hotels for 5000 rooms with two other of its brands, InterContinental and Crowne Plaza. Peter Gowers, chief executive, IHG Asia Pacific says: “India is an important market for IHG, where both domestic and international traffic is increasing and new travel segments are opening up. In the India business, the greatest opportunity for growth is in the midscale segment, in which Holiday Inn has a leading position. Holiday Inn now accounts for almost three quarters of our new development in India. An increasing portfolio of new hotels will ensure Holiday Inn continues to be the number one midscale hotel choice among guests and owners.”Next to the increasing project from international concurrency, several initiatives from domestic groups are under way. Whilst setting agreement with Sheraton, ITC group, India’s foremost private sector company, is now focusing on sculpting several more brands like the local Fortune Umbrella. Few years ago, Kamat Hotels India Ltd has launched its economic brand Kamfotels. More recently Sarovar Park Plaza, Carlson’s master franchiser, implanted in upscale hotels in the region, reached the economic segment with its ‘no frills’ brand Hometel. Talking business within all areas of the Indian’s economy one cannot bypass the Tata’s family run group. The familial empire owns no less than 98 companies from car industry to tea production and export. Tata’s hotel filial, Indian Hotels Company, owns and runs Taj Hotels Resorts and Palace with 60 hotels in 42 locations across India as well as 16 international hotels from Bhutan to the United States of America. The Taj Mahal Palace hotel started the group’s history in 1903. Quickly followed by many hotels and resorts from luxury, business and leisure segments. In 2004, the Indian Hotels Company enters the economic segment by launching Ginger Hotels, ex IndiOne. The Ginger Hotels provide quality service to local tourism and corporate. Its Smart Basics concept has 11 hotels in the region, one located in Pune on the old Mumbai-Pune highway.Market alliances can sometimes be difficult. Hence Oberoi has ended its partnership with Hilton as 8 hotels were re-branded by the local group’s Trident Hotels. Hilton’s joint-venture with real estate company DLF to set up 3-stars Garden Inns has been the trigger of the disagreement. From April 2008, Mumbai’s Hilton Towers will become Trident Nariman Point.Other domestic groups like Lemon Tree Hotels, Panoramic Universal Ltd and Fortune Park Hotels are further entering the whole travel and tourism industry to increase standards across the country. Panoramic Universal has just acquired the Rishi Garden Resort. It hopes to convert the 25 deluxe rooms into 200 rooms 5 stars hotel next to Karnala Birds Sanctuary.Luxury to economic segments, Mumbai ‘s hotel offer is developing. Maintaining high occupancy rate and great RevPar in the region seem to be the trend for the year to come as international interests is maintained by both leisure and business segments. Furthermore, the large increase in domestic travellers as well as the emergency of a visible middle-class is due to impose itself and become a strategic target in the hospitality industry. Thanks to the economic growth, government incentives to liberalise the market has facilitated foreign investment and infrastructures improvement : metro and airport construction. Low-cost companies is a step further towards market diversification and the development of economic and budget hotels. However, in India and Mumbai more particularly, inflation rate, building cost and overpopulation are the main difficulties that the city will have to overcome.