Rise of International Hotel chains VS Indian Hotel Chain
India is quickly going to become third-largest market in terms of operating hotels and rooms by end of this year.
A rise in domestic travel and government initiatives such as Make in India, Digital India and the e-visa scheme could be one reason for demand of the hotel rooms.
On other hand trend that has arisen is that International hotel chains are expanding at a faster rate than the Indian counterparts.
Some of the Indian groups comprises of hotels such as Taj, Oberoi, ITC and The Leela.
The trend for expansion of hotel chain could be because International hotel chains manages only hotels.
Whereas Indian hotels have to focus both on owning and operating their hotels.
Rising cost of land and growing debt levels is also a prime concern for Indian hotels.
These force them to turn their asset light and rely on to expansion through management contracts.
Moreover it is only in the recent times that Indian chains have started looking towards management contracts as a growth model while international brands have been doing for a decade in the country.
That is why International chains have grown their share faster.