Hotel  shortage in India is estimated to be 150,000 rooms

In India hospitality  sector is expected to rise to $275 billion in the next 10 years.In India  currently there are some 1,980 hotels approved and classified by the Ministry of Tourism, Government of India, with a total capacity of about 110,000 hotel rooms. India’s travel and tourism industry is estimated at 6.1% of the gross domestic product (GDP) which is  below the world average of 9.9%. The hospitality industry, is poised to grow at a faster rate and reach INR826.76 billion by 2010. The domestic hospitality sector is expected to see investments of over $11 billion in the next two years within 40 international hotel brands making their presence in the country in the next few years, he said.

Hotels in India face a shortage of over 1.5 lakh branded hotel rooms (one to five star rated) .With India playing host to upcoming international sports events as the Youth Commonwealth Games, Formula 1 Racing  , ICC World Cup Cricket and World Cup Hockey  etc, investors and developers can capitalize on the growing demand for hotels and hospitality services, and the outpacing returns on investments in the hospitality sector in India.

Demand for hotels in India -Reasons 
Major reasons for the increase in demand for hotel rooms in the country is industry is fuelled by increase in foreign tourist arrivals, MNC's foraying into India, huge investments in infrastructure projects , rise in Occupancy rates  and strong recovery of the Indian economy and  the boom in the overall economy and high growth in sectors like information technology, telecom, retail ,power and real estate.With huge investments flowing into India for the development of infrastructure such as roads, highways, airports and convention centres, interest in hotel developments is hitting new highs as tourism, business and travel are on the rise. The capacity for star-rated rooms in India is far shorter than its demand, and cities are now evolving from a single-business district to multiple-business districts, as growth spreads and cities get enlarged.The new business opportunities in India are also attracting hordes of foreign investors and international corporate travellers to look for business opportunities.

Indian Hospitality Industry Opportunities

The hospitality sector in India is expected to boom alongside the government’s successful efforts to promote India as an attractive destination for business and leisure. India provides a  unique opportunity for hotel developers , investors and hospitality sector specialists such as hotel groups, serviced apartments and resort operators to look for  investment opportunities available in the Indian hospitality sector. The potential for   hotels industry in India provides opportunities for  top hoteliers, developers, investors and financiers from US, Europe, Middle East and Asia interested in investing in India in the hotel sector.  

Private equity investments in India Hotel sector
Lehman Brothers and Och-Ziff Capital Management have invested $200 million in Future Group’s hotel business . Credit Suisse has invested $55 million for a 10-15 % stake in the Park Hotels chain. Kotak Realty Fund, Yatra Capital and Shinsei Bank have also invested in the hotels sector.