Lower airfares and an increased focus on infrastructure development kept the Indian hospitality industry busy in 2005, as room rates hardened and occupancies soared to new highs, thanks to increased foreign tourist arrivals and domestic travellers.

The resurgence of the industry prompted both big and small players to announce new investment, as profit books swelled to healthy levels.

International chains were not far behind, with brands like Carlson announcing expansion plans for India, while leading luxury hotel group Shangri-La Hotels and Resorts made a comeback.

However, passage of the 165-year-old Great Eastern Hotel, also famous as the 'Jewel of the East', into private hands was one of the highlights of the year.

The West Bengal government decided to transfer the management control to Lalit Suri-owned Bharat Hotels Ltd.

Handing over a cheque for Rs 520 million ($US11.5 million) to the state government, Suri said he would invest up to Rs 1.20 billion to develop the property as a five-star deluxe heritage hotel.

The resurgent mood in the industry was on full display when Shangri-La Hotels and Resorts, one of the leading luxury hotel groups in the Asia Pacific region, entered the market again in New Delhi.

Bullish on the prospects, company Vice-President Symon Birdle said they planned to roll out both their brands - Shangri- La and traders Hotel - in all four metros in India. The group is planning eight to 10 Traders hotels in India in four to five years' time.

On the other hand, Carlson Companies Chairman and Chief Executive Officer Marilyn Carlson Nelson said: " India is a key market in which Carlson is keen to increase its hold. Currently, on the cards is the re-entry of the Regent brand in prime cities of the country."

Indian chains were also not far behind in terms of expansion, both in the domestic market and overseas. Towards the end of the year, the Indian Hotels Company of the Tatas acquired the Sydney-based "W" Hotel for approximately Rs 126 crore, acquiring the property from the Harilela Group of Hong Kong.

The company, which has earmarked over Rs 5 billion for expansion plans that include making a push in foreign markets, earlier in the year entered into a 30-year management contract to operate and manage Pierre, a luxury hotel in New York.

The luxury chain Leela Group also said it will invest as much as Rs 6.82 billion to set up new properties in Chennai and Udaipur and to renovate and enhance its Mumbai and Bangalore properties.

According to think-tank CMIE, hotel companies are hiking investment to expand existing properties or set up new ones. "From a low of under Rs 70 billion, investments on hand in the sector nearly doubled to Rs 130 billion," it said.

Most of the hotel companies were making invesments in the three southern cities of Bangalore, Chennai and Hyderabad, which were witnessing high growth in international traffic.

Areas like Pune, Nasik and Ahmednagar in Maharashtra also witnessed interest by hoteliers.  

(http://ehotelier.com)