Many leading hospitality companies looking at expansion are either deferring launches or stalling projects on the back of various challenges including fund crunch and roadblocks in getting permits.
Realistically, industry experts say, only two-thirds of the figure will materialise by then. Of the rest, some will get delayed and others shelved.
For instance, Accor Hotels initially planned to set up a network of 50 hotels in the country by the end of 2012. Currently, it operates nine, the latest being ibis at Mumbai Airport, which opened last month.
The others include 3 Novotel, 3 Mercure, 2 ibis. Sofitel, Pullman and Formule1 brands are expected to debut during this year.
Michele Casse, senior vice-president (operations), India, Accor Hospitality, said India was not the easiest of countries to be precise about completion dates for large-scale projects.
"There are many factors contributing to the extended construction and opening periods." The factors leading to delay include a lengthy period required to obtain the various permits needed to occupy the premise and then operate a hotel, he added. Between now and the end of 2012, Accor will open 21 more hotels, taking the network to 30 hotels. This means it will fall short by 20 properties. The pace of work depends upon the real estate owners and their focus.
"At the time of the 2008 economic slowdown, it was the core business of real estate companies that was impacted, which includes residential buildings. Enhancing cash flows becomes more important and hotel takes less priority," said HVS Managing Director Kaushik Vardharajan.
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