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February 23, 2006

India hotel building boom not enough

NEW DELHI

Construction of an additional 40,000 rooms in India, due to come on line in two years, will do little to address the immediate extreme shortage, officials say.

India is facing a severe shortage of quality hotel rooms, a crunch that has spurred hotels to raise rates dramatically, a travel executive said.

The shortage of rooms at hotels that meet western standards has led many in major cities like Bangalore, the country’s high-tech hub, to require three weeks’ advance notice of bookings.

“While the overall demand for hotels is going up by 10-15 per cent annually, there is a large demand and supply gap which will only widen,” he said.

“The year 2006 will be undersupplied by up to 10,000 rooms,” Thadani said.

India’s Tourism Ministry has said arrivals rose by 13.2 per cent in 2005 to 3.9 million, the highest ever, and the government expects arrivals in 2006 to grow by 15 per cent.

The shortage of rooms has been caused by a combination of increased business activity and leisure travel within the country and tourists from abroad.

The boom is also reflected in the growth of India’s aviation sector in recent years after it was opened up to private carriers.

Associated Press

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