• Tech Hubs are Powering the Indian Hotel Industry\'s Growth   


Tech hubs have globally been a catalyst for the hospitality sector’s expansion. Bengaluru and Hyderabad are prime examples of this trend in India, witnessing unprecedented growth in hotel supply in sync with their booming IT sectors. Read on to know more.

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The Indian technology industry, valued at a staggering USD 245 billion as of FY23, is a formidable pillar supporting the country’s GDP and overall economic growth. With continuous innovation driving its growth, this industry is poised to reach USD 500 billion by 2030. As one of the primary beneficiaries of the tech industry's influence, the hospitality sector is bound to experience the positive ripple effects of this growth.

Tech hubs have globally been a catalyst for the hospitality sector’s expansion, attracting tech professionals, entrepreneurs, and business travelers in droves, which translates into a consistent and robust demand for hotel accommodations. This demand has spurred the growth of hotels, transforming these cities into bustling hospitality hubs. Silicon Valley in the United States, Silicon Roundabout in London, and Shenzhen in China are prime global examples of this trend.

Closer to home, Bengaluru, often hailed as the Silicon Valley of India, is an eloquent example of this phenomenon. As the heart of India's thriving tech industry, the city attracts professionals from across the country and around the globe. The hotel industry in Bengaluru has expanded exponentially, growing from a modest supply of just over 1,400 rooms in the early 2000s to a staggering 18,500 rooms as of August 2023. Today, the city boasts of being the largest hotel market in the country, surpassing even the likes of Delhi and Mumbai. Thanks to the growing demand and hotel sector performance, Bengaluru continues to remain among the most coveted markets for hotel brands, consistently ranking among the top three in terms of hotel signings year-over-year.

Hyderabad, another tech powerhouse in the country, supports nearly 11% of the country’s tech exports. Home to corporate giants such as Infosys, Microsoft, and HCL, areas like HITEC city and Gachibowli have transformed into major business hubs, teeming with expansive office spaces and an ever-increasing number of visitors. The city currently has over 9,700 branded hotel keys, a remarkable leap from just over 1,000 in the early 2000s.

These are but a few instances in a vast landscape and new tech hubs are emerging in tandem with the growth of the tech and IT industry in India. Jaipur, renowned for its UNESCO recognition as a "City of Crafts and Folk Art" and a major tourist attraction, is on its way to becoming a tech hub. Companies like Genpact, Infosys, and Wipro have already established offices in the city and the construction of 'Rajiv Gandhi Knowledge Service and Innovation Hubs' is further propelling Jaipur's tech evolution. This confluence of tourism and technology has led to a remarkable surge in the city's room supply, mushrooming from 2,500 keys in 2010 to an impressive 7,500 keys as of August 2023. Indore mirrors a similar transformation. Supported by outstanding infrastructure, connectivity, and a rich talent pool, the city has attracted the attention of both businesses and government. It now houses IT Parks, offers tax exemptions for IT companies, and more, setting the stage for becoming India's next IT hub.

Fueled by enhanced connectivity and infrastructure, numerous tech firms are expanding their operations to cities like Ahmedabad, Kochi, Mysuru, and more, seeking a rich talent pool and lower operational costs. A recent report from NASSCOM has identified 26 potential tech hubs, including Vellore, Warangal, Madurai, Guwahati, Hubbali, and Kanpur. These emerging tech hubs will drive economic growth, attract talent, and generate hotel demand, and it’s crucial that hotel companies recognize these opportunities and establish their presence in these markets to strengthen their competitive edge.

Mandeep S. Lamba, President – South Asia, oversees the HVS practice in South Asia. Mandeep has spent over 30 years in the hospitality industry having worked with International Hotel Companies such as Choice Hotels, IHG and Radisson Hotels before becoming President for ITC Fortune Hotels in 2001. Having successfully built the Fortune brand in India’s mid-scale hospitality sector, Mandeep ventured into an entrepreneurial stint for over 8 years, setting up JV companies with Dawnay Day Group UK and Onyx Hospitality Thailand before joining JLL in 2014, as Managing Director, Hotels & Hospitality Group – South Asia. An established industry leader, Mandeep has won several awards and recognitions for his accomplishments. Recently, he was featured in the Hotelier India Power List of the most respected hoteliers in India for the second year in a row. Contact Mandeep at +91 981 1306 161 or mlamba@hvs.com.

Dipti Mohan, Senior Manager - Research with HVS South Asia, is a seasoned knowledge professional with extensive experience in research-based content creation. She has authored several ‘point of view’ documents such as thought leadership reports, expert opinion articles, white papers and research reports. Contact Dipti at dmohan@hvs.com.

Dhwani Gupta, Associate - Research with HVS South Asia, studied literature for her undergraduation and believes that you can do anything with the right amount of research. After graduating, she pursued a course in Management and Liberal arts which gave her a wider perspective of the world. As a result, the more difficult a topic is, the more fun she has writing it. Contact Dhwani at dgupta@hvs.com