According to the Ministry of Tourism of India, there is a scarcity of 150,000 hotel rooms in the country. The increased demand of hotels in the country has appeared due to the high demand for hotels in the country has emerged mainly because of the brisk expansion in the tourism business which comprises of 75% of the overall tourism industry in India. According to the estimates provided by Ministry of Tourism and Industry, the occupancy rates of hotels in Bangalore shot up from 64% to 79% between 2001 and 2005, whereas in Bombay and New Delhi it increased from 52% to 74% and from 53% to 80% respectively.
Eyeing the great potential in the Indian Market, world's renowned hotel chains viz. ITC, Accor and Hilton and are penetrating on a broad scale in the Indian hotel industry whereas, Eastern Mandarin, Golden Tulip and Four Seasons are exploring a variety of growth prospects in the country. Accor has recently publicized the formation of two joint-ventures in India where the first is in corporation with Emaar Mfg and entails construction of 100 hotels up to 2015. These hotels will be working under the brand name of 'Formule1' with a per room tariff of USD 20- USD 30 per night. The second joint-venture is with Interglobe where Accor will be holding 40% of the stake while the remaining 60% will be held by Interglobe. This joint venture, under the brand name of 'ibis', will be constructing 25 hotels in India by 2010. The reason for the influx of Big Hotel groups to enter into the emerging market like India is that the US market is somewhat reaching the level of saturation for them and markets like India with enormous tourism and demand/supply disparity in the hotel industry would provide a boost as it is a cost effective tourist destination.
HILTON GROUP OF HOTELS IN INDIA
After a great success worldwide, the Hilton group remained the key player in exploiting the opportunities in Indian Hotel Industry which is still in a nascent stage by coming up with a joint-venture with the Indian group DLF to open 75 hotels in the country (DLF holds 75% of the stake) in five to seven years time.
Before discussing about this deal and Hilton's penetration in the Indian market, we should see the current standing of both the companies in their own particular aspects.
HILTON HOTEL'S CORPORATION
The Hilton Chain of Hotels hold fast to its founder Conrad Hilton's philosophy whjo said that, "It has been, and continues to be, our responsibility to fill the earth with the light and warmth of hospitality." This viewpoint is shared by all Hilton brands. Pre-February 2006, Hilton Hotels Corp. had run Hilton hotels in the USA, plus other hotels in the US & globally. In February 2006, Hilton Hotels Corp. bought all of Hilton Group's Hilton hotel operations outside the US. Hilton Hotels Corporation is the top international hospitality company, with more than 3,000 hotels in 76 countries and territories worldwide. The company holds, administers or franchises a portfolio of world's renowned and highly regarded brands, including Hilton, Embassy Suites Hotels, Hilton Grand Vacations, Conrad Hotels & Resorts, Homewood Suites by