Jaipur (India) Tourism Market Overview

Jaipur is a part of the golden triangle, which also incorporates the cities of Delhi and Agra. According to Government of India Department of Tourism (GIDT) over 40% of the international tourists visiting India in 1999 visited the golden triangle. The area also receives a significant share of domestic tourist traffic. Major tourist attractions in Jaipur include the Rajputana forts, palaces with majestic architecture, museums and gardens.

The airport of Jaipur is located around 13 kilometres from the city centre. The airport is connected with the major cities of India such as Delhi, Mumbai, Calcutta, Ahmedabad and Jodhpur. As Jaipur is not a major city of India, the airport has limited capacity and serves domestic flights only.

As at October 2000, Jaipur had 25 government approved hotel establishments offering 1,645 rooms. The largest proportion of Jaipur's room stock is concentrated in the premium segment with the 5 star deluxe and 5 star categories comprising 66.6% of total room stock. Room supply in the 5 star deluxe and 5 star segments was virtually constant between 1993/94 and 1996/97. However, with the opening of two properties since then, it increased by 33.5% or 275 rooms.

Demand for the premium segment of hotel accommodation in Jaipur is primarily driven by foreign leisure travellers which follows a distinctively seasonal pattern. Visitation generally peaks in the winter months of October to March to avoid the heat and shortage of water experienced during the summer season. Domestic tourists account for a marginal share of demand for accommodation in the premium segment.

International visitor arrivals to Jaipur exhibited a distinctively fluctuating pattern in the 1990s, causing occupancy levels within the five star deluxe segment to vary. In 1999, international tourist arrivals witnessed a 37.0% growth over the previous year. The average length of stay in Jaipur was estimated to be two days. France and United Kingdom represent the largest source markets for Jaipur, followed by Japan and Germany.

Performance by Star Grade

Five Star Deluxe Hotels

Room supply in the 5 star deluxe segment currently stands at four establishments comprising 504 rooms. Room supply has increased by 22.8% in 1999/00 over 1992/93 with the injection of 115 rooms during the period. In 1997, the Oberi group opened Rajvilas Palace, a 71 room property catering to high-end international tourist travellers.

In 1999/00, a total of 106,295 room nights were sold, representing an increase of 8.8% over 1998/99. During this period an average occupancy of 57.8% was recorded, compared to 54.1% in 1998/99.

Average Daily Rate (ADR) of the five star deluxe segment exhibited positive growth from 1992/93 to 1999/00 in Rupee terms. This growth was particularly more significant in the year 1997/98 with the opening of the Rajvilas Palace which commanded a premium over other hotels in the segment. Due to the depreciation of Rupee against US$ during the period, however, the growth of ADR in US$ terms was comparatively lower.

Revenue per available room (Revpar) of Rs.2,893 (US$66) was achieved during 1999/00, representing an increase in Rupee terms of 11.8%, compared to a drop of 1.2% in 1998/99. In US$ terms, however, Revpar dropped from US$69 in 1997/98 to US$66 in 1999/00. Nevertheless, compared to 1996/97, there was a considerable increase of 40.7% in Revpar in 1999/00 in US$ terms.

The 5 star deluxe segment currently comprises five properties with a total supply of 591 rooms. Room supply registered an increase of 49.2% between 1992/93 and 1999/00.

With 158,311 room nights sold in 1999/00, room nights demanded (RND) registered an increase of 27.0% over 1998/99. Average occupancy levels had declined to 57.8% in 1998/99 as the market absorbed the opening of the 138-room Trident of the Oberoi group in 1997. In 1999/00 this decline was reversed as international visitor arrivals exhibited robust growth, boosting occupancy to 73.4%.

ADR dropped by 14.6% in US$ terms to record Rs.1,662 (US$39) during 1998/99. However, this represented a decline of only 5.1% in the year. In 1999/00, ADR increased to reach Rs.1,737 (US$40). Again, an increase in ADR in Rupee terms was more than US$ terms due to the depreciation of Rupee against US$.

In 1999/00 RevPar increased by 29.2% to Rs.1,274 (US$30) compared to 1998/99.

Recent economic recovery and improved hotel performance has drawn the attention of Indian and international chains, who have proposed a number of hotel projects in the city. Whilst the local chains are developing the projects themselves, the international chains have strategic relationships with the local partners. Construction has commenced on one of the proposed developments, however we do not expect any additional supply of rooms in the premium segment until 2003/04.

While the infrastructure level in general is satisfactory, it needs considerable improvement to attract more tourists to the city. The government, in association with the Airports Authority of India (AAI) proposes to build an International Airport at Jaipur. This project involves an extension of the runway to accommodate larger planes and an improvement of passenger amenities at the airport, and is expected to be completed by the end of 2001/02.

This, combined with other government initiatives including improvements to the city's road network and water supply, is expected to improve demand from domestic and international tourists in the medium to long term. This is likely to lead to modest growth in occupancy and ADR, making the outlook positive for the Jaipur hotel market.

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