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Hotel investors in India are reaping rewards of a lack of lodging supply in the eastern country. Revenue per available room (ReuPAR) across the country jumped from $40 in 2002 to $157 in 2007. Average daily rates have also gone gangbusters, rising from $77 in 2002 to $224 last year. $250
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venture's first project is a 124-room, fivestar business hotel under construction in an upscale part of Vizag, a city on India's eastern coast and home to the country's largest port. Tbe hotel's cost and brand have not been announced. Tlietwocompanieshavemadea$12.5 million investment in Duet India Hotels, a $166 million hotel development frind that closed in February, which plans to build 25 tbree- and four-star business hotels across India.
Others argue lack of capital is the real culprit. Hotels are capital intensive and require a seven-year gestation period, he says. That's a tall order for many developers, says Abhishek Gupta, an analyst for Iones Lang LaSalle in Munibai. "I think from the hotel operator's point of view, it's a very good time to get in and get the flags on the map," lohnston says. Research firm Lodging Econometrics estimates there are more than 47,000 rooms in the pipeline. Ng sees the bi^est challenge as finding people to manage hotels after they're built. "There is such an anticipated boom of inventory coming on line that there is going to be a shortage of talented hospitality professionals," Ng predicts. Hotel property investors, however, may want to tread carefully. Sales prices have doubled and tripled in some places in recent years, and some analysts say prices are reaching a peak. I Bennett Voyles is a veteran commercial real estate reporter and National Real Estate Investor's Paris correspondent. For questions or comments, email benvoyles@yahoo.com.
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