As concerns of euro-zone economic crisis and weak rupee cast shadow on India's hospitality sector, there were few reasons to raise a toast in 2011 for the industry despite increase in both inbound and domestic travel. 

Though a there was a modest hike in hotel occupancy, revenues per room remained almost unchanged due to over-supply and on the whole analysts described 2011 as "a bit of a flat year". 

During the year gone by, the sector that contributes about 9 per cent to India's GDP saw the international hotel chains, including Las Vegas-based MGM Hospitality and UK's Whitbread and Best Western, expanding rapidly in the country. 

On the other hand, domestic hospitality firms such as Oberoi, ITC and Leelaventure were in the news more for board room actions, although they had their share of expansions, too. 

There was bad news for both consumers and companies both in the very beginning of the year as the government decided to impose service tax on food served at air-conditioned restaurants, and hotel rooms that charged above Rs 1,000. 

"Hotel occupancies in 2011 improved by about 4-5 per cent to touch an average of about 67 per cent but the average room rates were almost flat with an increase of 1-2 per cent, primarily due to over-supply of rooms," said Elara Capital Analyst Himani Singh. 

This was happening in a year when India decided to accelerate efforts to projects itself as a tourist-friendly nation under the 'Incredible India' campaign and draw more visitors from across the world by expanding tourist visa on arrival scheme to more countries. 

The government extended the scheme in January 2011 to tourists coming from an additional six countries -- Vietnam, Philippines, Indonesia, Myanmar, Laos and Cambodia. Earlier this facility was extended to only five countries -- Finland, Japan, New Zealand, Singapore and Luxembourg. 

Perhaps, the only silver-lining in the near future is that with rupee crashing by 20 per cent India suddenly is a much more affordable destination for foreign travellers. 

Singh of Elara Capital, however, doubted if India could actually benefit from inbound tourists. "Given the current economic scenario in the Euro zone, we are not sure if inbound tourist inflow will remain the same going ahead," she said. 

As per official estimates, foreign tourist arrival (FTA) during January-November stood at 55.75 lakh, a growth of 9.4 per cent compared to FTA of 50.96 lakh in 2010, which was a growth of 11.9 per cent over the corresponding year of 2009. 

Foreign Exchange Earnings (FEE) in January-November period of 2011 increased by 17.7 per cent to USD 14,876 million compared to USD 12,635 million during 11 months ended November 2010, which was a growth of 27.8 per cent as against the same period of 2009. 

The depreciating rupee against dollar burnt a bigger hole in the pockets of Indians travelling abroad as travel firms hiking charges to offset the impact. 

In 2011, there were also some changes at the corporate level for some of the India's leading hotel firms. Indicating a change in its top leadership position, ITC said its chief Y C Deveshwar would move into a non-executive role some time in the next five years to pave way for his successor. 

Over a year after Reliance Industries Ltd ( RIL) picked up a minority stake in Kolkata-based EIH Ltd, Nita Ambani and Mukesh Ambani's right hand man Manoj Modi checked in on the board of the hospitality firm as Additional Directors. 

DLF acquired the entire 26 per cent stake of its partner Hilton International in the hospitality joint venture -- DLF Hotels and Hospitality -- for an estimated Rs 120 crore. 

On the other hand, homegrown luxury hotel brand Leelaventure announced its diversification plan to set up a chain of three star hotels at pilgrimage locations across India under 'Leela Gardens' brand. 

During the year, the company sold its luxury hotel property in Kovalam, Kerala to Travancore Enterprises Pvt Ltd ( TEPL) for Rs 500 crore, in an effort to reduce its debt. 

OP Munjal-promoted Hero Group announced its foray into the hospitality sector and is developing a 280-room luxury property in Gurgaon. 

2011 was also a year when a host of international brands announced their India entry plans, while the existing global brands focused on expansion. 

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