Real estate consultancy Cushman and Wakefield has stated that under-performance of domestic hotels, funds crunch among builders and an uncertain investment environment have together slowed down construction activity in India's hotel and hospitality sector.
The depreciation in the India rupee has added to the sector's difficulties and this has pushed up the cost of developing hotels by 20 per cent to 30 per cent. The consultancy in its report said that the challenges facing the industry are likely to continue this calendar year.
There is a limited availability of capital and the basic cost of importing materials and machines have also gone up, the report added.