Notwithstanding the increase in rates of tour packages and high air ticket prices, hospitality players are upbeat about the summer tourist season.
Occupancy levels have been stable and demand from domestic travellers has seen a steady increase, say industry players.
“The hotel industry in India is on a growth trajectory. We feel that demand in the market has kept pace with incoming supply. Occupancy levels pan-industry, including Taj Hotels, are either at the same levels as last year owing to increase in supply or have improved in certain key destinations,” said Ms Deepa Harris, Senior Vice-President, Sales and Marketing, Taj Group of Hotels.
According to Crisil Research, occupancy levels are expected to scale back to the pre-crisis levels and are expected to touch 65 per cent by 2014. A steady rise in domestic tourist spending has also brought cheer to the industry with a 13.7 per cent compound annual growth rate (CAGR) from 2010 to 2012, according to a report by World Travel and Tourism Council.
The country had 740 million domestic travellers across segments in 2011 and the figure is set to grow. Younger demographics of the travellers and their changing preferences have opened many opportunities for the hospitality sector. For example, recently Vivanta by Taj opened its new hotel at Bekal in Kerala and Srinagar, which are some of the emerging destinations for the Indian holiday goers.
“Shorter duration of holidays is a trend observed during summer travel. However, occupancy levels in hill stations and popular summer destinations such as Goa are 100 per cent for the season,” said Mr Manmeet Ahluwalia of Expedia – India, travel portal.
Hotel Leela has seen steady occupancy level at its hotels in Goa, Udaipur and Kovalam. The group is upbeat about its recently renovated Goa property. “This summer, we are looking to boost our revenues from the Goa property by 25 per cent over last year,” said Mr Sanjoy Pasricha, Vice-President, Sales and Marketing, The Leela Palaces, Hotels and Resorts. Yatra.com also expects tourist traffic at popular summer destinations to grow. “The economy is positive and the domestic market is very receptive,” said Mr Pratik Mazumder, Head Marketing, Strategic Alliance at Yatra.com.
On inbound travel segment, hospitality industry experts say that as compared to the situation in Europe and US, economic activity in India has not decreased drastically. This has sustained international business travel into the county, albeit with compromises on hotel spends. “The western economies are yet to see recovery. With a partial positive mood in the US economy and the concurrent pressure on European economies, the travel and tourism sector is seeing reduced spends,” Mr Dipak Haksar, COO, ITC Hotels.