The hotel industry is witnessing a steady growth despite macro and micro headwinds. More than one-third of the hotels saw an occupancy of 70-80 per cent between 2018 and 2019, according to Hotelivate’s Indian Hospitality Trend and Opportunities report.

Achin Khanna, Managing Partner and Gautam Tyagi, Senior Associate of Hotelivate, who conducted the survey, said that the global and regional geopolitical environment, as well as the macro-economic sentiments, have been tumultuous. Jet Airways’ sudden expulsion also made domestic travel less convenient and more expensive. The growth of the sector was slower than expected, however, “it must not be confused with a decline,” the report added.

The survey tracked 1,068 branded hotels. According to the report, more than 35 per cent of the hotels saw occupancy between 70-80 per cent, whereas, 12 per cent of the hotels saw an occupancy of over 12 per cent.

The overall average occupancy growth in the industry has been only 1.4 per cent in comparison to 2017-2018. The average rate grew by 3.6 per cent, whereas the revenue per available room (RevPAR) saw a jump of 5 per cent. The highest number of occupancy, average rate and RevPAR was seen in the three-star segment with 3.6 per cent, 5 per cent and 8.8 per cent, respectively, followed by the five-star deluxe segment at 1.3 per cent, 3.9 per cent and 5.2 per cent.

According to the report, the majority of the bookings are being made 24-48 hours before travel, and the fear of rooms being left unsold at the last minute is leading to a lower revenue realisation for hotels.

All major markets witnessed an increase in RevPAR in 2018-2019 with NOIDA (including greater Noida) recording the highest y-o-y growth of 25.4 per cent due to improved business sentiment and limited supply entering the market. Mumbai, once again, topped the charts in terms of occupancy and stood at 77 per cent and also surpassed Goa to clock the highest average rate of ₹8,096 in the last fiscal.

In contrast, Ahmedabad registered the lowest average rate of ₹4,578 of the 13 major markets, despite witnessing the second-highest y-o-y growth in ADR of 10.1 per cent after Noida which stood at 14.6 per cent. All hotel markets, according to the report, witnessed an increase in occupancy with Bengaluru being an exception as it saw a degrowth of 3.4 per cent — due to a surge in the room supply with 1,700 rooms being added this year.

According to the report, in 2023-2024, the proposed branded hotels in major cities in luxury, upscale, upper mid-market, mid-market and budget hotels segment will be 10.5 per cent, 21.9 per cent, 26.2 per cent, 23.3 per cent and 18.1 per cent.

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