Hotel chains are not worried about drop in occupancy and are focusing on revenue growth with the market absorbing the rate hikes.

On an all India basis, hotels recorded occupancy between 60-62 per cent in September, 3-5 percentage points lower than 2019 and 1-3 percentage points lower than 2022, consultancy HVS Anarock said in a recent report. Hotels in Pune, Bengaluru, Chennai, Delhi and Hyderabad saw a decline in demand while those in Chandigarh, Goa, Kochi, Kolkata and Mumbai saw occupancy gains, it said.

RevPAR or revenue per available rooms grew in September over the same period in 2019 and 2022. Hotels thus are not too perturbed about fall in occupancy which they attributed to local festivities and G-20 summit in Delhi.

“We are in a high demand, low supply environment. Hoteliers are ready to risk losing low paying segments in favour of higher paying ones. However, market seems to be absorbing the rate increase strategy with no material impact on occupancies except for seasonal variations and impact of holiday cycles. One must remember that Delhi and Mumbai have amongst the lowest hotel rates for global gateway cities,” said Sanjay Sethi, Managing Director and CEO of Chalet Hotels.

Patanjali Keswani, Chairman of Lemon Tree Hotels added, “The focus for us is on RevPAR growth. While there was some moderation in demand in September, the overall outlook is positive as we continue to open new properties.”

According to the HVS Anarock report, hotels clocked RevPar between ₹4200-4464 in September which was 19-21 per cent higher than 2019 and 15-17 per cent higher than 2022.

RevPAR is an industry metric that is used by hotels to price their rooms. On a quarterly basis too, hotels reported higher RevPAR. According to JLL India, RevPAR grew 15.1 per cent on a year-on-year basis in the July-September quarter.

‘Strong momentum’

“While occupancy rates can fluctuate due to seasonal trends and global events, the underlying momentum for travel and hospitality remains strong,” said Satyen Jain, CEO, Pride Hotels Group.

According to JB Singh, President and CEO of InterGlobe Hotels, hospitality sector in India traditionally witnesses subdued performance in the months of August and September due to the onset of several occasions and local festivals.

“Moreover the market witnessed a decline in September due to movement restrictions due to G20 summit in New Delhi. Weeklong festivities during Ganesh Chaturthi in Maharashtra and Karnataka, led to a drop in public and corporate movement to and from these States,” Singh said. He added the InterGlobe hotels however witnessed a robust demand in September and he foresees further improvement in the coming months.

Kamat Hotels India Ltd too registered gains in average daily rate and occupancies in their Mumbai and Goa properties in September. While Orchid Hotel in Pune saw marginal drop in occupancy, revenue rose due to an increase in average daily rate, said company’s Vice President (sales and marketing) Sanjeev Advani.