Despite the sluggish return of inbound travel, the sector is on a solid recovery trajectory, poised to surpass 2019 levels in 2023, driven by the optimistic sentiment within the industry. In a recent release of the India Accommodation Barometer by Booking.com, the nation’s travel and tourism industry is showcasing a moderately strong business performance fueled by domestic travel enthusiasm.
“More than half of Indian accommodation providers are basking in positive or very positive business development over the past six months, in stark contrast to the 13 per cent facing challenges. The upbeat trend extends to key metrics, with a significant share witnessing increases or strong increases in both average daily rate and occupancy rate,” said the report.
Financial nuances
When it comes to financing, the report notes that 2 in 5 Indian hoteliers faced no difficulty accessing capital, while 1 in 3 reported challenges in this regard. Despite these financial nuances, the overall outlook among Indian hoteliers remains positive, with 45 per cent expressing confidence in the economic situation of their businesses over the next six months, in comparison to only 16 per cent with a contrary view.
Hotels emerge as frontrunners in the industry, outperforming short-term rentals (STRs) notably. Higher-star hotels exhibit considerably better performance than their lower-star counterparts. Over the past six months, hotels experienced a stronger increase in both occupancy and average daily rates, leading to a 6 percentage point difference in overall business development (56 per cent for hotels vs. 50 per cent for STRs). This trend extends to the perception of the current economic situation, where hotels hold an 8 percentage point advantage (50 per cent vs. 42 per cent).
Nevertheless, the report highlights a positive outlook for STRs, slightly edging out hotels in future expectations (50 per cent vs. 42 per cent). Despite the overall positive business sentiment, there are notable differences observed between these accommodation types, emphasizing the evolving landscape of the Indian accommodation sector.