If one goes by the latest reports of different research agencies tracking the Indian hospitality segment there is a clear indication that it is on a growth momentum. As per the JLL’s Hotel Momentum India (HMI) Q3, 2024, the hospitality sector continued to witness Year-on-Year (YoY) growth in performance in Q3 2024 (July - September 2024), primarily driven by a rise in Average Daily Rate (ADR), resulting in a RevPAR growth of 10.8 per cent.
On the other hand as per the hospitality monitor by ANAROCK, sustained demand growth has led to consistent improvements in occupancy rates across key markets in September 2024 compared to the same period in 2023.
In terms of quarterly growth, the sector continued to mark its ascendancy, registering a positive RevPAR growth of 2 per cent Q-o-Q in Q3 2024, compared to Q2 2024. This can be attributed to the typical nature of the third quarter of the year witnessing higher corporate travel as compared to the second quarter, according to JLL’s Hotel Momentum India (HMI) Q3, 2024.
As per the JLL report, the upcoming Q3 2024 is anticipated to benefit from the continued resurgence of corporate travel, festivals, and other corporate and Social meetings, Incentives, Conferences, and Exhibitions (MICE). The industry's strong momentum and sustained domestic demand for business travel, as well as corporate and social MICE events, will drive a busy season.
As per the JLL report apart from a slight decrease in the average daily rate (ADR) of Delhi and Goa, all other major markets (Bengaluru, Chennai, Delhi, Hyderabad, and Mumbai) showed considerable growth in ADR and revenue per available room figures, with Hyderabad leading the list. Although occupancy levels remained relatively stable across the board in Q3 2024 compared to Q3 2023, ADR levels improved, leading to an increase in RevPAR across all major markets.
The JLL report further observes that during Q3 2024, there were 96 branded hotel signings comprising 10,686 rooms. Furthermore, 12 hotels signed were conversions of other hotels, accounting for 11% of the inventory signed in Q3 2024.
Branded hotel openings comprised 30 hotels with 1,988 keys, of which approximately 80 per cent of the total number of keys were located in Tier II and III cities, including Tirupati, Udaipur, Ranchi, and Mussoorie.
The Hospitality Monitor for Q3 CY 2024 by ANAROCK on the other hand points out that Bengaluru led the way with a notable 8-10 percentage points (pp) year-on-year increase in occupancy rates, followed by New Delhi, which recorded a 6-8 pp growth. The ANAROCK report adds that Jaipur and Kolkata were the only markets that saw declines in occupancy rates of around 0-3 pp.
The ANAROCK report further observes that the average rates showed varied trends across the markets in India. Hyderabad posted an impressive 22-24 per cent year-on-year increase in average rates, while Mumbai and Chennai recorded gains of 10-12 per cent. All major commercial markets, with the exception of New Delhi, recorded strong year-on-year growth in average rates during Q3 CY2024.
Goa stands out as the only market to experience a decline in average rates when compared to both the previous quarter and Q3 CY2023.
As per ANAROCK, the third quarter of the calendar year 2024 witnessed a steady momentum in signings, with 9,440 keys signed across 96 properties, reflecting a year-on-year growth of 51 per cent in keys signed. However, the number of hotel openings has been relatively modest during Q3 CY2024, with only 2,565 keys across 38 properties opening.
The ANAROCK report also mentions the move by the Arunachal Pradesh government to launch a comprehensive tourism policy focusing on film tourism, farming experiences, wine-making, and eco-tourism.
Similarly, the report highlights the move by the Indian government to allow citizens of the UAE to avail visa-on-arrival for tourism, business, conferences, and medical purposes, subject to certain conditions.