India’s hospitality industry, crippled for the past few years due to the Covid-19 pandemic, has seen a resurgence in 2023 so far. As per industry players and experts, tailwinds have come from factors like the cricket world cup and the country’s presidency of G20.
The industry is now projected to reach a valuation of $125 billion by FY27 from an estimated $75 billion in FY20, as per Federation of Indian Chambers of Commerce and Industry (FICCI), one of India’s largest industry bodies. The growth is expected to be aided by improved infrastructure, rising incomes and the quest to make up for lost years, as the 2023 holiday season is the first one without the spectre of the pandemic.
“In the January to March quarter, we saw an almost 35-36 per cent lift in our business through a combination of occupancy and rate. That was a much higher trend than what has happened in the past,” said Sharad Datta, General Manager, JW Marriott Aerocity, New Delhi.
The free individual traveller is back in focus and is one of the main drivers of increased demand, as per Datta. “We have seen a very positive trajectory for our hotel bookings, and it has been very different from previous years. Primarily, it is because business has bounced back and people are willing to travel both for business and leisure and there’s a lot of pent up demand. Clearly 2023 is going to be the best year for hotels across the country.” he added.
Business travel has indeed aided luxury hotels to return to profitability this year after an extended lull. Bangalore has already witnessed a steady growth of 28 per cent in RevPAR (revenue per available room) over 2019 and the luxury hotels have had a recovery of 31 per cent, according to Conrad Bengaluru's General Manager Digvijay Singh.
The hotel observed a 40 per cent rise in RevPAR compared to the previous year, he added.
“The spike in hotel and city occupancies stems from the corporate sector's reinstatement of on-site operations, the revival of large format meeting/conventions and the return of international travellers, which was previously halted due to the pandemic,” Singh said.
India’s G20 presidency was a testament to just how much business travel can aid the revival of the sector, as the country conducted 200 meetings in 50 cities with delegates and leaders from around the world. The presidency had a tremendous impact on business, as per Marriott’s Datta, who said that the entire month of September this year attracted new milestones, including Aerocity’s Marriott recording its highest ever revenue in a single month.
“G20 meeting were a great marketing exercise for and more than business, gave a lot of visibility to host cities and hotels to both local and international travellers,” said Chander Baljee, Chairman & Managing Directors, Regenta & Royal Orchid Hotels, which hosted a G-20 meeting in Hampi in July.
With the festive and travel season in full bloom now, hotels are expecting increased demand from not just leisure but also business travellers, with industry promoting the trend of fulfilling both motives in one trip. Hotels usually witness 55-60 per cent of their business during the second half of the year, and many are even opting to use festivals to travel rather than celebrate at home, fuelling the industry further.
“This festive season, we are looking at two primary objectives - push the baseline of revenue and acquire new customers. The initial trends for us are looking extremely positive as we are growing at close to two times on new customers coming to our platforms for hotels, said Manu Sashidharan, Head of Hotels & Accommodation at online travel booking platform Cleartrip.
However, pricing and supply issues are expected to continue exerting pressure on the industry, fuelled largely by crude oil prices and geopolitical crises. While demand has increased, the sector has not been able to keep up.
Many new hotels are in the pipeline however to match the insatiable appetite the country has for travelling.
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