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The Indian hospitality industry is poised for continued growth despite global economic and health challenges, as domestic demand remains robust and international travel is expected to rebound.
India’s upcoming G20 presidency and various international events, such as the ICC Men’s World Cup and Dior Global, will also drive demand for hotels in certain cities, according to HVS Anarock’s report.
In 2023, the forecast Average Room Rate (ARRs) is forecasted to be ₹7,106, which is forecasted to go up to ₹7,983 in 2025.
The RevPAR for CY24 is forecasted to be at ₹4,690 which could go up to ₹5,588 in CY25. The occupancy for the current year on an industry basis is likely to be at 66 per cent which would go up to 70 per cent in CY25.
“The Indian hospitality sector is expected to see accelerated growth in 2023, in spite of ongoing global headwinds and the uncertainty brought on by the occasional Covid-scare. This will be driven primarily by buoyant domestic demand, the revival of inbound travel, and the Indian government’s renewed emphasis on the expansion of the tourism industry,” the consultancy firm said.
New strategies
It further added that the hotel sector should develop strategies to take advantage of the short- and long-term opportunities that are emerging as the Indian tourism industry gains momentum. Here are the top trends to watch in the year ahead.
In terms of transactions, the sector is likely to continue to remain sluggish in the near term in an otherwise gradually maturing hospitality market due to the ongoing conflict between the buyer and owner’s expectations.
Buyers must recognise that as Covid-19 was an anomaly, the asset’s valuation should take into account both its historical (particularly pre-Covid-19) and anticipated future performance.
On the other hand, owners who want to exit or reduce debt should realistically take advantage of the improving market sentiments.
Also read: MakeMyTrip bullish about growth of travel sector in FY24
With improving market sentiments and a bullish outlook for the hotel sector, Indian hotel operators may explore the IPO route in the medium term. Hotel companies — both operators and owners — may now consider ramping up their operations to achieve the scale and size needed to go public.
businessline earlier reported that Indians prefer family travel this summer despite high airfares.
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