Hospitality Sector Earned 15.8% More Revenue per Available Room in Dec Quarter: Report
The hospitality sector in India has showcased remarkable growth in the last quarter of 2023, with a notable 15.8% uplift in Revenue per Available Room (RevPAR), according to a recently released report. The findings, released by JLL, a leader in commercial real estate services, underline a significant upturn in the hotel industry’s performance during the October-December period of 2023. This growth has primarily been attributed to a 14.6% rise in the Average Daily Rate (ADR), which has significantly contributed to the increase in RevPAR.
Highlighted in the report is the consistent rise in ADR during the quarter, sparked by various factors including weddings, corporate and social Meetings, Incentives, Conferences, and Exhibitions (MICE) events, leisure travel, and year-end celebrations. Sequentially, the sector experienced a robust 31% growth in RevPAR when compared to the July-September quarter, reflecting a stable occupancy level across the market.
The performance across six particular markets has been especially prominent, with strong ADR performance buoyed by ongoing corporate demand, international events such as the ICC Cricket World Cup, and the bustling wedding season. Leading the charge in ADR growth was Hyderabad, with a remarkable 24.7% increase, closely followed by Delhi and Mumbai, which reported 20.3% and 16% growth, respectively.
The report expresses optimism for continued momentum into the current year, fueled by the enduring demand from the wedding sector, corporate and social MICE activities, and the burgeoning niche tourism sectors such as religious tourism. The anticipation also extends to business travel, which is expected to see a resurgence by the end of the March quarter as corporations conclude their year-end gatherings.
On a city-specific basis, Bengaluru emerged at the forefront of RevPAR growth in the last quarter of 2023, recording a 31.9% increase compared to the same period in 2022. Close followers include Delhi and Hyderabad, with impressive year-on-year growth rates of 26.3% and 23.5% respectively.
The report also underscores the growing significance of several key trends in the hospitality industry such as pilgrimage tourism, airport developments, and infrastructural enhancements, all of which are drawing increased attention from hotel developers and investors. “With the rising relevance of key trends such as pilgrimage tourism, airport and complementary developments, and infrastructural upgrades, we are witnessing an increased interest from hotel developers and investors who wish to participate in this growth story,” remarked Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.
As the industry navigates through 2023, the projections for the hospitality sector remain strong, buoyed by ADR growth, a robust domestic demand driven by higher disposable incomes, and targeted government initiatives. This paints a promising picture for the hospitality sector, which is poised for sustained growth and continued investment attractiveness in the forthcoming year.
