Monday, August 5, 2024
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SKYE Hospitality, a comprehensive hospitality and strategy consultancy, has released its inaugural report on the performance of the Indian hotel sector for the first half of 2024.
This analysis offers interesting insights into the dynamics of the sector. According to the report, 2,706 new rooms were introduced to the market in the first half of 2024. Of these, 994, or nearly 37%, were upscale, while the remaining 63% were premium. A total of 22 new projects were launched, with prominent hospitality brands such as IHCL, ITC, Radisson, Hyatt, ROHL, Bharat Hospitality, and Wyndham among the major contributors.
In terms of regional distribution, 34% of new supply was concentrated in the West, followed by 28% in the East. The North and South regions accounted for 26% and 12% of new projects respectively.
“The Indian hospitality industry has a strong growth base, with rising occupancy rates, new openings and promising expansion plans for the future. In the first half of the year, average occupancy rates in major hotels hovered between 70% and 75%. Occupancy rates have increased by around 15% to 20% compared to the same period last year.” Mr. Ankit Kansal, General Manager, Sky Hospitality.
“The Indian hotel industry is witnessing a strong recovery, supported by the rise in business events, leisure travel, wedding season, etc. Other factors such as the growing trend of staycations, rise in experiential travel trends among millennials and Gen Z, and rise in wellness tourism packages are also fueling the demand for hospitality business in India. There is also the concept of revenge travel, with most hotels operating at 100% occupancy during long weekends,” he added. Mr. Kansal.
Government initiatives have played a crucial role in stimulating growth in the hospitality sector, with targeted policies and programmes such as Dekho Apna Desh, Incredible India, PRASHAD and Aayush boosting demand. Significant improvements in infrastructure such as new highways, rail corridors and airports have also enhanced accessibility, prompting major hotel brands to expand into previously unexplored regions such as Northeast India, Jammu & Kashmir, Andaman and Lakshadweep.
During this period, approximately 243,000 sq ft of hotel meeting and banqueting space was added, with the East region leading the way, contributing 47% of the new supply, followed by the North region at 25%. The Indian events and meetings industry is witnessing a steady growth, with an increase of 8-10%, positioning India as a prominent MICE destination on the global stage, driven by economic growth and a rich cultural heritage.
Commenting on the future prospects for the industry, Mr. Kansal “The next three to five years will witness a massive expansion in the industry, with local and international brands expanding their footprint across sectors,” he said.
Taj Hotels currently has over 20 projects under development, while Vivanta has around 50 new projects in the pipeline. Global brand Accor is also expanding, planning to add 5,500 new rooms across its Pullman, Novotel and Ibis brands. The Oberoi Group plans to add around 50 new projects over the next five years, including the launch of a new, smaller hotel brand, Oberoi Nature.
