Mumbai (Maharashtra) [India], August 14 : The hospitality sector in India recorded a 4.8 per cent Year-on-Year (YoY) growth in Revenue Per Available Room (RevPAR) for the second quarter of 2024, according to a report by JLL's Hotel Momentum India (HMI).
This growth is primarily attributed to a rise in Average Daily Rates (ADR) across key markets, despite a decline in occupancy levels.
Hyderabad led the charge with a notable RevPAR growth of 11.9 per cent in Q2 2024 compared to the same quarter in 2023. Delhi and Bengaluru followed closely, registering YoY growths of 11.8 per cent and 10.4 per cent respectively.
The report highlighted that all major markets, except Goa, saw improvements in ADR, which contributed to the overall RevPAR growth.
The dip in occupancy levels during Q2 2024 is largely attributed to the onset of summer vacations, which resulted in a decrease in corporate travel, a key driver of hotel bookings.
This seasonality also led to a 15.9 per cent decline in quarter-on-quarter (Q-o-Q) RevPAR growth compared to Q1 2024. The second quarter is traditionally considered a lean period for the hospitality sector, with lower demand from business travellers.
The report emphasised that the upcoming quarter is expected to see a resurgence in corporate travel, driven by the festival season and the return of Meetings, Incentives, Conferences, and Exhibitions (MICE).
Additionally, domestic demand for both corporate and social events is anticipated to contribute to a busy season ahead.
In terms of expansion, the Indian hospitality sector saw significant growth in branded hotel signings and openings during Q2 2024. A total of 82 branded hotels were signed, comprising 9,732 rooms. Notably, 15 of these were conversions, accounting for 11 per cent of the total signed inventory.
Furthermore, 50 new branded hotels opened their doors during the quarter, adding 3,755 keys to the market. Close to 90 per cent of these new hotels were located in Tier II and Tier III cities, including emerging markets such as Tirupati, Udaipur, Thane, and Mysore. This shift towards smaller cities reflects the increasing demand for hospitality infrastructure beyond traditional metro markets.
Jaideep Dang, Managing Director of JLL's Hotels and Hospitality Group, India, commented on the positive outlook for the sector and said, "Backed by strong performance of hotels across India, we continue to see investors moving money in this asset class. There is strong momentum on both greenfield developments as well as operating assets across business and leisure markets."
He added, "Although the summer season has brought down corporate room night demand in Q2 2024, the sector continued to demonstrate growth in average daily rates (ADR) compared to Q2 2023. Looking ahead, the sector's performance in the upcoming quarters appears promising due to the upcoming festival season, general rise in domestic corporate travel, the return of MICE events, weddings, and other social gatherings."
Dang further emphasized that the sector's performance in the upcoming quarters appears promising due to the anticipated boost in domestic corporate travel, weddings, and other social gatherings.
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