JLL Report: Indian Hospitality Sector Witnesses a Quick, Strong Recovery Post the Third Wave

Indian Hospitality Sector

Driven by growth in demand for leisure, wedding and business travel, the Indian hospitality sector witnessed a rapid and strong recovery post the third wave in January 2022. This has resulted to a rise in Revenue Per Available Room (RevPAR) with steep growth of 39.1 per cent year-on-year (YoY) in Q1, 2022 (Jan-March). However, a negative growth of 15.9 per cent had been witnessed in the sector at a pan-India level in RevPAR in Q1 2022 compared to Q4 2021 on account of the third wave of COVID-19, informs JLL’s Hotel Momentum India (HMI) Q1, 2022.

Although the beginning of Q1 2022 had been slow, February and March observed rapid revival in the domestic leisure as well as Meetings, Incentives, Conferences and Exhibitions (MICE) and Business travel demand segments. Additionally, many hotels in major metropolitan cities witnessed significant growth in domestic business travel. Furthermore, the sector witnessed signs of revival of international business travel as senior management personnel started visiting their offices in India after more than two years.

That said, the next two quarters are expected to remain busy on the back of domestic leisure amidst the summer holidays. Continued growth in business travel is expected as most people have resumed work from the office and are traveling for client meetings as well as project work. The domestic segment will continue to drive demand for both corporate and leisure travel while international travel is expected to witness steady and cautious growth over the next couple of quarters. The easing of restrictions on social gatherings and the delays caused by the third wave of the pandemic has resulted in a surge in demand for weddings and social events. MICE demand is expected to witness steady growth over the next few quarters as hotels have already begun hosting sizeable conferences which were postponed previously.

The total number of hotel signings in Q1 2022 stood at 56 hotels with 3,739 keys. The hotel signings witnessed a significant increase of 81.2 per cent as compared to signings in Q1 2021. Domestic operators dominated signings over international operators with a ratio of 75:25 in terms of inventory volume.

All six key markets witnessed growth in RevPAR levels in Q1 2022 as compared to Q1 2021 due to the strong recovery in both leisure and business travel post the third wave of the pandemic. Mumbai has emerged as the RevPAR growth leader in Q1 2022 registering a growth of 71.5 per cent over Q1 2021. This was primarily led by the Indian Premier League (IPL), conferences and corporate travel into the city. “Hotel performances across major cities in India witnessed a speedy recovery post the third wave of the pandemic. Domestic leisure, long weekends, weddings and events continued to be the base business for the sector. We are witnessing a significant up-tick in domestic corporate travel as office occupancies have gone up and people have re-started traveling for client meetings and off-sites. Additionally, the steady growth of international corporate travel has boosted confidence in the travel trade. Uncertainty may remain around COVID variants and waves but we feel that the sector is set to recover well in 2022,” said Jaideep Dang, Managing Director, Hotels and Hospitality Group, South Asia, JLL.

 

Image credits: Khaleejitimes

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