With the surge in travel demand, India’s hotel industry has regained ground faster than expected as occupancy rates have risen significantly in recent months, bolstering the industry’s hopes for a stronger rebound. Growth in domestic leisure travel, strong pent-up demand and the resumption of domestic business travel are all contributing to the strong recovery. Weddings and social events are also driving demand in some markets. This positive travel feeling, boosted by lower restrictions in states, fewer cases of COVID and a higher vaccination rate in the country, is expected to continue into the last two months of the year, which have historically been the best months for the industry due to the start of the holiday season. In addition, after a hiatus of almost two years, small to medium-sized national MICE events are making a comeback, fueling demand for hotels.
We expect strong demand to tip the fortunes of the industry, bringing the industry’s performance for the October to December 2021 quarter closer to pre-pandemic levels, with a few markets, such as Goa and Chandigarh, even surpassing their markets. pre-pandemic performance for the quarter. Nationwide occupancy is expected to be between 62% and 64% in the October-December 2021 quarter, compared to 38% and 69% during the same period in 2020 and 2019, respectively.
Average rates have also improved and are expected to be between INR 5,400-5,600 from October to December 2021, compared to INR 4,253 and INR 6,540 during the comparative period in 2020 and 2019, respectively. As a result, the RevPAR will double from INR 1,615 in October-December 2020 to INR 3,400-3,600 in October-December 2021, but will still be lower than the INR 4,500 seen in 2019.
While the industry’s comeback is encouraging, it has brought with it a new set of challenges. Several hotels are operating with fewer employees, due to their staff ratio being reduced during the peak of the epidemic to cut costs and weather the storm. Although the staff ratio has improved slightly with the increase in occupancy rate, it is still below pre-pandemic levels in most cases. This could have an impact on the quality of service in hotels in the future, and if guests were more tolerant earlier when average rates were woefully low, they will be less forgiving now that rates are approaching pre-market levels. pandemic. Hoteliers should therefore focus on redefining SOPs based on lower staff ratio, as well as retraining and training employees to ensure service standards are not compromised, as the business returns without any doubt at a faster rate than expected.
Mandeep S. Lamba, President – South Asia, oversees HVS practice in South Asia. Mandeep has spent over 30 years in the hospitality industry, having worked with international hotel companies such as Choice Hotels, IHG and Radisson Hotels before becoming President of ITC Fortune Hotels in 2001. Having successfully built the Fortune brand in the mid-range hospitality sector in India, Mandeep has ventured into an entrepreneurial adventure for over 8 years, forming JV companies with Dawnay Day Group UK and Onyx Hospitality Thailand before joining JLL in 2014, as Managing Director, Hotels & Hospitality Group – South Asia. An established industry leader, Mandeep has won several awards and accolades for his accomplishments. Recently, it was featured in Hotelier India Power’s list of most respected hoteliers in India for the second year in a row. Contact Mandeep on +91 981 1306 161 or [email protected]
Dipti Mohan, Senior Manager – Research with HVS South Asia, is a seasoned knowledge professional with extensive experience in creating research-based content. She is the author of several ‘point of view’ documents such as thought leadership reports, expert opinion pieces, white papers and research reports. Contact Dipti at [email protected]
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