Hyderabad Leads as Indian Hotels See 4.8% Growth in Q2 2024
The hospitality sector in India experienced a 4.8% 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 was mainly due to an increase in Average Daily Rates (ADR) across key markets, despite a drop in occupancy levels.
Top Performers
Hyderabad led the way with an impressive 11.9% RevPAR growth in Q2 2024 compared to the same period in 2023. Delhi and Bengaluru followed closely with YoY growths of 11.8% and 10.4% respectively. All major markets, except Goa, saw improvements in ADR, contributing to the overall RevPAR growth.
Seasonal Impact
The decline in occupancy levels during Q2 2024 was largely due to summer vacations, which reduced corporate travel, a key driver of hotel bookings. This seasonality also led to a 15.9% decline in quarter-on-quarter (Q-o-Q) RevPAR growth compared to Q1 2024. The second quarter is traditionally a lean period for the hospitality sector, with lower demand from business travelers.
Future Outlook
The report highlighted 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). Domestic demand for both corporate and social events is also anticipated to contribute to a busy season ahead.
Expansion in Smaller Cities
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% of the total signed inventory. Additionally, 50 new branded hotels opened during the quarter, adding 3,755 keys to the market. Close to 90% of these new hotels were located in Tier II and Tier III cities, including emerging markets such as Tirupati, Udaipur, Thane, and Mysore.
Expert Opinion
Jaideep Dang, Managing Director of JLL’s Hotels and Hospitality Group, India, commented on the positive outlook for the sector. He 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.”
Dang 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.”
Doubts Revealed
Hyderabad -: Hyderabad is a big city in India, known for its rich history, culture, and technology industry.
Q2 2024 -: Q2 2024 means the second quarter of the year 2024, which includes the months of April, May, and June.
Hospitality sector -: The hospitality sector includes businesses like hotels, restaurants, and other places where people stay or eat when they travel.
Year-on-Year growth -: Year-on-Year growth means comparing the performance of something, like revenue, from one year to the same period in the next year.
Revenue Per Available Room (RevPAR) -: RevPAR is a way to measure how much money a hotel makes from each room that is available for guests.
Average Daily Rates (ADR) -: ADR is the average price that guests pay for a hotel room per night.
Occupancy levels -: Occupancy levels show how many rooms in a hotel are being used by guests compared to the total number of rooms available.
Delhi -: Delhi is the capital city of India, known for its historical monuments and bustling markets.
Bengaluru -: Bengaluru, also known as Bangalore, is a major city in India famous for its technology industry and pleasant weather.
Corporate travel -: Corporate travel means people traveling for work or business purposes.
Social events -: Social events are gatherings like weddings, parties, and celebrations where people come together.
Branded hotel signings -: Branded hotel signings mean agreements to open new hotels that are part of well-known hotel chains.
Smaller cities -: Smaller cities are towns or cities in India that are not as big or famous as places like Delhi or Mumbai.