Hotels on a high as travel rebounds
Mint, the average room rates are far higher than their range in 2019. On an average this year, the traveller had to shell out ₹7,200-7,400 for a room in the top hotel brands, indicating a year-on-year increase of 20%, and 22% higher from 2019, said data from HVS Anarock. This upward trajectory has also resulted in a 30% increase in Revenue Per Available Room (RevPAR) from ₹4,600-4,800 in 2022, and a 20% uptick from 2019 levels.
RevPar is calculated by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate. Mandeep S. Lamba, president, South Asia, HVS Anarock, said that travel demand reached an all-time high, and hotel companies are strategically expanding their portfolios to meet this escalating demand, especially focusing on tier II and III cities.
JLL India, on the other hand, which compiled the transaction volumes in the sector, said the total transaction volume is still a third of 2019 levels. It said that hotel transactions— hotels bought and sold—totalled ₹5,850 crore in calendar year 2019, but only ₹2,050 crore worth of transactions have happened between January and November 2023. The company has taken into consideration greenfield, brownfield and conversion/rebranding projects.
On an average, greenfield hotels take 4-5 years to complete and become operational. Brownfield and conversions take much less time. Hotel occupancy at an India-wide level for star hotels was still lagging behind 2019 numbers by 2.9% and showing just a 3.4% growth in the 11 months, over 2022 figures.
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