According to JLL’s Hotel Momentum India (HMI) Q4 2023 report released on Friday, the Indian hospitality sector saw continued year-on-year growth in performance in the fourth quarter of 2023. This growth was primarily attributed to a significant increase in the Average Daily Rate (ADR) of 14.6% compared to Q4 2022.
The report indicates that the sector experienced a notable increase of 31% in revenue per available room in Q4 2023 compared to Q3 2023. It further states that the fourth quarter witnessed steady growth in average daily rates, attributed to various factors including weddings, corporate and social MICE events, leisure travel, and year-end festivities.
“Amid stable occupancy levels, the six markets have demonstrated strong ADR performance, benefiting from sustained corporate demand and international events such as the ICC Cricket World Cup, as well as the wedding season. Hyderabad led in terms of ADR growth with 24.7%, followed by Delhi and Mumbai at 20.3% and 16%, respectively,” the report stated.
According to JLL, the momentum from the previous quarter is anticipated to continue into 2024, bolstered by the wedding industry, corporate and social MICE demand, and the increasing importance of specialized tourism sectors such as religious tourism.
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Business travel is also expected to bounce back by the end of the first quarter of 2024 as companies hold their year-end meetings. The industry shall remain robust, driven by ADR growth, strong domestic demand fueled by higher disposable incomes, and targeted government initiatives.
In Q4 2023, contracts were signed for a total of 82 hotels, encompassing 8,741 keys. Among these, 15 hotels were conversions of existing properties, representing 14% of the total signed inventory for that quarter.
In Q4 2023, Bengaluru took the lead in RevPAR growth, boasting an impressive increase of 31.9% compared to Q4 2022. Following closely behind were Delhi and Hyderabad, with year-on-year growth rates of 26.3% and 23.5%, respectively.
“As 2023 ends on a high note, the hotels industry is at the precipice of a fundamental shift in its growth trajectory. With the rising relevance of key trends such as pilgrimage tourism, airport and complementary developments, and infrastructural upgrades, we are witnessing an increased interest from hotel developers and investors who wish to participate in this growth story. We expect the sector to continue witnessing strong ADR levels on the back of softening of supply pressure, rising disposable incomes and increased air connectivity”, said Jaideep Dang, Managing Director, Hotels and Hospitality Group, India, JLL.