Industry estimates indicate that this year may match or even surpass last year’s record hotel room additions in India, highlighting the ongoing strength of the hospitality industry in the world’s fastest-growing major economy.
Hotel chains like Indian Hotels Company (IHCL), Marriott International, and Lemon Tree Hotels played a significant role in contributing to the increase in the number of hotel rooms last year, according to industry estimates. IHCL led in terms of room count, having launched 18 hotels with approximately 1800 rooms from January to December 2023. The chain has plans to open around 2400 rooms across 24 hotels in the current year.
According to a spokesperson from Lemon Tree Hotels, the chain inaugurated 1375 rooms in 14 hotels across India in the last calendar year.
“Basis the current pipeline, we are scheduled to open over 1900 rooms in calender year 2024,” the spokesperson said.
Marriott International is expected to open 14 hotels in South Asia in 2024, featuring approximately 1,842 rooms. Notably, this expansion will introduce the Moxy brand to the region, marking the debut of Moxy Bengaluru Prestige Cloud and Moxy Mumbai Andheri West.
Kiran Andicot, the Regional Vice President for Hotel Development at Marriott International in South Asia, stated that the hotel chain unveiled 12 hotels comprising a total of 1,431 rooms in India last year. Andicot expressed the expectation that the figures for India could remain within a similar range as in 2023.
Jaideep Dang, Managing Director of the Hotels and Hospitality Group at JLL, mentioned that 2023 marked the most successful year ever in terms of hotel openings.
“The hotel supply in 2023 was 25% higher than 2022, which was the highest thus far. It is important to note that with 115 hotels and 8,712 rooms, 2019 was the tipping point in hotel supply in India,” he added.
According to JLL, until November last year, more than 12,400 hotel keys were introduced in India, showing an increase from the 9,854 keys in 2022.
Hotel Supply Growth and Revival Post-Covid
“A lot of unfinished and under development hotels which paused or got deferred due to two years of Covid, saw revival in financing and development and most of these hotels opened over 2023 and 2022. We expect a similar momentum in hotel supply being added in 2024 as real estate developers, family offices and funds are busy finishing their assets to cater to the buoyancy in demand of the hotel sector across India,” he added.
Factors Driving Optimism for 2024 in the Hospitality Sector
Estimates provided by Noesis Capital Advisors are even more optimistic. Nandivardhan Jain, the CEO of the hospitality advisory firm Noesis Capital Advisors, projected that in 2023, India’s standardized hotel inventory would witness an expansion of over 16,000 new operational rooms. Looking ahead to 2024, the hospitality sector foresees continued growth, with anticipated projections ranging from 20,000 to 25,000 new standardized rooms.
Continue Exploring: India’s hospitality industry toasts to 2024 with high hopes and record-breaking revenue growth
“This expansion includes brownfield projects and the conversion of standalone hotels into branded establishments through affiliations with national and international chains, primarily via operations and management contracts,” he added.
Jain expressed that the optimism for 2024 is driven by ‘favorable’ market conditions, ‘improved’ connectivity, the ‘heightened’ confidence of financial institutions, and hotel developers ‘proactively’ addressing industry demands.
Vijay Thacker, the Managing Director of the consulting firm Horwath HTL India, indicated that the October to December quarter likely experienced a significant surge in supply, and there is a substantial amount of supply anticipated for the year 2024.