The hospitality industry in India saw another year of steady growth in the performance during the January-March quarter of this year. This was largely propelled by a notable surge in the average daily rate (ADR) by 8.5% compared to the same period in 2023. Consequently, there was a robust growth of 11.4% in Revenue per Available Room (RevPAR), as indicated by JLL’s Hotel Momentum India (HMI) Q1, 2024 report.
The growth was primarily fueled by a rise in corporate travel, weddings, and demand for Meetings, Incentives, Conferences, and Exhibitions (MICE) towards the end of the fiscal year 2024, according to JLL.
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The sector also witnessed a 5.5% quarter-on-quarter growth in RevPAR in Q1 2024, compared to Q4 2023. This surge is credited to increased corporate travel activity during Q1 2024 compared to the holiday season in Q4 2023 (October-December), as outlined in the report.
Throughout the quarter, there was strong demand for hotel rooms in both business and leisure destinations. Occupancy rates in key business markets remained robust, averaging approximately 70%, bolstered by substantial growth in Average Daily Occupancy (ADR) levels.
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The favorable momentum experienced in the first quarter is anticipated to persist into the second quarter, propelled by business travel, MICE events, and weddings which typically mark the busy season. Furthermore, the subsequent quarter is poised to witness a surge in leisure travel, particularly during the summer holidays.
During Q1 2024, there were 90 signings of branded hotels, totaling 9,710 rooms. Additionally, 13 of these signings involved conversions from other hotels, making up 12% of the total inventory signed in Q1 2024. The openings of branded hotels amounted to 36, providing 2,316 keys. Notably, 75% of these keys were located in Tier II and III cities such as Jaipur, Indore, Surat, and Ayodhya.
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Chennai took the lead in RevPAR growth during Q1 2024, experiencing a notable increase of 21.7% compared to Q1 2023. Following closely were Hyderabad and Delhi, boasting year-on-year growth rates of 21.1% and 19%, respectively.
Jaideep Dang, Managing Director of JLL’s Hotels and Hospitality Group in India, remarked, “The first quarter has initiated a strong performance trend for the hotel sector in 2024. Healthy consumer sentiments and domestic corporate travel will remain pivotal drivers.”
“Key hubs for both business and leisure are experiencing robust demand, leading to an increase in Average Daily Rate (ADR) levels, supported by minimal additions to supply. Overall, the demand trends are promising, suggesting a steady performance for the sector throughout 2024. The only potential setback might occur in the latter part of summer due to heightened outbound travel and a temporary lull following the announcement of general election results,” he remarked.
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