Hotel room rents experienced a slight decrease in major markets during the month of October, despite expectations for a boost in demand due to the ongoing ICC World Cup. However, in Q2, the revenue per available room (RevPAR) declined for top hotels on a quarter-on-quarter basis.
The hotel industry had been benefiting from India’s travel enthusiasm. But the spike in hotel room rents, due to large events like the G20 etc. may have reached its zenith. The push that many were expecting from the ICC World Cup 2023 did not materialize, despite the event’s runs from October 5 to November 19.
Sanjay Sethi, MD and CEO of Chalet Hotels, stated that the World Cup does not significantly impact hotel block bookings unless a team is staying in the property. The lack of an impact from the event on RevPAR was noted, with most match attendees being locals and staying for only a short duration. However, domestic leisure demand and corporate travel have been encouraging, resulting in impressive Q2FY24 earnings.
A report IDBI Capital showed a decrease in average room rates in major markets in the month of October, and also highlighted that the RevPAR of major players decreased on a quarter-on-quarter basis, despite strong year-on-year growth.
As the hospitality industry looks toward the upcoming great Indian wedding season, it is expected that hotel demand will rise. Along with this, the love of Indians for travel and the government’s efforts to promote local tourism are likely to keep the momentum going.
Analysts are optimistic about a double-digit revenue growth for hotels the end of the financial year, and also anticipate an improvement in inbound tourism in the second half of the year. The industry dynamics for medium term growth are projected to remain buoyant.