Horwath Market Report: India – By Rushabh Shah

Royal Jal Mahal, Jaipur, India - Photo by Ravi Shekhar on Unsplash
Horwath Market Report: India

This report examines Occupancy, Average Daily Rate and Revenue Per Available Room for several key markets. The report focuses on all-India numbers and 13 key markets, which carry 67% of total chain-owned/managed/affiliated inventory.

It is 10 years since a downturn began with the global financial crisis. The decade since, with several years of soft general business conditions, has seen chain affiliated inventory go from 44k to 142k rooms; it has also left a trail of stressed financials, debt defaults, asset sales, and development failures.

Supply has widened in range and geographic spread within the country; by brands and operators as well.

It is in this context that certain key achievements of 2018 must be highlighted. At all India level, occupancy is the highest for the last 10 years; ADR the highest since 2012. RevPAR for Mumbai, Hyderabad, Pune and Jaipur is the highest of the last 10 years; for Ahmedabad, Bengaluru and Delhi, it’s the highest since 2010, 2011 and 2012 respectively. On average, 90k rooms are sold per day. Lemon Tree Hotels led the industry’s first IPO since 2009; a second is coming through as this report goes under print. Among cities, Bengaluru now has the largest inventory crossing 14k; as a metropolitan area, Delhi NCR has a significant lead due to its sheer geographic coverage. Chennai is on the threshold of being the fourth city with 10k rooms.

Markets, other than the Key markets have increased supply share from 28% in 2014 to 33% in 2018. These are materially positioned at Up-UpMid and M-E levels – a significant opportunity for brands positioned at these levels and with the ability to work smaller inventories (with F&B and banquet demand) particularly in tier 2 and lower markets.

The leisure sector remains under-served with only 19% inventory share – could meaningful expansion of leisure destinations impact MICE and weddings demand at city hotels?

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