Market Report
India Hotel Market Review: H1 2020
The first half of 2020 was an unprecedented period for India's hotel sector, marked by a drastic decline in demand and revenue due to the COVID-19 pandemic.
This report, prepared by STR and Horwath HTL, provides a comprehensive analysis of the hotel's performance from January to June 2020, comparing it with the same period in 2019.
Impact of COVID-19 on Hotel Performance
The year 2020 started with positive momentum from 2019, the best-performing year in a decade for India’s hotel sector. However, the onset of the pandemic led to severe disruptions:
- Room Sales: The number of rooms sold per day plummeted from an average of 88,000 in the first half of 2019 to just 21,000 by June 2020.
- ADR Decline: The average daily rate (ADR) saw significant reductions, particularly in April (-Rs. 1.5k), May (-Rs. 2k), and June (-Rs. 2.1k) compared to 2019.
- Revenue Loss: Total room revenue loss from March to June 2020 was estimated at Rs. 48.1 billion, not accounting for independent hotels which would likely increase this figure further.
Monthly Performance Analysis
- January 2020: Started with an 8% demand growth and a nominal 1% RevPAR growth despite initial virus concerns.
- February 2020: Negative YoY comparisons began, but the impact was expected to be localized.
- March 2020: Occupancy fell 30% in the first two weeks, with a steeper decline post-lockdown (effective March 24), resulting in a 56% YoY RevPAR decline.
- Q2 2020: Characterized by extended lockdowns and minimal travel, leading to a catastrophic quarter for the hotel sector.
Quarterly and Half-Yearly Performance
- Q1 2020:
- Occupancy: 57.5% (down from 69.9% in Q1 2019)
- ADR: Rs. 6.4k (unchanged from Q1 2019)
- RevPAR: Rs. 3.7k (down from Rs. 4.5k in Q1 2019)
- Q2 2020:
- Occupancy: 15.7% (down from 62.9% in Q2 2019)
- ADR: Rs. 3.4k (down from Rs. 5.4k in Q2 2019)
- RevPAR: Rs. 539 (down from Rs. 3.4k in Q2 2019)
- H1 2020:
- Occupancy: 38.3% (down from 66.4% in H1 2019)
- ADR: Rs. 5.8k (down from Rs. 6k in H1 2019)
- RevPAR: Rs. 2.2k (down from Rs. 3.9k in H1 2019)
Demand and Revenue Loss
- Segment Analysis:
- Luxury and Upper Upscale: 49% decline in demand, Rs. 27 billion revenue loss.
- Upscale and Upper Midscale: 46% decline in demand, Rs. 15 billion revenue loss.
- Midscale and Economy: 44% decline in demand, Rs. 6 billion revenue loss.
- F&B and Banqueting Revenue: Estimated decline of Rs. 32 billion due to the cancellation of weddings, conferences, and leisure activities.
City-Level Performance
- Major Metros: Demand declined by 50-55%, with Gurugram (-57%), Pune (-63%), and Ahmedabad (-42%) experiencing significant drops.
- Leisure Markets: Goa and Rajasthan saw declines of 83% and 62%, respectively.
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