Market Report

India Hotel Market Review 2019

The India Hotel Market Review for 2019, produced in collaboration between STR and Horwath HTL India, offers an in-depth analysis of the year's performance across various segments and regions.

The report highlights the market dynamics, challenges, and opportunities for stakeholders in the hospitality industry, providing valuable insights into the trends and performance metrics.

Market Performance Highlights 

Overall Performance: 

  • Occupancy (Occ): 66.2%
  • Average Daily Rate (ADR): INR 5,997
  • Revenue per Available Room (RevPAR): INR 3,967
  • Same Store Data: 69% Occ, ADR of INR 6,198, and RevPAR of INR 4,275 indicating improvement over stable operations from previous years. 

Key Positive Trends: 

  • Largest ADR jump and second-largest RevPAR growth in the last ten years. 
  • Five key markets with occupancy rates above 70%. 
  • Lux-UpperUp ADRs exceeded INR 9,000 in three markets, with Goa’s Lux-UpperUp ADR crossing INR 11,000. 
  • GST reduction positively impacted the industry. 

Key Negative Trends: 

  • Goa’s market performance weakened. 
  • Chain-affiliated supply growth was the slowest in ten years. 
  • All India Midscale-Economy (M-E) segment experienced occupancy decline for the second consecutive year. 
  • The collapse of Jet Airways affected business and financial performance. 

Foreign Tourist Arrivals (FTA): 

  • Increase of 336,000 visitors, the lowest growth in the last seven years. 
  • E-visas grew by 558,000, marking the slowest year-on-year increase since the scheme’s inception. 

 

Market Dynamics and Segment Analysis 

Supply: 

  • Total supply surpassed 150,000 rooms with 3,500 rooms added in 2019. 
  • A notable shift towards chain affiliations among independent hotels. 
  • Bengaluru remains the leading city in terms of inventory, followed by Mumbai and Delhi. 

 

Performance by Segment: 

Luxury and Upper Upscale (Lux-UpperUp): 

  • Strong performance with ADR and RevPAR growth across key markets. 
  • Mumbai, Delhi, and Gurugram recorded occupancy rates above 70%. 
  • Goa, Bengaluru, and Hyderabad exhibited notable ADR improvements. 

Upscale and Upper Midscale (Up-UpMid): 

  • Occupancy remained steady at 66.5% with an 11% ADR growth. 
  • Mumbai led in occupancy, while other markets like Delhi NCR, Kolkata, and Jaipur showed moderate performance. 

Midscale and Economy (M-E): 

  • Segment faced challenges with occupancy levels in the low 60s. 
  • Mumbai, Delhi, and Hyderabad performed well, while other key markets struggled with lower rates and occupancy. 

City-Level Insights: 

  • Mumbai: Achieved the highest occupancy (77.1%) and notable ADR growth.
  • Delhi: Strong performance with improvements in all key metrics.
  • Gurugram: Recovered well with increases in occupancy and ADR.
  • Bengaluru: Showed strong ADR growth supported by substantial supply additions.
  • Chennai: Underperformed with the lowest occupancy and RevPAR among metro cities.
  • Hyderabad: Continued its growth trend with significant ADR and occupancy increases.
  • Kolkata: Maintained resilience with stable occupancy and ADR.
  • Goa: Faced challenges due to alternate accommodations and external market pressures.
  • Ahmedabad: Struggled with the lowest ADR and RevPAR among key markets.
  • Pune: Experienced a soft year with mixed results in occupancy and ADR.
  • Jaipur: Moderate performance with improvements in occupancy and ADR.

Future Outlook 

  • Enhanced airport connectivity and economic development are expected to drive growth in new markets over the next 3-5 years. 
  • The failure of Jet Airways and potential restructuring of Air India present both challenges and opportunities. 
  • Sustainability and responsible pricing are emphasized as crucial for long-term value creation. 

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India Hotel Market Review 2019
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